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Financial advisory
RES5Financial Advisory Services✓Mr Aravind opens an account with a CMS licence holder. His income in the preceding 12 months was S$340,000. His financial assets net of liabilities are S$450,000, and his net personal assets, counting his primary residence at the capped value, come to S$1.6 million. He tells the representative that he wants to keep every protection available to a retail client. How should the firm classify him?
SFA section 4A. The individual limbs are alternatives: net personal assets exceeding S$2 million, with the primary residence taken net of any outstanding secured credit facility and capped at S$1 million; financial assets net of liabilities exceeding S$1 million; or income of not less than S$300,000 in the preceding 12 months. A person who meets a threshold may be treated as an accredited investor only if he opts in, and may withdraw that consent at any time.
Meeting a threshold makes a client eligible for the status, not automatically subject to it.
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