Are you a sophisticated investor ??

[Dazz]

Funny thing happened to me yesterday.

Was emailed a 'standard proforma'.....warning bells ringing already.....from my Banker asking me if it was OK for my accountant to fill in the form and certify that I qualified as a "sophisticated investor".

I quickly sent a note off to both of them saying that I was far from a sophisticated anything....more like a dodgy roughneck with a few plots of industrial dirt - not exactly what I had in mind for a "sophisticated investor".

My accountant called me this morning to agree, that indeed I was nowhere near what he'd call sophisticated. We both had a good chuckle.

Anyway, my accountant set me on the straight and narrow, apparently the Bank wants the form so it can send me unsolicitored offers and by-pass the whole ASIC prospectus thing.

What they are trying to flog to me, managed funds and the like....I'm not interested in buying, but just thought it interesting that in the legislation there is a term called a "sophisticated investor", with very specific criteria...dunno what they are though....who apparently can purchase, and likewise the Banks and other friendly organisations can sell to, things without the benefits of a prospectus.

Anyone on this forum lawfully classifed as a 'sophisticated investor'.

 

[JIT]

I read somewhere it was like > $2.5 million in net worth, or, >$250,000 pa income for at least 2 years....not sure though.

GSJ

 

[see_change]

I've never looked at it from the point of view of getting offers for investments that would otherwise not be sent to you if you were considered a " retail investor ".

Dazzling , given what you've done I would think you'd classify as a sophisticated investor and I would imagine many others on the forum would fit the catagory , though I'd have a guess someone like Dale / Nick or the Rolfs would be in a better position to comment on what the actual technical definition is.

See Change

 

[JIT]

Just a random web search reveals another class of investor, the 'Professional Investor':

A person who controls/manages at least $10 million of investment in securities, or holds a dealer’s licence or investment adviser’s licence.

GSJ

 

[sailor]

Dazz...I may not come under the category of a "sophisticated investor", but I do wear high heels, so I reckon that makes me a "classy investor". Is that a legit category?

 

[geoffw]

Dazz...I may not come under the category of a "sophisticated investor", but I do wear high heels, so I reckon that makes me a "classy investor". Is that a legit category?

Girls wearing high heels may be classy- but less classy if, for instance, I was wearing them.

 

[Tim]

The Corporations Regulations prescribe the asset and income criteria which must be met before you a certificate of 'sophisticated investor' status can be issues (by an Accountant).
A person is only eligible to be the subject of a certificate if they have:

- a 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 (reg 6D.2.03 and reg 7.1.28).

The rationale is that people meeting one of these criteria are more likely to be able to evaluate offers of securities and some financial products (such as interests in managed investment schemes) without needing the protections of a regulated disclosure document.

http://www.asic.gov.au/asic/asic_po...issued+by+a+qualified+accountant?openDocument

 

[alexlee]

While it would be a pain to get calls from banks, etc about this stuff all the time, I would find it interesting to receive such offers by email or mail to read at my own leisure. Not necessarily to invest in but to get a feel for what's out there? Can you specify that all such info is to be received by mail and email only without phone calls?
Alex

 

[grossreal]

hi all
this is a very interesting part of investing.
with regards to sophisticated investors you can't ask someone to join your project but if they say they are a sophisicated invetor then the they can join.
it is up to thenm to inform you that they are a sopisticated investor.
hence the bank is asking you dazzling.
they can put there hand on their heart and say he did say he was a sophisticated investor.
the asic rules are like a sive and this is a hole that is very hard to plug.
it is interesting that a bank is asking this as it will add you to alot of lists that you may want to have a look at.
I run hotmail accounts so I can get rid of alot of these invites but they can be very interesting.
and Tim not sure your right you could have 100k and say that you are a sophisticated investor and be on the lists.
there is no control on this market at all and is the basis for main stream business lending.
as soon as you add yourself to these lists you do so with the intent to take you outside the normal prospectus,asic,regulatory deals and into the funny areas of investing.
not sure about the high heels .
the lender or bank will have come from a deal that fits there profile for a project and cold sell to you.
and yes I am on the list of a couple groups.
and no they have not asked networth or any form of proof.

 

[RichardC]

There is much more to this than "bragging rights".

At this point I am talking more about the US laws than ours but I think they are similar. If you are not an SI and invest in any pooled investment, by law that fund cannot undertake any type of investment which you could not reasonably be expected to understand. This means said fund cannot hedge it's positions. WOW! Enforced discrimination! Mr and Mrs J. Sixpack, by law, cannot invest in hedge funds. (A "right" I am happy to live without BTW)

I don't know about you guys but I reserve the right to go to hell in my own way.

The more observant with the better memories may recall a caveat I have added, a couple of times, to discussions about margin lending on shares where I have warned that it is not considered "retail" banking and you are not a protected retail client.

