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December 18, 2023 | read

Understanding the 2023 Updates to Accredited Investor Requirements: What You Need to Know

Thomas Castelli

Accredited investors play a crucial role in private placement opportunities, such as real estate syndicates and funds. Historically, the requirements to become an accredited investor were based on income and net worth thresholds. However, recent developments have sparked discussions about reforming these criteria to focus more on knowledge and expertise in private investing. This blog post explores the changes in accredited investor requirements, potential implications, and the ongoing debate surrounding these regulations.

Previous Accredited Investor Criteria

Traditionally, the criteria for becoming an accredited investor were primarily based on income and net worth thresholds. 

Individuals needed to have an income of $200,000 or more for the last two years, with the expectation of earning the same amount in the third year. A married couple can meet the accredited investor requirements if they have combined income of $300,000. Alternatively, investors with a net worth of $1 million, excluding their primary residence will qualify as an accredited investor. These thresholds have remained unchanged since their introduction in the 1980s.

Expanding Accredited Investor Criteria

In 2020, the SEC introduced a rule allowing individuals holding certain securities licenses, such as the Series 7, 65, and 82, to become accredited investors. This change acknowledged that expertise in the field of private investing can be a relevant qualification, irrespective of income or net worth. The rule aimed to provide equal opportunities for investors with securities licenses to participate in private placements.

The Equal Opportunity for All Investors Act

More recently, the Equal Opportunity for All Investors Act was passed, instructing the SEC to establish an exam program that would allow investors to become accredited by demonstrating their knowledge and expertise in private investing. This proposed change would introduce a study program and exams, enabling investors to prove their understanding of the risks associated with private placements. If implemented, this reform could shift the focus from solely wealth-based criteria to a more merit-based approach.

Implications and Perspectives

The proposed changes to accredited investor requirements have sparked discussions and varying opinions. Some argue that financial stability and higher thresholds ensure that investors can absorb potential losses and mitigate risks. They contend that the existing criteria provide a safeguard against less sophisticated individuals investing in high-risk ventures. 

On the other hand, proponents of reform believe that knowledge and expertise should be the primary factors determining eligibility. They argue that financial stability alone does not guarantee an investor’s ability to navigate the complexities of private placements successfully.


The requirements for becoming an accredited investor have long been based on income and net worth thresholds. However, recent developments have signaled a potential shift towards knowledge-based qualifications. 

The proposed reforms aim to create a more inclusive system that allows individuals with expertise in private investing to participate in opportunities previously restricted by financial criteria alone.

As discussions continue and potential changes are considered, the ultimate goal remains ensuring investor protection and fostering a well-informed and resilient investment landscape.

Stay informed about the changing landscape of accredited investor requirements. Contact us today for valuable insights on the potential implications of reforming criteria and the role of knowledge and expertise in private investing.

For part one of this blog post on short-term rental restrictions, click here.