From www.smsfadviser.com: The classification as a sophisticated investor reduces compliance burdens for advisers and excludes these investors from certain consumer protections.

A recent inquiry by the Parliamentary Joint Committee recommended the government periodically review the sophisticated investor test and consider amending the Corporations Act to incorporate objective criteria for assessing investor knowledge and experience.

An AFCA determination has clarified that while individual members may meet sophisticated investor thresholds, their SMSF must also satisfy higher asset tests to qualify for that status.