How to become an accredited investor

You can become an accredited investor in one of two ways: by meeting the SEC’s financial thresholds ($200,000 in annual income, $300,000 with a spouse, or a $1 million net worth excluding your home. or, if you don’t meet those thresholds, by holding certain professional licenses such as the Series 7, Series 65, or Series 82 in good standing. If you’re seeking access to high-risk, high-reward investment opportunities in private equity, startups, or hedge funds, learning how to become an accredited investor unlocks markets that aren’t available to the general public.

Let’s explore how to become an accredited investor, outline the key steps involved, and discuss alternative paths for qualifying even if you don’t meet the standard financial thresholds of $200,000 in annual income or a $1 million net worth. For more details on the definition and criteria, refer to the SEC's official accredited investor guidelines. And be sure to read our article on the 2020 accredited investor rule change for information on how recent regulatory updates have changed the investment landscape.

What is an “accredited investor”?

Accredited investors are individuals or entities that meet specific financial criteria, granting them exclusive access to private securities and investment opportunities not registered with the Securities and Exchange Commission (SEC). Understanding how to become an accredited investor is necessary for those seeking to invest in high-potential, non-public assets. These investment vehicles are not available to the general public and include:

• Venture capital funds
• Hedge funds
• Private equity deals
• Private placements
• Angel investments

Because these types of investments are not registered with the SEC, they do not offer the same investor protections, such as mandated quarterly reporting and disclosure obligations. To participate, individuals must either possess sufficient knowledge to assess risks independently or have enough capital to withstand potential losses. This is a core reason why the SEC established the accredited investor qualification under rules tied to the Securities Act of 1933, which set strict financial benchmarks that most individuals do not meet.

The purpose of the accredited investor requirements is to protect less experienced or less wealthy investors from the inherent risks of unregulated investments. However, these requirements can also act as a barrier for knowledgeable individuals who don’t meet the income or net worth thresholds but wish to access these opportunities. When learning how to become an accredited investor, it’s important to note that accreditation status is a key factor that firms evaluate during their screening process to verify eligibility for private investments.

Along with individual investors, several types of entities can also achieve accredited investor status, including:

• Registered Investment Adviser (RIA) firms
• Banks
• Brokerage firms
• Trusts
• SEC- and state-registered investment advisers
• Governmental bodies, entities, and funds organized under foreign laws

If you want to learn how to become an accredited investor, you must satisfy one or more of the SEC’s accredited investor requirements detailed below.

Accredited investor requirements

To qualify for accredited investor status, you must satisfy one of the following requirements.

Financial criteria

• Net worth that exceeds $1 million, excluding the value of your primary residence (individually, or with a spouse or partner)
• Income over $200,000 per year individually, or $300,000 per year with a spouse or partner, in each of the prior two years, and a reasonable expectation of the same for the current year

Do you meet the financial criteria? Congratulations: you qualify as an accredited investor.

There is a common misconception that there is a “process” to become an accredited investor that a government body or independent agency handles, but that is not the case. Instead, an investor’s credentials are reviewed by the individual companies offering the securities, and if you meet the requirements, you qualify for that transaction.

If you don’t qualify via the financial criteria, there are several professional criteria options you can pursue.

Can you become an accredited investor without meeting income requirements?

Yes. The 2020 amendment to the accredited investor definition expanded the ways individuals can qualify beyond traditional financial requirements. Notably, holding certain professional licenses, including the Series 65 license, now grants accredited investor status. These exams are administered by the Financial Industry Regulatory Authority (FINRA), which administers the Series 65 on behalf of the North American Securities Administrators Association (NASAA), and licenses are granted through state or SEC registration. Here are some of the recognized paths:

• Hold a FINRA Series 7, Series 65 (often referred to as the Series 65 license), or Series 82 license in good standing
• Act as a director, executive officer, or general partner of the company offering the securities
• Qualify as a “family client” of a “family office” that is itself an accredited investor
• Be categorized as a “knowledgeable employee” of a private investment fund
• Participate as a member in an investment entity that owns “investments” valued above $5 million and was not solely created for investing in the current offering

If you do not meet the typical net worth or income thresholds, satisfying licensing qualifications can be the most straightforward path to accredited investor recognition without substantial assets. The Series 65 is especially accessible because you can take the exam without sponsorship from a FINRA-member firm (unlike the Series 7 exam). Below, we explain how you can achieve accredited investor eligibility by obtaining your Series 65 license.

