“Ultimately, the decision that was made in the final report was to not make any changes in respect to those current thresholds that exist. They didn't see any reason for or justification to make changes to those thresholds.”

However, Dunn said two recommendations came out of the report. The first was that the government should consider establishing a mechanism to undertake a periodic review to assess things like the thresholds and what should and shouldn't be included, while the second was to remove the subjective elements that sit within that sophisticated investor test from the Corporations Act.

“When removing that subjective information, it introduced objective criteria that specifically relate to knowledge and experience of the investor,” he said.

“To do that, they would want to ensure that there is again a period of stakeholder consultation, but again, we're trying to address specifically some of the concerns that have been flagged in here for some period of time now.”

He continued that there has been a level of consistency since ASIC released guidance in 2014, and although it's not perfect, it's something the industry has generally stood strong on.

“This is really where and what we've relied upon when we look at either a retail definition or a wholesale definition from a client,” Dunn said.

“[It stated] firstly where a financial service relates to a superannuation product, a trustee of a fund will be classified as a retail client unless the fund holds net assets of $10 million at the time of service has been provided. If we compare and contrast that to the wholesale client definition, it states the circumstances in which the trustee will be a wholesale client will include if the trustee has a certificate from a qualified accountant stating that they have met that net asset test of $2.5 million or if the value of the investment is at least $500,000.”

However, he said the recent AFCA decision around the definition has, in the past six months, “potentially thrown the cat amongst the pigeons” as it appears to run contrary to what has generally been seen within the industry.

“In that instance, in essence, what they've said is they should be looking at SMSF using the $10 million threshold rather than the $2.5 million threshold.”

“I know the SMSF Association and others were looking at threshold changes, but we do appear to have a period now where we've got differing views in respect to what different bodies are saying, and it is something of which advisers should be aware. There has been some push by the accounting bodies to look to remove accountant certificates, but there were no recommendations to do that either.”