Wholesale Client

Wholesale clients, also called sophisticated or professional investors, are individuals or organisations that meet specific criteria under section 761G of the Corporations Act 2001. They receive reduced regulatory protections on the basis that they have sufficient knowledge, experience, and resources to make informed decisions.

Who qualifies as a wholesale client

• Businesses with 100+ employees (general insurance) or 20+ employees (financial products).
• Individuals or entities investing $500,000 or more.
• Individuals with net assets of $2.5 million+ or gross income of $250,000+ per year (certified by a qualified accountant).
• Professional investors: AFSL holders, registered trustees, and similar entities.
• Listed entities or related bodies corporate.

Protections wholesale clients do not receive

• Product Disclosure Statements (PDS).
• Cooling-off rights.
• Certain conflicted remuneration protections.
• Automatic AFCA access (though some may access AFCA in specific circumstances).

Why the distinction matters

Wholesale clients can negotiate terms directly, conduct due diligence, and access advice directly. The trade-off is fewer regulatory disclosures.

Important points

• Wholesale status does not mean better products or pricing, only fewer protections.
• Classification can vary by product and transaction value.
• Wholesale clients retain rights to sue for misleading conduct or breach of contract.
• Improper classification to avoid obligations is a serious breach by financial service providers.