SMSF Wholesale Investor Certificate: Understanding the $10 Million Test, ASIC and AFCA

SMSF Wholesale Investor Certificate: Understanding the $10 Million Test, ASIC, AFCA and iCare Super Certificate

For SMSF trustees, financial advisers and investment providers, determining whether an SMSF can be treated as a wholesale client can be more complicated than simply looking at the personal wealth or income of the SMSF members.

The distinction between the SMSF’s own assets and the financial position of its individual trustees or controllers is particularly important.

Recent guidance and AFCA decisions have highlighted the risks of incorrectly classifying an SMSF as a wholesale client. At the same time, qualified accountant certificates remain an important mechanism for establishing wholesale client status in circumstances where the relevant provisions of the Corporations Act 2001 apply.

This article explains the difference between the $10 million SMSF test and the $2.5 million/$250,000 individual test, the different roles of ASIC and AFCA, and when iCare Super may issue a qualified accountant certificate.

What is the current position for SMSFs?

Under section 761G of the Corporations Act 2001, different wholesale client tests can apply depending on the financial product or financial service involved.

Where a financial service relates to a superannuation product, section 761G(6) contains a specific test for a superannuation fund. Broadly, the trustee of a superannuation fund with net assets of at least $10 million can be treated as a wholesale client for a financial service relating to a superannuation product.

This is different from the commonly known $2.5 million net asset or $250,000 income test.

The $2.5 million/$250,000 test can be relevant under section 761G(7)(c) where a qualified accountant certificate is available and the other statutory requirements are satisfied.

The key point is that an SMSF member’s personal wealth does not automatically make the SMSF a wholesale client.

AFCA has stated that, where a financial service relates to a superannuation product, section 761G(6) is the relevant provision and the general section 761G(7) test does not apply in those circumstances.

The $10 million SMSF test

Section 761G(6) is particularly important where the financial service relates to a superannuation product.

The relevant question is whether the SMSF itself satisfies the applicable statutory asset threshold.

In practical terms:

• the SMSF’s own net assets are relevant;
• the threshold is $10 million;
• a trustee’s personal assets do not automatically count towards the SMSF’s assets; and
• a certificate based on an individual’s personal wealth should not be represented as certification that the SMSF itself satisfies the $10 million test.

AFCA’s published guidance states that where advice is provided to an SMSF trustee in relation to the SMSF, the SMSF is generally a retail client unless the fund has $10 million or more in assets. AFCA also states that the general asset, income or investment tests in section 761G(7) do not apply where the financial service relates to a superannuation product.

Why is the $2.5 million test still relevant?

The $2.5 million net asset test and $250,000 income test remain relevant in the wholesale client and sophisticated investor framework.

ASIC’s qualified accountant guidance states that a person can be the subject of a qualified accountant certificate if they have either:

• gross income of $250,000 or more per annum in each of the previous two years; or
• net assets of at least $2.5 million.

However, this does not mean that every SMSF with a wealthy member automatically becomes a wholesale client.

Section 761G(7)(c) concerns the person to whom the certificate relates, and it only applies where the relevant financial product or financial service falls within the scope of that provision.

This is why the wording and identity of the investor on the certificate are important.

ASIC and AFCA: why their positions need to be understood separately

ASIC and AFCA have different functions.

ASIC is Australia’s corporate, markets, financial services and credit regulator. It provides regulatory guidance and administers the qualified accountant framework.

AFCA is an external dispute resolution body that considers complaints and applies the relevant legal framework when determining whether a financial firm has acted appropriately.

ASIC previously indicated that it would not take regulatory action in certain circumstances involving SMSF wholesale client classification because of legal uncertainty. However, ASIC also made clear that this regulatory position did not remove private rights of action.

AFCA has subsequently emphasised that it applies the law as it stands when determining complaints.

Therefore, an adviser or investment provider should not assume that an ASIC no-action position is equivalent to a legislative amendment.

