Do you need help figuring out how to become an accredited investor? But wait, why do you even want to be an accredited investor? In just a few minutes, we are going to walk you through everything you need to know.
The main benefit of becoming an accredited investor is it allows you to participate in alternative investments with higher rates of return. As an accredited investor, you will have access to investments not registered with the Securities and Exchange Commission (SEC).
To qualify as an accredited investor, you must have one of the following:
1. Annual income of $200,000 or more (or $300,000 if you’re married), or
2. Net worth of $1 million or more alone or together with a spouse (excluding your primary residence), or
3. If you have a Series 7, Series 65, or Series 82 license from FINRA (Financial Industry Regulatory Authority).
By meeting any of the requirements above, you may receive an accredited investor designation.
In general, the requirement for an individual to receive their accredited Investor designation is in place because these alternative investments are not regulated by the SEC.
However, it’s important to note that some alternative investments do not require you to meet the 3 conditions above. Please Schedule a Call with us and we will explain this more in depth.
How to Verify Your Accredited Investor Status
There are multiple way to verify your accredited investor status.The process of verifying your accredited investor status is usually done by:
- Third party verification (such as a verification service or accountant) OR
- Self verification, like a questionnaire
Usually the type of investment will determine how the verification should be completed.
If the investment is registered as a Reg D 506(c), then a third party verification will be required.
If the investment is registered as a Reg D 506(b), then a self verification, like a questionnaire is usually required.
If you have any questions about qualifying as an accredited investor or investing with us, please schedule a call with us.