How to become an accredited investor through a Series 65 license

Pass the Series 65

The Series 65 license is a key certification for professionals pursuing a career as an investment adviser representative. The Series 65 exam, administered by FINRA on behalf of NASAA, evaluates your knowledge of investment principles, regulations, and ethics. The exam fee is $187. Candidates must complete 140 questions, 130 of which are scored and 10 that are experimental, within a three-hour time limit. To pass, you need at least a 72% score (94 out of 130 scored questions correct). For a detailed breakdown of the exam structure and requirements, visit our complete Series 65 exam guide.

A quick recommendation: Achievable’s Series 65 course stands out as a top choice for preparing for the Series 65 exam, especially for individuals without a formal background in finance. Our course material is designed to make complex investment concepts accessible, using real-world examples and straightforward explanations. Preview the Series 65 course for free to see if it fits your study needs.

It’s important to note that simply passing the Series 65 exam does not automatically grant you accredited investor status. To fully obtain your Series 65 license and become an investment adviser representative (IAR) in good standing, you must also meet additional licensing requirements. This includes becoming licensed as an IAR with either your state’s securities regulator or the SEC at the federal level, and fulfilling all regulatory obligations such as registration and applicable fees. This licensing process involves two main steps:

1. Join an existing registered investment adviser (RIA) firm or register your own RIA firm.
2. Register yourself as an IAR affiliated with that RIA.

These steps ensure you are fully compliant and officially recognized as a licensed IAR after passing the Series 65 exam.

Join, or create your own, registered investment adviser (RIA) firm

To become an IAR and secure accredited investor status, you must complete the Uniform Application for Securities Industry Registration, commonly called Form U4, through the FINRA Gateway. Only RIA firms are authorized to file Form U4s for individuals, which means you need to be affiliated with an existing RIA firm or start your own.

If you’re already associated with an RIA, its compliance or registration department will typically assist you after you’ve completed Form U4. This streamlined process means you’re nearly finished once the form is submitted.

Conversely, if your goal is to become an IAR and gain accredited investor status without joining an existing RIA, you’ll need to learn how to start your own RIA. Establishing your own firm is essential for those seeking direct registration as an IAR without firm affiliation.

How to start your own Registered Investment Adviser (RIA) firm

1. Incorporate your business

First, you must establish and incorporate your new RIA business. Industry experts commonly recommend forming your firm as either an S-Corporation (S-Corp) or a Limited Liability Company (LLC). This helps protect your personal assets from liabilities associated with your firm’s operations. While liability concerns may be less significant if your main goal is simply to qualify as an accredited investor, forming an LLC still offers meaningful tax advantages over operating as a sole proprietorship. Remember, regardless of which corporate structure you select, you will not be insulated from enforcement actions if you violate the law.

2. Register with the SEC or your state

After passing your Series 65 exam, the next step is choosing how you’ll register your RIA. You can register at the federal level with the SEC or at the state level with your local state regulatory authority.

It’s important to understand that starting an RIA is a complex process in a highly regulated field. Many aspiring RIA owners work with experienced consultants during this phase, though even with expert assistance, the initial registration process typically takes two to three months. Be prepared for these typical costs when you register:

• Forming a company: ~$250
• Initial RIA firm regulatory fees plus annual state filing: ~$250 (varies by state)
• Individual Adviser Representative (IAR) fees: ~$100 per employee, including yourself

If your goal is to form an RIA firm solely for accreditation, your needs will be relatively minimal. However, if you plan to operate as an investment adviser serving clients, you must equip your firm with the necessary infrastructure, including domain names, computers, client billing software, marketing tools, customer relationship management (CRM) solutions, compliance reporting, and more.

Once your foundation is established, you’re ready to officially register your RIA with regulatory authorities.

2.1. Registering federally with the SEC

Registration with the SEC is typically available only to firms that manage at least $100 million in assets under management (AUM), or those who qualify via the SEC’s “internet investment advisers” exemption (Rule 203A-2(f)). To initiate this process, you will need to file Form ADV.

