Frequently Asked Questions

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SOPHISTICATED INVESTING

  • What is a sophisticated investor?
    To be considered a sophisticated investor your accountant needs to certify that you:
    • Have earned an income of $250,000 or more per annum for the last two years or
    • Hold net assets of at least $2.5 million.

    Sophisticated investors can access investment opportunities not generally available to retail investors. These can include pre-IPO capital offers, equity placements, private equity, property syndicates, hedge funds, and other unlisted securities.

    To be considered a sophisticated investor, you need a Qualified Accountant’s Certificate (also called a Sophisticated and Wholesale Investor Certificate or Investor Certificate) signed by your accountant, verifying your assets and/or income. Certificates are valid for two years and you need to make your initial investment within six months of obtaining your certificate.

    Further information on this can be found in Chapters 6D and 7 of the Corporations Act 2001.
  • What is a wholesale investor?
    If you are investing more than $500,000 in a single investment opportunity, you are considered a wholesale investor.

    Wholesale investors are subject to the same Investor Certificate requirements as sophisticated investors, but are defined under Chapter 7 of the Corporations Act (2001).
  • What is a sophisticated investor certificate?
    Before you can access sophisticated or wholesale investments, you must hold a Qualified Accountant’s Certificate (or Investor Certificate).

    This test is prescribed in the Corporations Act 2001 as being either:
    • A gross income of $250,000 or more p.a in each of the two previous years or
    • Net assets of at least $2.5m

    A certificate must be signed by a qualified accountant.
    A qualified accountant is defined in s88B of the Act as a person meeting the criteria in a class declaration made by ASIC. Under ASIC’s class order [CO 01/1256] you are a qualified accountant if you:
    • belong to Chartered Accountants Australia and New Zealand, CPA Australia or Institute of Public Accountants (IPA) at the declared membership classification,
    • or some eligible foreign professional bodies, and
    • you comply with your body's continuing professional education requirements.
    Visit the ASIC website for more information.

    Electronic certification with Cygura is a compliant way for accountants to certify sophisticated investors and wholesale clients under Chapters 6D and 7 of the Corporations Act 2001.
  • How long does my certificate last?
    Under the Corporations Act 2001, certificates are valid for up to two years.
  • Where do I find a sophisticated investor certificate template?
    Certificates created in Cygura meet ASIC guidelines for certifying sophisticated investors and meet all regulatory requirements.
  • Who needs to see my certificate?
    It depends on the types of investments you are trying to access, or who you are dealing with.

    For instance, some Private Banks will only provide general advice, and as such require you to have a valid Investor Certificate. Other examples can include stockbrokers or specialist financial advisors who are only providing general advice. Financial product providers (eg property syndicate or hedge fund) may also require a certificate if you invest directly.

    Having a certificate may allow you access to firm allocations in equity raisings, structured products, seed funding opportunities, and angel investing.
  • What are the benefits of being a sophisticated investor?
    Having an Investment Certificate allows you to be offered investment opportunities which are not available to retail investors. These can include:
    • Pre-IPO offers
    • Property syndicates
    • Hedge funds and
    • Unlisted securities, such as capital raisings for private companies

    Additionally shares are often priced at a discount to usual retail offerings.

    Some sophisticated investors seek out these opportunities as diversification from traditional asset class investments. Some of these investments may have higher return characteristics, but it’s important to be aware that they may also carry greater risks.
  • What are the risks associated with being a sophisticated investor?
    The income or net asset tests are designed by the regulators with the view that people meeting these criteria are more likely to be able to evaluate the merits of the offer of securities and financial products they wish to invest in.

    You may meet the asset and income tests and still choose not to be a Sophisticated Investor. This means that you are considered retail, and therefore offered greater disclosure and protection by the Regulator.

    By confirming your registration and being certified by a qualified accountant, you are essentially “opting in” to be a sophisticated or wholesale investor. This means you may not receive product disclosure statements or prospectuses from product issuers, and your advisors are not required to give you a Statement of Advice or have the same dispute resolution processes in place.
  • Can I access sophisticated investments and still be protected by ASIC?
    It depends on your unique situation.

    For instance, some Sophisticated Investors may use a Financial Advisor who may treat them as a Retail Investor by providing them with additional disclosure such as a Statement of Advice (SOA). This means they are receiving personal financial advice and have retail protections under the Law. SOAs are meant to be clear concise and effective, providing sufficient information for you to understand the advice and consent to any recommendations. You do not need an Investor Certificate to deal with this advisor.

    This same Sophisticated Investor may wish to diversify their portfolio and invest in a hedge fund. They may also bank with a Private Bank, and be offered other financial products. In this instance, the Investor is considered Sophisticated or Wholesale with these Financial Service Providers, and would require an Investor Certificate for these investments.

