Wholesale vs eligible investor in NZ: the categories in plain English

Wholesale vs eligible investor in NZ is a question of scope. “Wholesale investor” is the umbrella term in Schedule 1 of the Financial Markets Conduct Act 2013. “Eligible investor” is one category inside it, entered by certifying your investment experience, confirmed by a financial adviser, qualified statutory accountant or lawyer. Everyone else is a retail investor.

The distinction matters because many investments, including co-funding secured loans with HomeSec Business Finance, are offered only to wholesale investors. HomeSec, a private business lender lending since 2004, with its New Zealand office in Auckland, invites wholesale investors to co-fund some of its short term loans. This guide explains the categories without the legalese.

What is the difference between wholesale, eligible and retail investors?

The FMC Act uses three terms that are easy to blur.

• Wholesale investor is anyone who fits one of the Schedule 1 categories. An offer made only to wholesale investors does not need the full retail disclosure regime.
• Eligible investor is one of those categories. It is the only one based on your experience rather than your assets, your turnover, your job or the size of your investment.
• Retail investor is everyone else. Offers to retail investors generally need full disclosure, including a product disclosure statement and an entry on the offer register.

So every eligible investor is a wholesale investor, but not every wholesale investor is an eligible investor. A family company with net assets well over $5 million in each of its last two financial years is wholesale under the large test without ever certifying its experience. In everyday conversation people use the terms loosely; the law does not.

What are the wholesale investor categories?

The table sets them out side by side, drawing on Heartland Investments’ summary of Schedule 1 and the FMA’s offer FAQs.

You only need to fit one. Two details trip people up. The $1 million portfolio test counts “specified financial products”, which leave out retirement scheme interests such as KiwiSaver, some basic bank products and products issued by your own associated entities. And the large test counts the net assets or turnover of the person and the entities they control together.

Where does the $750,000 figure fit?

It is a route into wholesale status for a particular offer. A person is wholesale if the minimum amount payable on accepting the offer is at least $750,000, or if that amount plus what they have already paid for products of the same class from the same issuer, still held, reaches $750,000. The offeror must give a prescribed warning and get the investor’s written acknowledgement.

That $750,000 figure is a legal eligibility test, not the amount you put into each loan; co-funders choose how much to contribute to each loan, from NZ$100,000. Most co-funders qualify as eligible investors or under the investment activity or large tests.

The FMA takes the route seriously. In October 2025 it issued a public warning finding that 35 investors had been wrongly accepted under the $750,000 exclusion by Finbase (HP Capital).

What is a safe harbour certificate?

A safe harbour certificate is a separate written document in which an investor states which wholesale category applies to them. It gives the offeror a documented basis for treating the investor as wholesale. The FMA’s FAQs say it must stand apart from the rest of the offer paperwork, so the investor considers it on its own.

The key rules, as summarised in the High Court’s 2025 decision:

• It stops being effective if the offeror knows the person is not in fact a wholesale investor.
• It lasts two years from the date it is given.
• It can be revoked by written notice, after which it cannot be relied on for later offers.
• Giving a false one is an offence. Knowingly giving a certificate that is false or misleading in a material particular carries a fine of up to $50,000. The same offence covers eligible investor certificates.

For the large category, the FMA says a safe harbour certificate is not required; an offeror can take other reasonable steps to check net assets or turnover instead.

Why is the eligible investor route different?

Because it is the only category built on judgement rather than numbers. You certify that your previous experience acquiring or disposing of financial products lets you assess the merits of the offer, your own information needs and the adequacy of the information provided. You state your grounds. Then a financial adviser, qualified statutory accountant or lawyer confirms the certificate in writing.

That extra step exists because experience cannot be read off a balance sheet. It has also been where problems arose. In October 2022 the FMA formally warned seven wholesale property investment firms, including Du Val entities, about certificates with invalid grounds. The grounds it rejected included owning KiwiSaver, holding term deposits, having a rental property portfolio and making profits from selling houses. Du Val later went into statutory management; our summary of what happened at Du Val sets out the lessons.

In September 2025 the High Court, on a case stated by the FMA, clarified the rules. The FMA’s summary explains that a certificate need not detail the investor’s experience, but its grounds must not be, on their face, incapable of supporting the certification. Our guide to the eligible investor certificate covers the detail.

What do people most often get wrong?

A few misunderstandings come up again and again.

“I’m wealthy, so I’m an eligible investor.” Not necessarily. The eligible investor route is about experience. Wealth may put you in the large category, or your portfolio in the investment activity category, but neither is automatic.

“My KiwiSaver and term deposits count.” Not as grounds for an eligible investor certificate, according to the FMA, and KiwiSaver sits outside the specified financial products counted towards the $1 million portfolio test.

“My certificate lasts forever.” It does not. An offeror cannot rely on an eligible investor certificate given more than two years earlier, and the same two-year limit applies to safe harbour certificates.

“Being wholesale means I don’t need to read the documents.” The opposite is true. Wholesale offers usually come without a product disclosure statement, so what you read and the questions you ask carry more weight. The FMC Act’s fair dealing rules still apply, as Russell McVeagh notes, but the diligence is yours. Our glossary explains the terms you will meet in a loan pack.

How do the categories apply to companies and trusts?

Many New Zealanders hold their wealth in a company or family trust, and every category can apply to an entity. A company or trust can be large in its own right, can meet the investment activity test through its own portfolio, or can give its own eligible investor certificate: the Act speaks of an investor certifying “himself, herself, or itself”.

Your lawyer or adviser will confirm the right route and wording for your structure. Our guide for family trusts and companies covers the Trusts Act 2019 and how co-funding works in a trust’s name.

How do you qualify to co-fund with HomeSec?

Co-funding is open to wholesale investors, who choose each loan from its due diligence pack and decide how much to put into it, from NZ$100,000. Most qualify as eligible investors; others under the investment activity or large tests. Our page for wholesale investors explains the process from start to finish.

If you’d like to check which category fits you and see what a loan pack looks like, register your interest and our Funding Manager will be in touch.