The “internet investment adviser” exemption applies only to RIA firms that provide all investment advice solely through an “interactive website,” where software-based platforms deliver advisory recommendations directly to clients based on personal inputs.

Please note: simply relying on video conferencing or communicating via website platforms does not meet this criterion. The SEC specifies that firms may not use websites merely as marketing tools or for basic communication.

For those forming an RIA as a pathway to accredited investor status with no plans to advise others, this SEC registration path may be a viable option. In this scenario, you would develop a website to satisfy requirements and file the SEC application. Several individuals have successfully become accredited by registering their own RIA firms using this approach; see these helpful experiences from Natecation and Tyler McMurray. Registering federally means you only pay the SEC fee and can avoid future re-registration if you move between states.

2.2. Registering with your state

For most individuals, state-level registration is often the most suitable choice, mainly because of the $100M SEC AUM minimum. State-level registration lets you launch and operate your RIA without federal AUM requirements or the internet-only exemption. Review your state’s process and regulations, which may have unique compliance obligations.

Here are examples of resources profiling RIA filing requirements in large states:

• California: RIA registration requirements
• New York: RIA FAQs
• Florida: Investment adviser registration steps
• Texas: Filing as an RIA
• For other states, comply.com offers a complete clearinghouse of RIA requirements.

Regardless of whether you register federally or at the state level, you must file Form ADV as part of establishing your RIA.

2.3. SEC registration: Filling out Form ADV

One of the pivotal steps is submitting Form ADV, which serves as your application with the SEC or for certain state registrations. You’ll submit this form electronically on the Investment Adviser Registration Depository (IARD) platform.

Form ADV includes five key sections:

1. Part 1A: Collects details about your firm’s structure, including ownership details, operations, control persons, executive officers, and any individuals providing advice. It also requires disclosures regarding firm personnel and any disciplinary history. If your RIA operates as a solo entity, this section is typically straightforward. Use publicly available examples from Wealthfront and Compound for reference.
2. Part 1B: Additional questions and disclosures mandated by specific state securities authorities, required if you’re applying at the state level only (SEC registrants on IARD skip this by default).
3. Part 2A: Requires “narrative brochures” about your firm’s practices; refer closely to these SEC instructions.
4. Part 2B: Involves “brochure supplements” detailing the professional backgrounds of individuals providing advisory services; essential for all principals of your RIA.
5. Part 3: Calls for a “relationship summary” that provides straightforward information for retail investor clients. See the official completion guide.

Upon submission, the SEC generally responds within 45 days (often sooner). If revisions or clarifications are needed on your filed Form ADV, you’ll be allowed to update materials accordingly.

If you’re launching an RIA simply to satisfy accredited investor requirements and not to handle client assets or provide ongoing advice, incorporate these best practices into your ADV submission:

• State explicitly in Form ADV that you won’t take custody or control of client funds; advice is informational only, and your RIA will not perform discretionary trades.
• Show assets under management (AUM) as $0 to reduce ongoing compliance or reporting obligations.
• Create a generic code of ethics based on SEC directions.

By getting through the Form ADV filing, you will have overcome one of the most significant milestones of the RIA formation journey. Congrats, you’re almost ready to open for business.

If you plan to handle others’ funds, set up a custodian

If you plan to handle client funds and make investments on their behalf, your RIA will need a custodian, which is another firm that holds your clients’ actual assets and performs transactions on your and your clients’ behalf. This is typically a large firm, such as BNY Mellon or Charles Schwab. Charles Schwab has a helpful page on choosing a custodian, and you should do your own research to find the best fit.

If you do not plan to handle client funds and will only use this RIA as a vehicle for accreditation, you do not need a custodian. You just need to ensure that you never handle someone else’s money.

Register yourself as an investment adviser representative (IAR) of the firm

Once you become part of a registered firm, whether it’s your own RIA or another, you can begin registering as an IAR by submitting Form U4 through the FINRA Gateway and paying all required registration fees. Depending on whether your RIA is SEC-registered or state-registered, you will pay fees to either the SEC or your state authority.

