Almost every question about a wholesale fund eventually collapses into one: is this person actually a wholesale client? It's the gate. It all turns on who invests. That includes whether the scheme must be registered, what you must disclose, which licence authorisations you need, and whether you need a responsible entity. Get it right and you're in a materially lighter regime. Get it wrong, even once, and the whole structure moves.
A wholesale client is anyone who isn't a retail client, and you only need to satisfy one limb. The common routes: the investment is $500,000 or more. Or a qualified accountant certifies net assets of at least $2.5 million. Or gross income of at least $250,000 a year for the last two financial years. Or the investment is for a business that is not a small business. Or you're a professional investor: an AFSL holder, an APRA-regulated body, a listed entity, someone who controls at least $10 million, and others.
A separate sophisticated investor route also lets the licensee assess your experience. The tests sit in s 761G and s 761GA of the Corporations Act. Two things catch people out: the accountant's certificate is only good for two years, and the thresholds haven't moved since 2001.
What is a wholesale client?
A wholesale client is a person who is not a retail client under the Corporations Act 2001 (Cth). Retail is the default, so wholesale status is the exception you establish. You qualify by satisfying just one of these tests (ss 761G and 761GA):
- The $500,000 test: the investment in the product is $500,000 or more.
- The net assets test: a qualified accountant certifies net assets of at least $2.5 million.
- The income test: a qualified accountant certifies gross income of at least $250,000 a year for each of the last two financial years.
- The business test: the investment is for a business that is not a small business.
- Professional investor: an AFSL holder, an APRA-regulated body, a listed entity, or a person who controls at least $10 million, among others.
- Sophisticated investor: a separate route where a licensee assesses your experience (s 761GA).
Retail vs wholesale clients: what actually changes
The retail/wholesale line is the single most consequential distinction in the whole structure. It isn't a label. It decides which regime your fund operates under. Here's the practical difference between wholesale and retail:
| All investors wholesale | Any retail investor | |
|---|---|---|
| Scheme registration | Generally exempt (s 601ED(2)) | Registration with ASIC generally required |
| Responsible entity | Not required: a trustee operates the scheme | Required: a public company holding an AFSL with retail authorisations |
| Offer document | Information memorandum (IM) | Product Disclosure Statement (PDS) |
| Target Market Determination | Not required | Required under the design & distribution obligations |
| AFCA membership | Not required for the wholesale business | Required |
| Licence authorisations | Wholesale-only: a lighter licensing burden | Retail authorisations, with the obligations that follow |
| Evidence you must hold | Proof each investor meets a wholesale limb | Full retail disclosure and conduct obligations |
The difference between a retail and a wholesale client isn't the size of the cheque. It's which rulebook applies to your fund.
If even one retail investor gets in, that lighter regime can fall away. This is why, as we set out in how to set up a wholesale fund, confirming wholesale status is Step 1. It's not a box you tick at the end.
The wholesale client test: how someone qualifies
Under sections 761G and 761GA of the Corporations Act, a person is a wholesale client if any one limb is satisfied. You don't need to meet several. But the one you rely on must genuinely be met, and you must be able to prove it.
1. The size of the investment: $500,000 or more
If the investment in the fund is $500,000 or more, the client is generally wholesale for that product. This limb looks at the size of the investment, not the wealth of the investor.
A useful wrinkle here. Once you're in on this basis, you remain a wholesale client even if the value of your interest later falls below $500,000 (Corporations Regulation 7.1.27). A market downturn doesn't quietly turn your investor retail.
2. The accountant's certificate: $2.5m net assets or $250k income
A person is generally wholesale where they give you a certificate from a qualified accountant. The certificate must be given before the units are issued, and be no more than two years old. It must state that they have:
- net assets of at least $2.5 million; or
- gross income of at least $250,000 for each of the last two financial years.
Two practical points that are widely missed:
- In working out a person's assets or income, you can count the assets or income of a company or trust they control.
- A person who meets this test can acquire the units through a company or trust they control. They don't have to invest in their own name.
See Corporations Regulations 7.1.28, 7.6.02AB and 7.6.02AC. See also ASIC's guidance on certificates issued by a qualified accountant, which confirms both figures and the two-year life of a certificate.
3. Investing for a business that is not a small business
The investment can be acquired for use in connection with a business that is not a small business. In that case, the client can be wholesale on that basis. The Act defines it precisely (s 761G(7)(b) and (12)):
- a business that manufactures goods and employs fewer than 100 people; or
- any other business that employs fewer than 20 people,
…is a small business. Employ more than that, and the business is not small. The limb can then be satisfied.
