Definition
What is Eligible Investor?
A category of investor who has been certified by a financial advisor as understanding investment risks.
An eligible investor is a category under the FMCA 2013 where a qualified financial advisor certifies that an investor understands the risks of wholesale investment products. This provides an alternative path to wholesale investor status for those who don't meet the asset, income, or investment amount tests.
Requirements: - Must receive advice from a licensed financial advisor, lawyer, or accountant - The advisor must certify the investor understands the risks of the specific investment - Certification is typically valid for 2 years - Each investment may require separate certification
Important Note: A September 2025 High Court ruling clarified that advisors must genuinely assess investor understanding, not simply provide rubber-stamp certifications. Advisors who fail to properly assess investors may face liability.
Related Terms
Wholesale Investor
An investor who meets specific criteria allowing access to investment products not available to the general public.
Sophisticated Investor
A non-statutory term sometimes used to describe investors who can demonstrate investment experience comparable to the FMCA Schedule 1 eligible-investor pathway.
Financial Markets Conduct Act 2013 (FMCA)
The primary NZ statute governing the offer of financial products, fair dealing in financial markets, and licensing of financial-service providers.
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Educational Content Disclaimer
This glossary provides general educational information only and does not constitute financial, legal, or tax advice. Definitions and explanations are simplified for educational purposes and may not cover all aspects or nuances of each term.
Before making any investment decision, you should seek independent advice from appropriately qualified professionals. Wholesale Investor does not recommend or endorse any particular investment, strategy, or fund manager.