What is an accredited investor?
Answer: An accredited investor meets SEC criteria allowing access to certain private investments. Individuals generally qualify through net worth exceeding $1 million, excluding their primary residence; annual income exceeding $200,000 individually or $300,000 with a spouse or equivalent for two prior years, with similar income expected currently; or certain professional licenses. Other qualifying categories exist.
By Edward Papier, CIMA, CF2, CM&AA ยท Last updated November 5, 2026
What is the difference between an accredited investor and a qualified purchaser?
Individuals generally qualify as accredited investors with net worth exceeding $1 million, excluding their primary residence, or through income or professional credentials. A qualified purchaser generally must own at least $5 million in investments. Accredited status provides access to many private offerings; qualified purchaser status opens additional private funds.
Accredited investor vs qualified purchaser
Accredited investor | Qualified purchaser | |
|---|---|---|
Individual test | $1M net worth excluding home, or $200K / $300K income | $5M or more in investments |
Opens | Most private offerings | Funds limited to qualified purchasers |
How do you prove you are an accredited investor?
For many private offerings, you simply confirm your status in the subscription agreement. For offerings that advertise publicly, the issuer must take reasonable steps to verify it, such as reviewing tax returns, brokerage statements or a letter from your CPA, attorney or registered investment adviser.
Why do accredited investor rules exist?
Private offerings generally provide fewer required disclosures and investor protections than registered public offerings. Accredited investor rules aim to identify investors who can evaluate the risks and bear potential losses. Critics argue that wealth does not necessarily indicate financial sophistication. In 2020, the SEC partly addressed that concern by allowing holders of certain professional credentials to qualify regardless of income or net worth.
Talk to us
To talk through your own situation, please call 212-697-3930, email ep@amadeuswealth.com, or schedule a meeting at calendly.com/ep-awa.
Edward Papier, CIMA, CF2, CM&AA
President, Amadeus Wealth Alternatives, Hackensack, NJ
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