January 10, 2020
I appreciate the efforts that the SEC is taking to consider making enhancements to the accredited investor definition. That being said, I do not believe the enhancements go far enough.
I am in my 30s and am not fortunate enough to qualify for either the income or net worth requirements, and I also do not have my series 7, 65, or 82 license. But what I do have is sufficient knowledge of investments and an understanding of the risks associated with them to make a reasonable decision that does not jeopardize my long term financial welfare.
While the accredited investor definition is understandably intended to protect small investors, the byproduct is it prevents small investors from being able to grow their wealth to have a chance to qualify based on income or net worth.
I strongly urge the SEC to consider one of the following options to improve the definition. 1. Create a free (or low cost) test that people can take to test their financial acumen and literacy as it relates to investments. People that pass the test become accredited. 2. Create a junior or tier 2 accreditation that has a lower income and net worth requirement that allows small investors to invest in up to a lower dollar amount (say $25k or $50k).
While I understand the SEC's intent to protect less knowledgeable people from being taken advantage of, I think the above still enables that to happen but also allows smaller investors the opportunity to build their wealth and prosper.
Thanks for your consideration.
Josh Kelner