Advisers misusing wholesale definition
Barry Read, of IDS, addressed the Meet the Managers roadshows last week.
He said the way advisers dealt with clients who met the definition of a “wholesale investor” was an area where his team saw gaps when they reviewed advice practices. “It’s one of the things that sometimes gets missed.”
A client qualifies to be treated as wholesale if they own financial products of $1 million, if they are an entity with $1 million in net assets over the last two accounting periods or operate as an investment business.
Read said that could mean many family trusts in Auckland automatically became wholesale investors.
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