ASIC vs AFCA vs iCare Super

The practical distinction can be summarised as follows:

Issue	ASIC position	AFCA approach	iCare Super approach
SMSF itself treated as wholesale	The $10 million SMSF asset test is relevant where section 761G(6) applies	Looks at the applicable statutory test when assessing a complaint	Does not certify an SMSF as wholesale merely because a member or trustee satisfies an individual wealth test
$2.5m net assets / $250k income test	Can support a qualified accountant certificate under section 761G(7)(c) where the statutory requirements are satisfied	Does not automatically override the specific SMSF test	Can issue a section 761G(7)(c) certificate for an eligible individual where the requirements are satisfied
Trustee/member’s personal wealth	Personal wealth does not automatically make the SMSF wholesale	Personal wealth does not change the statutory classification of the SMSF where section 761G(6) applies	Certificate identifies the relevant individual rather than incorrectly certifying the SMSF
$10m SMSF threshold	Relevant to section 761G(6) where applicable	Legal classification remains important when assessing a complaint	Can provide appropriate evidence where the SMSF itself satisfies the $10m threshold
Investor sophistication	Does not replace the applicable statutory test	Sophistication can be relevant to compensation but does not necessarily change classification	Does not use personal sophistication as a substitute for the applicable statutory test
AFCA complaint risk	ASIC’s regulatory position does not necessarily remove private legal rights	AFCA can determine that an SMSF was incorrectly classified	iCare certificates identify the statutory basis and the person to whom the certificate relates

AFCA decisions demonstrate why the distinction matters

The issue is not merely theoretical.

AFCA has published examples where SMSFs with less than $10 million in assets were incorrectly treated as wholesale clients.

In one case, an SMSF had less than $10 million in assets but was permitted to access a wholesale managed discretionary account and margin foreign exchange trading with high leverage. AFCA found that the SMSF was a retail client because the financial services related to a superannuation product and the SMSF did not satisfy the $10 million threshold.

The case is particularly relevant because the individual behind the SMSF had personally satisfied the $2.5 million wealth test and had a qualified accountant certificate.

AFCA nevertheless concluded that the accountant’s certificate could not be relied upon to classify the SMSF itself as a wholesale client in those circumstances.

This demonstrates the fundamental difference between:

• an individual satisfying a wholesale client test; and
• an SMSF itself satisfying the statutory $10 million test.

AFCA has also stated that investor sophistication may be considered when determining compensation, but sophistication does not itself change the legal classification of the SMSF.

Practical examples

Example 1 — SMSF has $4 million and member personally has $3 million

John is the sole member of ABC SMSF.

ABC SMSF has $4 million in net assets.

John personally has $3 million in net assets.

John may satisfy the $2.5 million individual net asset test in circumstances where section 761G(7)(c) applies.

However, John’s $3 million personal assets do not become assets of ABC SMSF.

Therefore, the SMSF does not have $7 million of assets for the purpose of the SMSF’s $10 million test.

If the financial service relates to the SMSF’s superannuation product and section 761G(6) applies, the relevant question is whether ABC SMSF itself has at least $10 million in net assets.

Example 2 — SMSF has $12 million

Sarah is the sole member of XYZ SMSF.

XYZ SMSF has $12 million in net assets.

Where section 761G(6) applies, the SMSF itself satisfies the $10 million asset threshold.

This is different from Sarah personally satisfying the $2.5 million test.

The SMSF’s own assets are sufficient for the relevant SMSF test.

Example 3 — Individual invests in a non-superannuation product

David personally wants to invest in a financial product that is not a superannuation product and the relevant financial service does not relate to a superannuation product.

David has $3 million in net assets.

If all the requirements of section 761G(7)(c) are satisfied, David may be able to provide a qualified accountant certificate confirming that he satisfies the $2.5 million net asset threshold.

In this situation, the certificate relates to David personally.

This is the type of situation in which a section 761G(7)(c) certificate may be relevant.

Example 4 — SMSF invests in a product and provider asks for an “SMSF wholesale certificate”

ABC SMSF has $4 million in assets.

John, its sole member and director of the corporate trustee, has $3 million in personal assets.