4. Professional investors
Some investors are wholesale by status, with no certificate required (s 761G(7)(d), and the definition of "professional investor" in s 9). This limb is broader than most people realise. It includes a person who:
- holds an Australian financial services licence;
- is a body regulated by APRA, such as a bank, general insurer, life company, credit union or friendly society;
- is the trustee of a superannuation fund, ADF, PST or public sector superannuation scheme with net assets of at least $10 million;
- is registered under the Financial Corporations Act 1974;
- controls at least $10 million, including anything held by an associate, or under a trust they manage;
- is a listed entity, or a related body corporate of one;
- is a public authority, instrumentality or agency of the Commonwealth, a State or a Territory;
- is a company or unincorporated body carrying on a business of investment in financial products, interests in land or other investments, that invests funds received following an offer to the public;
- is a foreign entity that would fall within one of the above if it were established in Australia.
5. Related bodies corporate
A related body corporate of a company that is a wholesale client under any of the above tests is itself generally a wholesale client. See s 761G(4A), inserted by reg 7.6.02AD.
6. The sophisticated investor route (s 761GA)
Separately, a licensee can treat a person as a sophisticated investor in certain cases. It must have reason to be satisfied that the person has experience in using financial services and investing in financial products. It's not a shortcut. It has real mechanics:
- the licensee must give the client a written statement of its reasons for being satisfied; and
- the client must sign a written acknowledgement. It confirms they have not been given a Product Disclosure Statement, and that the licensee has no obligation to them as a retail client.
Because it rests on the licensee's judgement rather than an objective threshold, it carries more risk than the other limbs. It should be used with care and advice.
The tests at a glance
| Route | What it requires | Evidence |
|---|---|---|
| Investment size | Investment of $500,000 or more (you stay wholesale if it later falls below) | The investment itself |
| Net assets | ≥ $2.5 million | Accountant's certificate, ≤ 2 years old, before units are issued |
| Gross income | ≥ $250,000 for each of the last 2 financial years | Accountant's certificate, ≤ 2 years old, before units are issued |
| Not a small business | Business employing ≥ 100 (manufacturing) or ≥ 20 (other) | Facts about the business |
| Professional investor | AFSL holder, APRA-regulated body, listed entity, controls ≥ $10m, super trustee with ≥ $10m net assets, public authority, foreign equivalent, and others | The entity's own status |
| Related body corporate | Related to a company that is wholesale under any test above | Corporate relationship |
| Sophisticated investor | Licensee satisfied of the client's experience (s 761GA) | Licensee's written statement + client's signed acknowledgement |
Only one route needs to be satisfied. But it must actually be satisfied, and you must be able to show it.
The trap: an accountant's certificate expires
This is the operational failure we see most often, and it's entirely avoidable.
ASIC's guidance is that a certificate from a qualified accountant is valid for up to two years after it was issued. Say you onboarded an investor on a certificate three years ago, and you're still treating them as wholesale on that basis. You are relying on a stale certificate.
The 2001 problem: why more people qualify than you'd think
Here's the part that catches people out. These thresholds have not changed since 2001. They were never indexed to inflation.
A $2.5 million net assets test captures a very different slice of the population today. That is two decades of inflation and asset price growth on from when it was written. Someone with a paid-off home in a capital city and a reasonable superannuation balance can clear it. That's without being anything like the sophisticated, well-resourced investor Parliament had in mind.
The reform was actively considered, and rejected. ASIC argued for raising the bar, with a submission contemplating net assets of $4.5 million and income of $450,000 to reflect inflation. But the Parliamentary Joint Committee on Corporations and Financial Services ruled out an increase in its February 2025 report. It found no compelling reason to change the thresholds.
So the 2001 figures stand. For a manager, that cuts both ways. Your pool of eligible investors is larger than the drafters intended. So is the pool of people who technically qualify but may not truly understand what they're buying. The tests are a legal gate, not a judgment about suitability.
What happens if you get it wrong
If a retail investor ends up in a fund built for wholesale clients, the consequences aren't cosmetic. The wholesale exemption from scheme registration can fall away, and retail obligations can be triggered. These include registration, a responsible entity, a PDS, a Target Market Determination, AFCA membership, and retail licence authorisations you almost certainly don't hold.
That's not a problem you fix with an apology. It's why wholesale status must be confirmed and documented before you accept the money, not reconstructed afterwards.
Where an integrated platform fits
Confirming wholesale status is one of the responsibilities that stays with the manager. And it should. You know your investors. What a licensed platform does is make sure the obligation is actually operationalised. It ensures certificates are collected, held, dated and re-checked. It also ensures the scheme they're investing in is structured and licensed for wholesale clients in the first place.
Providence Equity Holdings acts as trustee, issuer and operator of the scheme and provides the compliance and operational framework. You run the strategy as an authorised representative. → Managed Scheme & Trustee Infrastructure
Frequently asked questions
Who is a wholesale client in Australia?
A wholesale client is anyone who is not a retail client, and you only need to satisfy one route. The common ones: the investment is $500,000 or more. Or a qualified accountant certifies net assets of at least $2.5 million. Or gross income of at least $250,000 for each of the last two financial years. Or the investment is for a business that is not a small business. Or the investor is a professional investor (an AFSL holder, an APRA-regulated body, a listed entity, someone who controls at least $10 million, and others). A separate sophisticated investor route exists under s 761GA.
