According to Section 708(8)(c), to be classified as a sophisticated investor, an individual must obtain a certificate from a qualified accountant stating that the individual has received a gross annual income surpassing $250,000 for the last two financial years or has over $2,500,000 in net assets. The term ‘sophisticated investor’ also applies to a company or trust that is controlled by an individual fulfilling the requirements of Section 708(8)(c).
A qualified accountant is defined as members of the Chartered Accountants Australia and New Zealand or the Institute of Public Accountants. The certificate is valid for a period of two years, after which another certificate must be provided.
An individual can also be considered a sophisticated investor if they have a statement from an Australian Financial Services licensee acknowledging that that individual has suitable experience to assess the features of the offer. However, this does not apply to general insurance, RSA, or superannuation products.