    By using Cygura you choose which advisors and product issuers can see your certificate, so you know exactly who is relying on your certificate, and who you have waived retail protections with.
  • What happens if I no longer wish to invest in sophisticated investments?
    Being registered as a sophisticated investor does mean you need to undertake any investments. You should evaluate every opportunity carefully, sophisticated or otherwise, before deciding if it is right for you.
  • How do I access sophisticated investments?
    Most sophisticated investors use a network of advisors and/or product providers. You can ask your Private Bank, wealth advisor, or accountant about opportunities. They won’t necessarily see all opportunities, as depending on the firm, it may need to be an “approved product”.

    Approved product lists are a form of risk management for the Australian Financial Services Licensee and are not legislated. If an investment opportunity is not on your advisor’s APL, it doesn’t necessarily mean it is a bad investment.

    If you wish to stay informed on the latest sophisticated investments and opportunities, you can subscribe free to our newsletter.
  • Why does my private bank need an Investor Certificate?
    Not all private banks operate in the same way. Some service family offices and therefore only provide general advice products – ie products for sophisticated or wholesale investors. These private banks require investor certificates.

    Other private banks have a dedicated financial planning unit, and will still provide personal advice to their clients.
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HOW TO CERTIFY INVESTORS

  • How do I link with my clients?
  • How do I add sophisticated investor clients onto Cygura?
    1. Register with Cygura.
    2. Log in and click on the “My SIs” icon.
    3. Click on the Add button, and input your clients name and contact details.
    4. We’ll do the rest – your client will receive an email from us advising them of your nomination.
    5. They need to click on the link to accept the nomination.
    6. This will take them to their Cygura page, which will ask for some further contact details.
    7. Now they are connected to you.
  • I’m an accountant. How do I certify?
    1. Login to cygura.
    2. Click on the “My SIs” icon. This is where you add clients, as well as accredit existing clients.
    3. Look for the client you wish to certify, and select “Accred” next to their name. This will bring up your Declaration screen.
    4. Declare your accountancy qualifications , what your membership designation is, and certify that your client qualifies under Chapters 6D and 7 of the Corporations Act (2001) either under the income or asset test. You are required to date this declaration, and this is the date of the certificate.
    Alternatively, you can view this explainer video https://www.youtube.com/watch?v=MK3wi_SFhxA 
  • Where do I find a sophisticated investor certificate template?
    Certificates created in Cygura meet ASIC guidelines for certifying sophisticated investors and meet all regulatory requirements.
  • What if my client is overseas and needs a certificate?
    No problem. You can login to Cygura, click on the “My SIs” icon, and add them as a client. As long as they have internet access to accept the nomination and add some further details, they can complete their registration.

    Their accountant will still have to certify them as a sophisticated investor, and will receive an email from Cygura with the Investor’s request.
  • Does Cygura integrate with my CRM?
    With Cygura Corporate Solutions you can access the convenience of Cygura for your clients organisation-wide. Cygura integrates with your current client relationship management (CRM) system, enabling you to upload your clients, view the status of your client’s certificates and even download a copy of certificates in seconds.
  • How does Cygura benefit my clients?
    As you are aware, no two clients are the same. Each have their own preferences and objectives, and most have multiple financial arrangements. Most sophisticated investors are time poor, tend to travel a lot, and like unique investment opportunities that can help bolster returns and diversify risks.

    Cygura offers them a central portal where they can share their investor certificates with all their trusted advisors (bankers included). Your client can be on a business trip interstate, and still participate in the latest investment opportunity.

    Their accountant will receive an email reminder to recertify clients prior to expiry, helping to ensure that certificates are always up to date.

    Cygura means less running around for everyone, allowing you to focus on increasing the value add in your client relationship.
  • Why does my client need a certificate?
    To be considered a sophisticated investor, and to access investment opportunities not available to retail investors, a Qualified Accountant’s Certificate (also called a Sophisticated and Wholesale Investor Certificate or Investor Certificate) signed by a suitably qualified accountant must be provided to the advisor or financial product provider. Certificates are valid for two years.
  • How long do certificates last?
    In Australia, certificates are valid for two years.
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SECURITY & COMPLIANCE

  • Does my certificate meet Australian regulations?
    Yes. Cygura electronic certification is a compliant way for accountants to certify sophisticated investors and wholesale clients for the purposes of Chapters 6D and 7 of the Corporations Act 2001.
  • How secure are my details?
    Cygura uses reasonable steps to secure your personal information. These may include username and password access, SSL encryption, session timeout, account lockouts. Further information can be viewed on our security page.
  • Can anyone see my sophisticated investor status?
    No, you are in complete control over who sees your sophisticated investor certificate.