The investment provider asks:

“Please provide a wholesale certificate confirming that ABC SMSF is a wholesale client.”

The accountant should not simply change the investor name to ABC SMSF and rely on John’s personal $3 million.

If section 761G(7)(c) is applicable to the particular product or service, the certificate should identify the relevant individual and the statutory basis for that individual’s wholesale status.

If section 761G(6) applies, the SMSF’s own $10 million threshold must instead be considered.

Example 5 — Why the wording matters

Consider two certificates.

Certificate A states:

“ABC SMSF is a wholesale client because its member has net assets of more than $2.5 million.”

Certificate B states:

“John Smith satisfies the $2.5 million net asset test for the purposes of section 761G(7)(c). This certificate does not certify that ABC SMSF satisfies the $10 million net asset requirement under section 761G(6).”

Certificate B is much clearer because it identifies:

• the person being assessed;
• the statutory provision;
• the financial test; and
• the limitation of the certificate.

This is the approach iCare Super intends to follow when issuing an appropriate qualified accountant certificate.

When can a qualified accountant certificate be used?

A qualified accountant certificate under section 761G(7)(c) is not a general-purpose “SMSF wholesale certificate”.

It is a certificate concerning the financial position of the person to whom the certificate relates.

ASIC’s current guidance confirms that a qualified accountant certificate may be used for the relevant Chapter 7 wholesale client framework where the statutory requirements are satisfied.

The relevant financial thresholds are:

• net assets of at least $2.5 million; or
• gross income of at least $250,000 in each of the previous two financial years.

The certificate must also satisfy the other applicable requirements.

When can iCare Super issue a certificate?

iCare Super can consider issuing a qualified accountant certificate under section 761G(7)(c) where the relevant requirements are satisfied.

This may include circumstances where:

1. section 761G(7)(c) applies to the relevant financial product or service;
2. the named individual satisfies the $2.5 million net asset or $250,000 income test;
3. sufficient supporting evidence has been provided;
4. the correct individual or controller is identified;
5. any controlled company or trust included in the calculation is appropriately considered;
6. the accountant satisfies the applicable definition of a qualified accountant; and
7. the certificate is prepared and dated appropriately.

ASIC’s 2026 qualified accountant instrument continues the framework under which eligible members of recognised professional bodies can be treated as qualified accountants for these certification purposes.

What evidence does iCare Super require?

A qualified accountant certificate should not be issued simply because a client states that they satisfy the financial threshold.

Depending on the circumstances, iCare Super may consider evidence such as:

• financial statements;
• tax returns;
• notices of assessment;
• bank statements;
• investment statements;
• property valuations;
• loan and liability information;
• company financial statements;
• trust financial information; and
• other relevant supporting documentation.

ASIC states that controlled companies and trusts may, in appropriate circumstances, be included in the calculation of net assets or gross income. The relevant control provisions refer to section 50AA of the Corporations Act.

The accountant should therefore establish the basis for the calculation rather than simply accepting an unsupported declaration.

What does the certificate actually certify?

A section 761G(7)(c) certificate should make its scope clear.

It may confirm that the named individual satisfies:

• the $2.5 million net asset test; or
• the $250,000 gross income test for each of the preceding two financial years.

It should not imply that:

• the individual’s SMSF automatically satisfies the $10 million test;
• every financial product can be treated as a wholesale investment;
• the individual is automatically sophisticated for every statutory purpose; or
• the certificate replaces the product issuer’s own legal and compliance obligations.

The product issuer must determine whether the certificate can be relied upon for its particular product or service.

Chapter 6D or Chapter 7?

This is another area where generic accountant certificate templates can cause confusion.

Chapter 6D is relevant to fundraising and certain offers of securities, including the sophisticated investor provisions under section 708.

Chapter 7 contains the financial services and wholesale client framework, including section 761G(7)(c).

ASIC confirms that qualified accountants can issue certificates for relevant purposes under both section 708(8)(c) and section 761G(7)(c).

