Who Wants to Be an Accredited Investor
Can You Be an Accredited Investor? Here’s What It Really Takes
It’s no secret that financial giants like hedge funds play by a different set of rules — and have access to investment opportunities far beyond the reach of the average retail investor. But what’s less commonly known is that individuals can access many of these opportunities, too — if they meet the requirements to be an “accredited investor.”
To be frank, this usually means you need to earn a lot of money. But as political and economic landscapes evolve, the definition of who qualifies is starting to shift.
Last month, the House Financial Services Committee proposed new legislation that would expand the definition of who qualifies.
New Developments: Expanding Access to Accredited Status
The Equal Opportunity for All Investors Act of 2021 proposes that the Securities and Exchange Commission (SEC) create an exam that allows individuals with sufficient investment knowledge to qualify as accredited investors — even if they don’t meet the traditional income or net worth thresholds.
This idea builds on a 2020 SEC amendment, which allowed people with certain financial certifications (like FINRA licenses) to qualify. The proposed exam would aim to ensure that anyone who passes understands the risks involved with unregistered investment opportunities.
At the same time, there are rumors the SEC may raise the income thresholds for accredited investors — meaning the bar could soon be even higher.
So while the rules may be changing, here’s what the qualifications look like right now.
What Is an Accredited Investor?
To qualify as an accredited investor in the U.S., you must meet at least one of the following:
Net worth of $1 million or more, not including your primary residence.
Annual income of $200,000 for the past two years (or $300,000 combined with a spouse), and a reasonable expectation of earning the same or more this year.
You can also qualify if you fall into one of these categories:
A corporation, partnership, or charity with over $5 million in assets.
A bank, insurance company, investment company, or business development company.
An employee benefit plan with more than $5 million in assets or professionally managed investments.
A director, executive officer, or general partner of the company offering securities.
A business where all equity owners are accredited investors.
A trust with assets exceeding $5 million, not formed just to purchase the securities.
Individuals holding certain FINRA licenses, such as Series 7, 65, or 82.
You can find the official definition of an “accredited investor” in Rule 501 of Regulation D under the Securities Act of 1933.
It’s important to note that the SEC doesn’t issue a certificate confirming your accredited status. Instead, it’s the responsibility of the company offering the investment to verify your credentials.
The Perks — and Pitfalls — of Accredited Investor Status
The major advantage of being an accredited investor is access.
You can invest in high-caliber opportunities not registered with the SEC — including:
Private equity
Hedge funds
Venture capital
Private placements
Equity crowdfunding
These vehicles are typically out of reach for non-accredited investors and can offer significant upside and diversification.
But they’re also risky:
Higher minimum investment amounts
Limited liquidity
Lack of public reporting
Higher fees
Potential capital gains tax liabilities, especially for high earners
As with anything in finance: more reward usually means more risk.
How to Navigate the Space Wisely
The SEC assumes that accredited investors are sophisticated enough to understand these risks — but not everyone who qualifies has real-world investment experience.
If you're newly accredited, here’s how to protect yourself:
Start small — don’t go all-in on your first private fund.
Understand the details of every investment opportunity.
Know the liquidity constraints, management structure, and exit strategy.
And if you're unsure, get expert guidance.
NEST Financial Can Help
At NEST Financial, our team brings deep experience navigating institutional-grade investment opportunities. If you're newly accredited — or thinking about getting there — we can help you reduce risk, improve performance, and build a strategy that fits your goals.
📩 Reach out at info@nestfinancial.net to schedule your consultation.
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DISCLAIMER: This content is for educational purposes only and does not constitute financial planning or investment advice. Contact us directly to receive tailored recommendations for your specific situation.