One of the most significant barriers for most people to access private investments is the accreditation requirement for making private investments. When you meet the accreditation requirements, you can access a world of private investments that most people cannot.
For folks who do not meet the net worth or income requirements to be accredited, there is now another path outlined by the SEC to reach accreditation status.
Become Accredited Through Education
For those that do not satisfy the traditional net worth or income accreditation requirements, the Series 65 license is now the fastest and easiest way to become accredited and participate in private investments.
For $175 in fees, roughly 60 hours of study, no firm sponsor, and a 130-question 3-hour test, you can become Series 65 licensed and officially be considered an accredited investor.
Once you pass the test and receive your license, you will be able to purchase securities not registered with the SEC legally. This means that you will be able to participate in venture capital funds, real estate funds, make angel investments, and more.
Why Does Accreditation Make Sense for Self-Directed Investors?
For Self-Directed investors, accreditation makes sense because of the investments they can access with their retirement funds. For folks whose retirement savings are in mutual funds, they may not have the minimums required for private investments with cash, but the same folks may have retirement savings with which they easily meet the minimums.
Becoming an accredited and licensed investor makes sense for those with Self-Directed accounts merely because of the options available to investors with full control and autonomy to invest their retirement savings in alternative assets.
What Exactly Is the Series 65 License?
Administered by the Financial Industry Regulatory Authority (FINRA), the Series 65 is an exam and securities license required for individuals to act as investment advisers in the US. The Series 65 exam consists of 130 questions covering economic factors and business information, investment vehicle characteristics, client investment recommendations, strategies, laws, regulations, and guidelines.
To pass the Series 65 exam, folks must correctly answer 94 of the 130 questions. The exam is three hours and can be taken online due to the ongoing situation regarding COVID.
For serious investors, a Series 65 license might be something that should be considered regardless of net worth and accreditation. This is especially true for folks who are making private and alternative investments for the first time.
Thomas Young: May 19 2023
