You know exactly why it wasn't offered to retail, we would still be in the process of compilling all the required disclosure documents. And you know the difference in disclosure documents between retail and wholesale or have you suddenly forgotten? I am sure if it was offered to retail you would have come up with some jargon about sophs not having the faith to invest so thats why a SPP was undertaken. You would call a spade a shovel.
The primary difference between retail and wholesale products is in the level of compliance involved with each investment. Disclosure requirements and regulations tend to be a lot higher for retail products, with the intention being to provide investors with a greater level of consumer protection.
Wholesale products are generally designed to cater to more experienced investors, and as such will usually involve fewer compliance obligations and less regularly requirements under ASIC (The Australian Securities & Investments Commission). The rationale behind this is that people who are considered wholesale investors are more likely to be able to evaluate interests in a fund without needing the protection of a regulated disclosure statement like a PDS.
Some of the notable differences between a retail and wholesale investor include:
- Retail investors will generally receive all the consumer protections set out in The Future of Financial Advice (FOFA) reforms. This legislation is intended to provide investors with protection from poor financial advice whilst ensuring the availability and affordability of high-quality financial advisors. Wholesale investors will generally have less protection in these areas.
- Retail investors must be provided with a Product Disclosure Statement (PDS) that includes material on a product’s key features, fees, commissions, benefits, risks and complaints handling procedures. This is something a wholesale investor might choose to forgo in favour of a more simplistic Information Memorandum (IM). These aren’t regulated in the same way as the PDS and are not governed by specific content requirements.
- ASIC requires funds open to retail investors to meet increased governance requirements, including an approved constitution and compliance plan, a mandated net tangible assets requirement, and an authorisation for licensee on the investment type (amongst others). In contrast, wholesale investor funds may be able to vary these requirements as part of the trust deed.
And yes that is from funds management, feel free to post the one for shre placements.