Therefore, if iCare Super is issuing a certificate specifically under section 761G(7)(c), it is preferable to clearly identify:

“Chapter 7 – Section 761G(7)(c) – Wholesale Client”

rather than using the generic wording:

“Chapters [6D or 7] of the Corporations Act 2001.”

The generic wording comes from sample certificate material designed to cover different circumstances.

For an iCare Super certificate, identifying the exact statutory provision provides greater clarity.

iCare Super Section 761G(7)(c) Certificate Template

The following is a model template for an iCare Super qualified accountant certificate where section 761G(7)(c) is applicable.

It is not an ASIC-prescribed form and should be adapted to the particular product, issuer and circumstances.

QUALIFIED ACCOUNTANT CERTIFICATE

Corporations Act 2001 – Section 761G(7)(c)

Chapter 7 – Wholesale Client

To: [Name of financial product issuer / provider]

1. Person to whom this certificate relates

Full name: [Full legal name]

Address: [Residential/business address]

2. Financial product or financial service

Financial product/service: [Name and description]

Product issuer/provider: [Name of issuer/provider]

This certificate is provided for the purpose of assessing whether the above-named person may be treated as a wholesale client under section 761G(7)(c) of the Corporations Act 2001.

3. Qualified accountant certification

I, [full name of accountant], confirm that I am a qualified accountant for the purposes of the Corporations Act 2001 and that I meet the applicable professional membership and continuing professional education requirements.

Based on the information and supporting documentation made available to me, I certify that the person named above satisfies at least one of the following financial thresholds:

☐ Net assets of at least $2.5 million

OR

☐ Gross income of at least $250,000 per annum in each of the previous two financial years

4. Basis of assessment

In making this certification, I have considered information and documentation relevant to the person’s financial position, which may include:

• financial statements;
• tax returns and notices of assessment;
• investment and bank statements;
• property valuations;
• loan and liability information;
• company or trust financial information; and
• other relevant supporting documentation.

Where applicable, assets or income of an entity controlled by the person have been considered in accordance with the relevant provisions of the Corporations Act 2001.

5. SMSF clarification

Where the person named above is a member, trustee or director of an SMSF, this certificate relates to the financial position of the person identified in this certificate.

This certificate does not certify that the SMSF itself satisfies the $10 million net asset requirement under section 761G(6) of the Corporations Act 2001.

Where a financial service relates to a superannuation product, the applicable statutory requirements concerning the SMSF’s own assets must be considered separately.

6. Accountant details

Accountant name: [Full name]

Professional body: [CPA Australia / CA ANZ / IPA / other applicable body]

Membership designation: [CPA / FCPA / CA / ACA / FCA / AIPA / MIPA / FIPA]

Membership number: [Number]

Business name: [iCare Super / relevant practice]

Business address: [Address]

Email: [Email]

Telephone: [Telephone]

7. Declaration

I confirm that:

• I am a qualified accountant for the purposes of the relevant provisions of the Corporations Act 2001;
• I comply with the applicable continuing professional education requirements of my professional body;
• I have considered the information and documentation provided to me in forming this certification; and
• this certificate is issued for the purpose stated above.

Signature of qualified accountant: __________________________

Name: [Full name]

Date of issue: ____ / ____ / ______

Important limitation of the iCare Super certificate

The certificate should not simply be described as an “SMSF wholesale certificate”.

Where it relies on section 761G(7)(c), it certifies the financial position of the named person for the purposes of the relevant Chapter 7 wholesale client test.

It does not, by itself, establish that an SMSF has $10 million or more in net assets.

This distinction is critical.

If the financial service relates to a superannuation product and section 761G(6) applies, the SMSF’s own asset position must be considered.

A certificate based on a member’s personal $2.5 million net assets should not be used as a substitute for the SMSF’s $10 million test.

What if the investment is not a superannuation product?

The analysis can be different where the financial product or financial service does not relate to a superannuation product.

This is one reason the exact nature of the investment and service should be established before issuing a certificate.

For example, where an individual is investing personally in an eligible non-superannuation financial product, section 761G(7)(c) may be relevant if the individual satisfies the prescribed financial threshold and all other requirements are met.

