Retail vs Wholesale Clients – how are they different?
27 October 2023

Determining whether someone is a wholesale or retail client can be complicated. However, it is important to understand this distinction as it has significant legal and practical implications. The legislature’s focus on protecting retail clients means that the legal obligations surrounding the provision of financial services and products to this type of client are more extensive than those applying to wholesale clients. Retail clients are also more restricted than wholesale clients in terms of the financial markets and products available to them. It is therefore essential to determine which category your clients fall within in order to understand the relevant obligations and restrictions.

Wholesale clients are generally considered to be more experienced, informed and financially sophisticated than retail clients. Wholesale clients are most commonly large businesses or high net worth individuals, while retail clients tend to be small businesses and individual investors. However, it should be noted that a client can fall within both categories at the same time for different products and services. To fall within the wholesale category, clients must satisfy one of 5 eligibility criteria in the Corporations Act 2001 (Cth). All clients that do not satisfy the wholesale criteria are considered retail clients. For investment based financial products and services, the criteria are:

Sophisticated investors

This criterion is aimed at clients with sufficient experience in dealing with financial products or services to make well-informed decisions. A client is considered a sophisticated investor if the provider of financial services/products is satisfied on reasonable grounds that the client has the necessary experience. The provider must give the client a written statement of the reasons for being satisfied of the above and the client must sign certain written acknowledgments.

Professional investors

Institutional clients are considered professional investors if they satisfy one of several criteria. These include holding an Australian Financial Services Licence (AFSL), carrying on an investment business or controlling over $10m in assets, among others.

Product value

If the value of the financial product being invested in or advised on exceeds $500,000, the client is considered a wholesale client in relation to that product.


Persons with net assets of at least $2.5m or a gross annual income of over $250,000 fall within the wholesale category.

Large businesses

Non-manufacturing businesses are considered wholesale clients if they have more than 20 employees. Businesses involved in manufacturing goods must have over 100 employees to be considered wholesale clients.

For more information on the distinction between wholesale and retail clients, including licensing solutions based on your client type, contact us.

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