FMA highlights issues with becoming wholesale investor
The Financial Markets Authority says investors should think carefully about the consequences of being classified as a wholesale investor.
The Financial Markets Authority says investors should think carefully about the consequences of being classified as a wholesale investor.
Retail advisers are subject to professional conduct standards and disclosure requirements, and investors can complain to an independent dispute resolution scheme. Advisers servicing only wholesale clients do not have to offer the same protections as those servicing retail investors.
An investor recently complained about being asked to sign an "eligible investor" document making him a wholesale client.
The FMA's director of financial adviser regulation, Mel Hewitson, said the investor was right to be concerned.
"Investors should think carefully about the consequences of becoming a wholesale client. This is why it's a requirement for investors who choose to become 'eligible investors' to certify this in writing, and why there are penalties for advisers who don't explain the consequences adequately," she said.
Investors who have been classified as wholesale clients have the ability to opt out and be treated as a retail client if they choose.
NZPA
Thu, 05 May 2011
Thu, 05 May 2011
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FMA highlights issues with becoming wholesale investor
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