The fact that an individual happens to be an SMSF member does not automatically prevent the individual from being a wholesale client in their own capacity.

The important question is what product or service is being provided and to whom.

Certificate validity

ASIC’s current guidance states that certificates under Chapters 6D and 7 can generally be valid for up to two years from the date of issue.

However, the particular product issuer may impose additional requirements or request a more recent certificate.

Trustees and advisers should therefore check the requirements of the relevant investment provider before relying on an existing certificate.

The certificate should also be reviewed if the relevant financial circumstances have materially changed.

What trustees should check before requesting a certificate

Before requesting a wholesale client certificate, an SMSF trustee should ask:

1. What financial product or service is involved?
2. Is the service related to a superannuation product?
3. Does section 761G(6) apply?
4. Does the SMSF itself satisfy the $10 million threshold?
5. If section 761G(7)(c) is relevant, who is the person to whom the certificate relates?
6. Does that person satisfy the $2.5 million or $250,000 test?
7. Has sufficient evidence been provided to the qualified accountant?
8. Are controlled entities being included correctly?
9. Does the investment provider have additional requirements?
10. Is the certificate current and within the applicable validity period?

What investment providers should check

Investment providers should also be careful about requesting a generic “SMSF wholesale certificate”.

The provider should identify whether it requires:

• evidence that the SMSF itself satisfies the $10 million test;
• a section 761G(7)(c) qualified accountant certificate;
• a section 708(8)(c) sophisticated investor certificate for a securities offer; or
• another form of investor classification.

The correct certificate depends on the product, service and statutory provision involved.

ASIC’s current qualified accountant framework

ASIC has continued the qualified accountant framework through ASIC Corporations (Qualified Accountant) Instrument 2026/734.

The instrument sets out which members of professional bodies are recognised as qualified accountants for the purposes of issuing certificates that allow a person to be treated as a wholesale client or sophisticated investor. ASIC states that the 2026 instrument continues the previous arrangements with minor updates.

ASIC also confirms that issuers receiving a qualified accountant certificate can generally rely on the face of the certificate if the applicable requirements are satisfied, including that the certificate is issued by a qualified accountant, is appropriately dated, identifies the relevant Chapter and states that the person satisfies the required financial threshold. For Chapter 7, the issuer must also consider whether the product or service is being used in connection with a business.

iCare Super’s approach

At iCare Super, our approach is to identify the applicable statutory test before issuing a certificate.

Where section 761G(7)(c) applies and the relevant requirements are satisfied, iCare Super can consider issuing a qualified accountant certificate based on the financial position of the named individual.

Where section 761G(6) applies, the assessment instead focuses on whether the SMSF itself satisfies the relevant $10 million asset threshold.

This approach helps ensure that the certificate identifies:

• the correct person;
• the correct financial product or service;
• the correct statutory provision; and
• the correct financial threshold.

Key takeaway

The term “SMSF wholesale certificate” can be misleading because there is no single wholesale client test that applies in every situation.

The critical questions are:

• What financial product or service is involved?
• Does the service relate to a superannuation product?
• Does section 761G(6) apply?
• Does the SMSF itself have at least $10 million in assets?
• Or is section 761G(7)(c) available for an eligible individual?
• Does the individual satisfy the $2.5 million or $250,000 test?
• Has the qualified accountant issued the correct certificate?
• Can the product issuer legally rely on that certificate?

The $10 million SMSF test and the $2.5 million/$250,000 individual test serve different purposes.

The distinction is particularly important given AFCA’s published approach to SMSF wholesale client classification and the continuing ASIC framework for qualified accountant certificates.

A properly prepared certificate should therefore identify the correct investor, statutory provision, financial threshold and purpose.

Need a wholesale client certificate?

If you are an SMSF trustee, financial adviser or investment provider and need assistance determining the appropriate wholesale client documentation, iCare Super can assist with the relevant assessment and, where appropriate, provide a qualified accountant certificate.

Contact iCare Super to discuss your circumstances and the documentation required before making or accepting an investment.