The U.S. Capitol Building is seen on the morning of July 15, 2025, at Capitol Hill, Washington, DC.
New legislation, which received bipartisan support in the U.S. House on Monday, aims to broaden access to investments typically available only to the affluent—provided individuals pass certain regulatory tests.
The bill seeks to redefine “certified investors” under federal securities laws. This classification permits a broader array of investments, including pre-IPO firms, private credit, equity, venture capital, and hedge funds.
The proposed law directs the Securities and Exchange Commission (SEC) to implement an exam that anyone can take to become a certified investor, irrespective of personal wealth or income. Currently, the standards for accredited investors require individuals to have an annual income of $200,000 or more, or $300,000 for couples, along with a net worth of at least $1 million, not counting their primary residence. These income thresholds have remained unchanged for years, leading to an increase in accredited households as wealth has grown.
“I believe that wealth shouldn’t be the sole criterion for determining whether someone can be a certified investor,” stated the bill’s sponsor. “It’s more important that individuals possess the knowledge to properly assess the risks and rewards of private investments.”
The legislation still awaits Senate approval and presidential consent before it can go into effect.
The SEC’s Test Evaluates “Sophistication”
The regulations governing certified investors focus heavily on consumer protection. The SEC states, “We aim to ensure that all participating investors are financially literate and able to manage their risks.” Private securities tend to be less liquid, riskier, and more volatile than publicly traded assets.
The proposed SEC tests aim to gauge whether applicants understand various securities types, financial statements, and the risks that come with personal investments, including issues of limited liquidity and long-term valuation.
“This bill seeks to find a middle ground between thorough testing and creating standards that are not so tough that even savvy investors might fail,” said the bill’s supporter.
Companies See New Opportunities
The initiative also aims to increase funding opportunities for startups.
“Leaders in small businesses mention that the problem isn’t a lack of innovative ideas but rather a deficit in capital,” remarked a co-sponsor of the bill. “This legislation opens up new funding avenues from a diverse pool of investors, enabling entrepreneurs to turn their ideas into jobs and economic growth.”
Another advocate for these changes believes this step is crucial for diversifying investment opportunities. “It’s an important move to open up what has typically been a closed system,” said the CEO of a self-directed IRA platform. “We need to give everyone a chance to invest like the well-off or major institutions.”
Some Investors Should Exercise Caution
However, many financial advisors express concern. They often reserve discussions about private investments for affluent clients who have already addressed their financial basics.