    When an advisor or product issuer requests to view your certificate, you will receive an email from Cygura. If you do not wish to allow that person to view your certificate, you simply log into Cygura and click on “remove” beside their name.
  • Can other advisers, brokers or product providers see my clients’ details?
    No. Your client is in complete control over who they share their certificate with.
  • Will my compliance manager accept Cygura?
    Cygura is the industry best practice approach for managing sophisticated and wholesale investor compliance. Electronic certification with Cygura is a compliant way for accountants to certify sophisticated investors and wholesale clients under Chapters 6D and 7 of the Corporations Act 2001. It eliminates the need for manual record keeping, integrates with your CRM system and provides an auditable record of every client’s investor status at any point in time.
  • How does Cygura simplify compliance for advisors and product issuers?
    Cygura gives advisors and accountants the ability to view the status of their clients in one central location, simplifying the compliance when marketing new investment opportunities to sophisticated investors. Advisors can store and download a copy of their client’s certificate directly from Cygura.

    By law, certificates are valid for 2 years after being signed by an accountant. Cygura keeps track of expiration dates for you, and even sends a reminder to you and your client’s accountant about upcoming expiries. This gives you the advantage when offering valuable opportunities to your client.
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USING CYGURA

  • How do I register for Cygura?
    Registering for Cygura is simple.
    1. Go to https://portal.cygura.com.au/
    2. Enter your details
    3. You’ll receive an email from Cygura
    4. Click the link in the email to complete your registration
  • What does Cygura cost?
    Cygura has free standard access for investors, advisors and accountants.

    There may be some charges for professional reporting services and integrated corporate solutions. View our pricing.
  • How do I update my details?
    Once logged in, click on the Profile icon. Here you can update your name, password, and other identifying information. You can also update your newsletter preferences.
  • How do I change my accountant?
    How do I change my accountant?

    Once logged in, click on the Change Accountant icon. You can update the details of your accountant here, and Cygura will send the new accountant an email advising them of the change of details. We recommend as a courtesy that you contact both the old and new accountant and advise them directly of your changes.
  • How do I know when my certificate is about to expire?
    Cygura automatically notifies your accountant and advisor one month before your certificate expires, so they can confirm you’re still eligible and provide you with a new certificate.
  • How do I share my certificate with advisors?
    Simply let your advisor (or product provider) know that you are registered with Cygura and they can log in, connect with you, and view your certificate.

    You will receive an email from Cygura notifying you that an advisor wishes to access your certificate. If you do not wish to share your certificate with that advisor you can deny this request by logging in and clicking on “remove” beside their name.
  • I haven’t received a registration email, what should I do?
    We recommend you first check your junk folder. Having your spam filter on a high setting, may force our emails into your Junk Box.

    If that fails, try re-registering. You may have accidentally mistyped your email address.

    If you still have not received an email from Cygura, please contact our support team at support@cygura.com.au
  • How does my accountant certify me?
    When you register with Cygura you are requested to provide your accountant’s details including name and contact email address.

    Cygura then contacts them automatically with a request to certify you as a wholesale or sophisticated investor.

    Once your accountant certifies you, you can log in and share your certificate with investment advisors or product issuer.
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PREMIUM FEATURES

SMSF FAQ

  • Can my SMSF become a sophisticated investor?
    According to ASIC’s updated “Statement on wholesale and retail investors and SMSFs” if the financial services does not relate to superannuation product, then the Trustee can be treated under the general test under the Corporations Act. This means if an SMSF Trustee has net assets of $2.5 million, earns a gross income over $250,000 p.a over the last two years, or if the value of the investment is at least $500,000 then the Trustee can be considered a “wholesale” client.
  • What entity gets certified for an SMSF?
    There are many interpretations. The Institute of Chartered Accountants Australia and New Zealand recently published “Self-Managed Superannuation Funds as wholesale clients – Issues for accountants” (October 2015) which outlines their interpretation.

    Their paper notes that “the trust fund itself is not a legal entity and the status of the fund’s trustee(s) as a wholesale client needs to be looked at”. They add that “while many SMSFs will have the necessary level of assets or income within the fund, the control test also offers scope to include assets or income held outside of the SMSF”. If you need further clarification, it is recommended that you contact your industry body for clarification.
  • How do I register my SMSF for Cygura?
    Registering for Cygura is simple.
    1. Go to https://portal.cygura.com.au/
    2. Enter your details
    3. You’ll receive an email from Cygura
    4. Click the link in the email to complete your registration
    5. Remember to tick "Add entity", and select entity type, add full SMSF name, and relevant ABN.
  • What does Cygura cost?
    There’s no charge for creating, storing and sharing your certificate in Cygura.

    There may be some charges for professional reporting services and integrated corporate solutions. View our pricing.
  • How does my accountant certify my SMSF?
    When you register your SMSF with Cygura you are requested to provide your accountant’s details including name and contact email address.

    Cygura then sends an email automatically to your accountant with a request to certify your SMSF as a wholesale or sophisticated investor.

    Once your accountant certifies your fund, you can log in and share your certificate with investment advisors or product issuers.
  • What are the risks of investing as a sophisticated or wholesale investor via my SMSF?
    As a sophisticated or wholesale investor, you’re considered more likely to be able to evaluate the merits and risks of an investment.

    This means you will not receive product disclosure statements or prospectuses from product issuers, and your advisors are not required to give you a Statement of Advice or have dispute resolution processes in place.
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