Classification for ‘Professional Financial Investor’ Outdated and Needs Reform, Peak Body Says

The FAAA was concerned that the current threshold would subject a number of investors to high risks due to misclassification.

Australian dollars are shown in Sydney, Australia, on March 10, 2015. Dominic Lorrimer/Getty Images

A peak financial advice body has proposed raising the threshold for classifying investors who specialise in more risky investments to protect them from harm due to misclassification.

At a recent parliamentary inquiry hearing, Philip Anderson, a general manager at the Financial Advice Association of Australia (FAAA), raised the issue that the current “wholesale investor” regime was outdated and needed to be reformed to catch up with the development of the market.