Form U4 for IARs requires the following information:

• General information: Including your date of birth, your firm’s CRD number and billing code, employment address, and other basic details.
• Fingerprint information: Providing a fingerprint as part of the background check. Some states allow an exception for IAR-only registration, meaning that if you only plan to act as an IAR (not a broker-dealer), you may be able to bypass this step in certain jurisdictions.
• Registration with unaffiliated firms: Ensures you’re not registering as an IAR under multiple unrelated firms. If dual registration applies, you must disclose it; note that some states prohibit dual registration.
• SRO registration: Applicants seeking IAR-only status may skip this section.
• Jurisdiction registration: Specify your registration type, broker-dealer agent or IAR, and the jurisdictions where you intend to register.
• Registration requests with affiliated firms: Asks if there are any affiliated firms (such as related corporate entities) with which you also wish to register as an IAR. This is common at large organizations with multiple related entities.
• Examination requests: Relevant if you need to schedule or reschedule a FINRA or North American Securities Administrators Association (NASAA) exam.
• Professional designations: Where you list any credentials like Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) that you hold.
• Identifying information: Requesting further personal identification details.
• Other names: Any alternate names you have used.
• Residential history: Your residential addresses for the past five years.

Once you have completed and submitted Form U4 through your RIA, you are officially recognized as a registered investment adviser representative (IAR) in good standing, which, together with your Series 65 in good standing, grants you accredited investor status.

Maintain your RIA firm’s compliance

Keep your firm compliant year-to-year by filing an annual update amendment with the SEC or your state (and paying the associated filing fees) and keeping your individual IAR registration up to date. As long as there are no changes to your firm’s structure, this can be a very simple update that basically says “no changes.”

Accredited investor verification

While there is no physical certification or license to be an accredited investor, securities issuers conduct due diligence to verify who may invest in their business. The criteria depend on the type of security. Generally, the SEC requires firms to conduct a verification process involving the following steps:

1. The potential investor fills out a questionnaire.
2. The potential investor is asked to attach supporting documents (financial statements, proof of asset ownership, proof of net worth, a written recommendation from a financial adviser, etc.).
3. The firm conducts additional credit report checks to identify any outstanding debt.

For income-based investors, firms will likely require proof of income, such as tax returns, W-2 forms, and the like.

Prospective investors can skip the above steps by having their CPA, a third-party licensed attorney, an SEC-registered investment adviser, or a registered broker-dealer certify in a letter dated within the last 90 days that they are accredited.

Some platforms, such as AngelList Syndicates, ask for proof of accreditation upfront to handle the verification burden.

Pros and cons of being an accredited investor

Being an accredited investor has its own set of advantages and disadvantages. Here’s a table to give you a clearer idea:

The obvious pro is privileged access to opportunities that public investors don’t have: unregistered funds, angel investments, and syndicates, all of which are high-growth opportunities. However, accredited investors also have to vie for shares with other wealthy investors or investment firms, which pushes minimum investment amounts significantly higher. That can lead to greater losses if an investment fails: the higher the reward, the higher the risk.

2026: Proposed updates to accredited investor pathways

In late September 2026, the Securities and Exchange Commission (SEC) issued notices seeking public comment on six new ways for investors to qualify as accredited investors. If adopted, these changes would let the SEC designate certain professional certifications or new credentials as eligible pathways to accredited investor status for investors in good standing.

The proposals would allow U.S. Certified Public Accountants (CPAs), Chartered Financial Analyst® (CFA®) charterholders, CERTIFIED FINANCIAL PLANNER® (CFP®) certificants, FINRA Investment Banking Representative (Series 79) holders, and FINRA Research Analyst (Series 86 and 87) holders to qualify as accredited investors. Additionally, the SEC has proposed a new exam, to be administered by FINRA, that would confer accredited investor status. The exam would mirror the Securities Industry Essentials (SIE) exam, an assessment used by entry-level securities professionals to gain employment opportunities and secure additional licenses.

Importantly, these proposals are open to public comment. The SEC voted unanimously to seek comment on them, but they are not yet in effect. Investors should follow official agency news for updates and the timeline for any final approval.

Ready to pursue high-growth investments? Get accredited!

Being an accredited investor provides unique access to high-risk, high-reward investment opportunities that are typically unavailable to most individuals. If you do not currently meet the net worth or income thresholds, pursuing the Series 65 can be an excellent alternative, a viable path to becoming a qualified investor through licensing rather than financial criteria. Explore Achievable’s Series 65 course for free to determine if preparing for the Series 65 exam is the right first step for you.