London Office (Head Office)

70 Pall Mall, St James's

London SW1Y 5ES

United Kingdom

Melbourne Office

Level 27, 35 Collins Street

Melbourne, Victoria

Australia 3000

Sydney Office

Level 36, 1 Macquarie Place

Sydney, New South Wales

Australia 2000

AU: + 61 (3) 9001 0243

UK: + 44 (0) 207 965 4701

enquiries@mayfair101.com

Send us a message
Subscribe to our newsletter
Keep up with the latest updates
  • LinkedIn - White Circle
  • YouTube - White Circle

Disclaimer

Online Investments Pty Ltd t/a Mayfair 101 (ABN 981 34 785 890) provides investment and corporate advisory services including funds management, asset management, capital raising, corporate advisory, M&A (merger & acquisition) advisory, and direct investment either directly or via its wholly owned subsidiaries.

 

Mayfair 101 is a Corporate Authorised Representative (CAR # 001274568) of Quattro Capital Group Pty Ltd (AFSL # 334653). Mayfair 101's authority under its Corporate Authorised Representative Agreement with Quattro Capital Group Pty Ltd is limited to the provision of financial services to Wholesale clients only pursuant to the Corporations Act (Cth), including advice relating to deposit products, foreign exchange contracts, derivatives, interests in management investment schemes, and securities.  Mayfair 101 and its wholly owned subsidiaries are not deposit-taking institutions in Australia or the United Kingdom and are not authorised to conduct retail banking activities as specified in the Banking Act 1959 (Cth). 

Mayfair 101 Limited is an Appointed Representative of Sapia Partners LLP, a firm regulated and authorised by the Financial Conduct Authority in the United Kingdom.  Mayfair 101 Limited’s activities in the United Kingdom and the activities of Mayfair 101 in Australia, should be considered as separate activities.

© 2019 Mayfair 101. All rights reserved.

Investor Education Centre > Useful Tips & Knowledge > 3 Key Benefits of Being a Wholesale Investor

3 Key Benefits of Being a Wholesale Investor

A wholesale investor is defined as anyone who meets one of the following three criteria:

  • You have net investable assets of $2.5 million or more

  • You had an income in excess of $250,000 in each of the last two taxation years

  • You are considering investing $500,000 or more into a single investment opportunity

 

Anyone who doesn’t meet at least one of these criteria is automatically considered to be a retail investor. If you do meet one or more of these criteria, you’ll need to have an accountant review your financial documents and certify you as a wholesale investor. Going through the process of becoming certified has several advantages, as we’ll see next.

Benefits of Being a Wholesale Investor

Preferential Rates - Once you’re deemed to be a wholesale investor, several new doors open up for you. For one, you’ll have access to preferential rates on many funds and investments, meaning you’ll pay less in fees than the average retail investor. As someone with a substantial amount of money to invest, fund companies and others seeking investment are eager to compete for your business.

 

Credit Ratings - Another advantage is that wholesale investors are given access to company credit ratings which are prevented by regulation from being given to retail investors. Because wholesale investors generally possess a higher degree of financial literacy than the average person, this information can be useful in determining when to invest funds in special opportunities presented by companies.

 

Special Access - This brings us to the third and most substantial benefit of being a wholesale investor, which is that you gain exclusive access to investment opportunities not available to the general public. Examples of such investment opportunities include pre-IPO shares, hedge funds and many Australian bonds, which are required to be issued only to wholesale and professional investors.

These investment opportunities may sometimes be offered at a discount; for example, a company looking to raise capital ahead of its IPO may offer shares at a discounted rate that is 20% below the fair market value to bring in a sufficient amount of capital to meet its needs.

Such investments also often carry with them the prospect of higher risk in exchange for potentially higher rewards; it will be up to you as a wholesale investor, however, to determine whether the opportunity is right for you.

 

Other Considerations

Since wholesale investors are deemed to possess a certain level of financial knowledge and proficiency, companies issuing investments that are specifically focused toward wholesale investors are exempt from many of the regulations and restrictions that are designed to protect and provide sufficient information to retail clients. These can include:

  • Statement of Advice (SOA)

  • Financial Services Guide (FSG)

  • Disclosure of fees paid to a fund company when you invest in their fund

  • Information about the consequences of replacing one product with another

  • Access to company complaints handling procedures for clients

The logic behind this is that presumably you’ve done your own research as a wholesale investor and can make your own informed decisions about which opportunities you’d like to take advantage of. While this may seem like a drawback at first blush, in practice it often allows you to more swiftly take advantage of investment opportunities that present themselves.

Conclusion

Being a wholesale investor has its perks over being a retail investor. If you fit the criteria for becoming one, it’s worth considering; if nothing else, it might be worthwhile to see which doors open up for you as a result. Whether you choose to walk through one or not is entirely up to you, and you’re never obligated to do so.

The best advice for any investor, retail or wholesale, is to stick to investments that you can wrap your head around and understand fully, versus chasing the latest shiny object simply because it seems like the trendy thing to do.

Mayfair 101 established IPO Wealth to specifically cater for High Net Worth investors seeking income-producing investments.  For more information visit www.ipowealth.com.au

Disclaimer

This website contains general information only and is not intended to provide any person with financial advice. It does not take into account any person's (or class of persons) investment objectives, financial situation or particular needs, and should not be used as the basis for making investments.

In the Media