What Is an Accredited Investor? Everything You Need to Know Before You Can Access Our Programs

Path 2: Joint Income With Spouse

• Both spouses must contribute to the income — it cannot be entirely from one person to qualify under the joint test
• Spousal equivalents recognized under state law were formally added to the definition by the SEC's 2020 amendment
• If your combined income qualifies but individual income does not, you must use the joint income threshold — you cannot use $200,000 individual if your individual income is $180,000

Path 3: Net Worth

• What counts toward the $1M: Investment accounts, retirement accounts (401(k), IRA, pension), real estate other than primary residence, business equity, vehicles, art, collectibles, and other assets at fair market value.
• What is excluded: The value of your primary residence — and, symmetrically, any mortgage on your primary residence up to the property's fair market value. If your primary residence is underwater (mortgage exceeds value), the excess negative equity does count against your net worth.
• How to calculate: List all assets other than primary residence at current fair market value. Subtract all liabilities other than mortgage on primary residence (up to home FMV). If the result exceeds $1,000,000, you qualify.

Path 4: Professional License (Added 2020)

• FINRA Series 7 (General Securities Representative) license in good standing
• FINRA Series 65 (Investment Adviser Representative) license in good standing
• FINRA Series 82 (Private Securities Offerings Representative) license in good standing
• The license must be current and active — not expired or suspended. Verify your license status at FINRA BrokerCheck (brokercheck.finra.org). This path is primarily relevant for financial advisors, broker-dealer representatives, and registered investment advisers who may not meet the income or net worth thresholds but have professional securities expertise.

Documentation: 506(b) vs 506(c) Programs

Rule 506(b) Programs: Self-Certification

Rule 506(c) Programs: Independent Verification

• Income verification: IRS Form W-2, Schedule K-1, 1099, tax returns for the two most recent years, and a written representation about current-year income expectation.
• Net worth verification: Statements from financial institutions showing assets (bank, brokerage, 401k) within the prior three months. Credit report or other documentation of liabilities. Written representation about primary residence exclusion.
• Third-party verification letter: A letter from a registered broker-dealer, SEC-registered investment adviser, licensed attorney, or CPA confirming they have reviewed your financial information and that you qualify. This is the cleanest and most common approach for busy professionals.
• Online verification services: Services like Verify Investor (verifyinvestor.com) or InvestReady complete the verification process for a nominal fee and issue a verification letter accepted by most issuers.
• For investors who work with a CPA or financial adviser, the third-party letter is typically the fastest option. Your advisor confirms in writing that they've reviewed your tax returns or financial statements and that you qualify as an accredited investor. This letter is valid for 90 days and is accepted for any 506(c) program during that window.

Who Typically Qualifies: Common Investor Profiles

• Attending Physicians and Surgeons: Starting salaries for hospital-employed physicians often begin above $200,000 and reach $300,000–$600,000+ for specialists. Income qualification is typically straightforward after the second year of practice. Residents may need to wait until their attending years.
• Practice Owners: Physicians who own their practice have both salary and distribution income. Combined personal income typically well exceeds $200,000 individual threshold.
• Corporate Executives (VP and above): Base salary plus bonus often exceeds $200,000 for VP-level and above at most companies with >500 employees.
• Business Owners: Business owners with profitable companies of any size. The $200K threshold is met by many business owners who draw a combination of salary and distributions.
• Attorneys and Partners: Law firm partners typically exceed income thresholds. Associates in large firm markets may qualify after several years.
• Real Estate Investors: Investors with substantial real estate portfolios typically qualify on net worth given property values net of primary residence.

What Accreditation Does NOT Mean

• The investment is suitable for you — suitability depends on your full financial picture, risk tolerance, time horizon, and investment objectives
• The SEC has reviewed or approved the offering — Regulation D is an exemption from registration, not an endorsement
• You're protected from losses — accredited investors can and do lose money in private placements
• You have to invest — qualification is eligibility, not obligation
• The program is legitimate — accredited investor status doesn't protect against fraud. Verify independently using RRC data and SEC EDGAR.

Frequently Asked Questions

Why the Accredited Investor Standard Exists: The SEC's Rationale

The Four Qualification Pathways in Detail

Illustrative example only. Actual tax savings and investment returns depend on individual circumstances including tax bracket, AMT exposure, state tax treatment, program structure, and well performance. Not a projection or guarantee of results. Consult a qualified CPA before making any investment decision.

Common Misconceptions About Accredited Investor Status

• 'I need to prove it every time I invest': Under Rule 506(b), you self-certify by completing the subscription questionnaire. You are not required to submit tax returns or financial statements.
• 'My primary home counts toward the $1M threshold': No. The primary residence exclusion was specifically added to Regulation D to prevent homeowners from qualifying based on home equity alone.
• 'I qualify this year because of a large bonus': The income threshold requires the income in each of the two most recent tax years. A single high-income year does not qualify you under the income test — you need two consecutive years above the threshold.