'Wholesale investor' term outdated: ASIC

The term ‘wholesale investor’ needs to be updated, according to the Australian Securities and Investments Commission (ASIC), as wealthy investors who haven’t sought advice are being aggressively targeted by some firms.

In a webcast with the Financial Services Council, Rhys Bollen, senior executive leader, investment managers at ASIC, said the Mayfair 101 case was a good example of where a product was not ‘true to label’ and targeted the wrong audience.

The firm’s advertising was found by the Federal Court to have been deceptive and misleading and inaccurately likened the products to term deposits. The firm was targeting wholesale investors, classed as those who were willing to invest $500,000 in a fund but who may not seek advice.

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Bollen said: “The term wholesale needs to be updated, it was created in the early 90s and then included in the Corporations Act in 2001. It is a matter for the Government to decide whether it needs to be updated but there has been a lot of change since it was introduced and it is time for it to be reconsidered.

“Mayfair was a clear case of [a firm] targeting unsophisticated, vulnerable, wholesale consumers who were seeking a regular income and higher returns. It had a very aggressive online presence via metadata, sponsored links and Google searches in an attempt to divert investors who were interested in term deposits to invest in Mayfair products.

“We have seen an increase in firms targeting those investors who are avoiding advice.”

He said there were “at least two other firms” being investigated by ASIC of true to label marketing of their products in 2020/21 which were as yet unresolved.

In order to be true to label, ASIC would be looking at whether a fund included the risk/return focus, balanced and meaningful explanation of risk, how returns were calculated and disclosed and appropriate use of benchmarks.




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Ahem; so corrupt ASIC is investigating "true to label marketing of their products", "whether a fund included the risk/return focus, balanced and meaningful explanation of risk, how returns were calculated and disclosed and appropriate use of benchmarks", "deceptive & misleading advertising" - then why the f*ck hasn't it EVER looked at all these exact known and otherwise identified issues in union industry super funds?

Wow just imagine if ASIC wasn’t so Regulatory Capture Corrupt and applied this to Industry Super / Hostplus, etc
94% Growth Assets so called “Balanced Funds” as per APRA’s heat map.
“In order to be true to label, ASIC would be looking at whether a fund included the risk/return focus, balanced and meaningful explanation of risk, how returns were calculated and disclosed and appropriate use of benchmarks”.
ASIC you are so disgustingly corrupt.
Best buddies Industry Super will never be regulated, can do whatever they like.
What a sad joke is ASIC :-/

ASIC is expressing an opinion. Is it the regulator or the policy maker??? When it suits ASIC it is merely the regulator and others set the policy... However when it suits ASIC's internal agenda it is the policy maker and actively suggesting changes.....

Well AFCA are already proud to say they take complaints from wholesale investors because even though they meet the financial benchmarks, if they dont have extensive experience investing AFCA will throw out the Acc Wholesale Certificate. So why change a law if AFCA are already a law upon themselves?

The out of date problem here is ASIC.
Regulatory Capture Corruption to Industry Super.
Hopelessly conflicted Left Wing Loonies.
What needs to change is ASIC.
Kill them from Adviser regulation and start again with Real Advisers involved.
Drain the ASIC swamp !!!

The solution to all of this mess is simple. Ban product floggers from employing financial advisers, and then all financial advisers (who have completed exam & qua(s) to treat clients as wholesale clients. With conflicts gone, the parade of insane red tape crap that clients don't want or need, will not be required. Oh hang on, that would be bad for industry funds, so ASIC would never do it.

I can say from first-hand experience confronting ASIC head-on in the Mayfair 101 matter that they are the destroyers of value, not the investment managers. If the rules needed changing they should have taken a humane, sensible approach. ASIC is the single biggest risk to every alternative investment manager and their investors. This sad fact is what should be disclosed in offer documents so innocent investors are aware of where the real risk exists. On behalf of Mayfair 101’s investors I am appalled at the individuals including Rhys Bollen who have tackled a legislative issue by abusing their powers. If ASIC’s personnel cannot understand or police the rules for what they are, and do so uniformly, then they are the single biggest risk to the investment industry. I hope all investment managers factor this risk into their business as it is far greater than anyone could comprehend.

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