What's the difference between a retail and wholesale client?
A wholesale client is anyone who is not a retail client. So retail is the default, and wholesale is the exception you have to establish. The practical difference is which regime applies. A fund offered only to wholesale clients is generally exempt from scheme registration and needs no responsible entity. It offers through an information memorandum rather than a PDS, and avoids a Target Market Determination and AFCA membership. Let a single retail investor in and those retail obligations can be triggered. A person becomes wholesale by satisfying one of the limbs in s 761G. Examples are a $500,000 investment, or an accountant's certificate for $2.5m net assets or $250k income. Others are professional investor status, or a non-small business.
What are the wholesale investor thresholds in Australia?
As at July 2026, the investment size test is $500,000. For the accountant's certificate test, it is net assets of at least $2.5 million. The alternative is gross income of at least $250,000 for each of the last two financial years. Professional investor status can also be reached by controlling at least $10 million. These figures have not changed since 2001. Confirm the current position before relying on them.
How long is an accountant's certificate valid for?
Up to two years. The certificate must be no more than two years old, and it must be given before the units are issued. If you're relying on a certificate older than that, you're relying on a stale certificate. Re-certify before the two years expires, and keep the certificates on file.
Can I invest through a company or trust I control?
Yes. A person who meets the accountant's certificate test can acquire the units through a company or trust they control. And in working out that person's assets or income, you can count the assets or income of a company or trust they control. See Corporations Regulations 7.1.28, 7.6.02AB and 7.6.02AC.
Do I stay a wholesale client if my investment falls below $500,000?
Yes. If you qualified on the basis of an investment of $500,000 or more, you remain a wholesale client. That holds even if the value of your interest later falls below that amount (Corporations Regulation 7.1.27). A downturn doesn't quietly turn your investor retail.
What counts as a small business?
Under the Act, a small business is a business that manufactures goods and employs fewer than 100 people. It is also any other kind of business that employs fewer than 20 people (s 761G(7)(b) and (12)). Employ more than that and the business is not small. So the limb can be satisfied.
Who counts as a professional investor?
Broadly, they include an AFSL holder. They include a body regulated by APRA, such as a bank, general insurer, life company, credit union or friendly society. They include the trustee of a superannuation fund or similar scheme with net assets of at least $10 million. They also include a body registered under the Financial Corporations Act 1974. They include a person who controls at least $10 million, including amounts held by an associate or a trust they manage. They include a listed entity or related body corporate of one. Finally, they cover a public authority of the Commonwealth, a State or Territory. They cover certain investment businesses that invest funds raised from the public. They also cover foreign entities that would qualify if established in Australia. See the definition in s 9.
Have the wholesale client thresholds changed?
No. They haven't changed since 2001. ASIC argued for raising them, with a submission contemplating $4.5 million net assets and $450,000 income to reflect inflation. But the Parliamentary Joint Committee on Corporations and Financial Services ruled out an increase in its February 2025 report. It found no compelling reason to change them. Because the figures were never indexed, far more people now qualify than when they were set.
What happens if a retail investor gets into my wholesale fund?
The regime changes entirely. The wholesale exemption from scheme registration can fall away, and retail obligations can be triggered. These include registration, a responsible entity, a PDS, a Target Market Determination, AFCA membership, and retail licence authorisations. This is why wholesale status must be confirmed and documented before the money is accepted.
Related reading: PDS or information memorandum? The offer document this decides. Registered vs unregistered schemes. How to set up a wholesale fund in Australia: the eight steps, in order. What does it cost? The two routes, with real numbers. And own AFSL vs authorised representative: how to choose your licensing route.
Sources & further reading
Figures stated as at 19 July 2026. Thresholds and requirements can change. For the authoritative and current position, see:
- ASIC: Certificates issued by a qualified accountant: the $2.5m net assets and $250k income figures. It also covers who is a "qualified accountant", and the two-year validity of a certificate
- Corporations Act 2001 (Cth). The tests themselves sit across several sections. They are s 761G (wholesale client), s 761GA (sophisticated investor) and s 9 (professional investor). They also include s 708 (Chapter 6D) and s 761G(7)(b) and (12) (small business)
- Corporations Regulations cover several points. Regulation 7.1.27 confirms you stay wholesale if the value falls below $500,000. Regulations 7.1.28, 7.6.02AB and 7.6.02AC cover the certificate, and counting/using a controlled company or trust. Regulation 7.6.02AD covers related bodies corporate (s 761G(4A))
- Parliamentary Joint Committee on Corporations and Financial Services: February 2025 report, which considered and ruled out increasing the wholesale client thresholds
ASIC guidance is general and doesn't address your circumstances. Confirm how it applies to you with your own adviser.