I have recently spent a few hours with a "private banker", I assume so that they can offer me (profitable) services without the shackles of consumer law. On the grounds that I don't need that protection (sophisticated or arrogant?) I am willing to see what they offer me. Seems that awful $30 "honour fee" if I go over my limit (that's the small end) and the 60%lvr on indusrtrial/commercial property are negotiable.

Don't be an anti-snob Dazza, listen with an open mind.

 

[sailor]

The more observant with the better memories may recall a caveat I have added, a couple of times, to discussions about margin lending on shares where I have warned that it is not considered "retail" banking and you are not a protected retail client.

I have recently spent a few hours with a "private banker", I assume so that they can offer me (profitable) services without the shackles of consumer law. On the grounds that I don't need that protection (sophisticated or arrogant?) I am willing to see what they offer me. Seems that awful $30 "honour fee" if I go over my limit (that's the small end) and the 60%lvr on indusrtrial/commercial property are negotiable.

Don't be an anti-snob Dazza, listen with an open mind.

Being only a "classy investor", I'm not yet in the league of "sophisticated investors", and quite frankly don't even know what a "private banker" is.
However, when you mention negotiable 60%LVR on industrial/commercial lending...I'm all ears.

Would you mind explaining to me how this private banking stuff works? Who does it? What are the pitfalls?

 

[The Y-man]

Would you mind explaining to me how this private banking stuff works? Who does it? What are the pitfalls?

Most banks have a private banking arm

http://www.westpac.com.au/internet/publish.nsf/Content/PBSVPB+Membership+criteria

http://www.anzprivate.com/default.asp

http://www.stgeorge.privatebank.com.au/home/default.asp

Cheers,

The Y-man

 

[sailor]

Tx Y-Man.

 

[willair]

.Anyway, my accountant set me on the straight and narrow, apparently the Bank wants the form so it can send me unsolicitored offers and by-pass the whole ASIC prospectus thing.

Dazzling,with your investment experience and skills i think you would fit into
that list of a Sophiticated investors/IMHO/ i Don't see a problem with the
Banks sending you unsolicited approaches all i want to know is how do
normal investor like myself get on the list?
good luck willair.........

 

[Les]

G'day Dazzling,

Anyone on this forum lawfully classifed as a 'sophisticated investor'.

Hehe - I'd put money on it !! But whether any will "own up" is quite another story. Right off the bat, though, I can think of at least 10 names that I reckon would qualify. But it's not my place to name anyone who doesn't want to name themselves. (A bit like "the Rich List" really, isn't it).

Suffice to say, it's a feather in your cap that some Bank is wanting to include you. Roughneck or not, you must have been doing some seriously good investing.

Well done,

Regards,

 

[Dazz]

Don't be an anti-snob Dazza, listen with an open mind.

LOL....still scratching my head trying to figure out whether being an anti-snob is a good thing or bad thing....hahahaha


In terms of what a Private Banker is, basically someone assigned to you to look after your 'file'.

As I wrote in a previous post, the "Personal Banker" usually has about 500 people assigned per Banker.....not too personal you'd have to agree, but better nonetheless than being part of the great unwashed who drift in from the street.

A "Private Banker" usually has about 70 to 80 clients per Banker....once again not that flash, but certainly you are paid more attention and given little tid bits here and there.

I believe the next step up is "Institutional status", and I think you get pretty good service, with only about 5 or 6 clients per Banker. I imagine this is what people have in their mind when they are assigned a "Personal Banker", but alas it is not to be. Cracking into this group is our preferred position, as the burden of Bank vs client, risk-wise is finally evenly matched.

I'm guessing now, but methinks there is another level yet above this, where basically the Banker wipes your nose and is authorised to wipe the crumbs from the side of your moosh after you have devoured your latest acquistion with the Banks money.....a bit like Grandma used to do when you were a kid with her hanky after she licked it a few times....


As for 60% lvr's on CIP and IIP's.....don't know where that came from, but getting 75% is a doddle nowadays, however trying to push the 80% is a bit like pushing the proverbial up a steep incline with a stick of wet spaghetti.


Cheers for now.

 

[sailor]

So...does one ask for a private banker, or does the bank offer this service when one has reached a certain criteria?

 

[JoannaK]

i believe it is offered..

 

[RichardC]

LOL....still scratching my head trying to figure out whether being an anti-snob is a good thing or bad thing....hahahaha

It's not a good or bad thing. It's an "Aussie! Aussie! Aussie! Oi! Oi! Oi!" thing.

And I am under no illusions that a "private banker" is anything more than your branch manager once was. Fancier title but. I still nremember Wal Nicholson, the manager who organised my first loan near 40 yrs ago, and will say 'gday when I see him.