Expansion Beyond Wealth and Income
Under current law, to qualify as an “accredited investor”, the threshold for many private offerings under Regulation D requires an individual to generally satisfy income or net worth tests, among other limited categories such as being a registered broker, etc.
The INVEST Act, specifically via its component Fair Investment Opportunities for Professional Experts Act (H.R. 3394), would expand the definition to allow individuals to qualify via “professional expertise or experience,” even if they do not meet high income or net worth minimums. In practice, this could include individuals who hold certain industry licenses, are registered with self-regulatory organizations (e.g., FINRA, the SEC, or similar), or who meet educational or work-experience benchmarks as defined by the SEC.
In addition, the bill would require the SEC to review and adjust the existing net worth threshold (currently $1 million, excluding primary residence) for inflation every five years, rather than let it remain fixed. Supporters argue this change makes the standard more sustainable over time.
In short, wealth will no longer be the only path: individuals with the right professional credentials or licenses could also gain accredited status.
New “Certifiable Investor” Path
The INVEST Act also includes the Equal Opportunity for All Investors Act (Section 203 of INVEST), which would require the SEC to create an exam or certification process. This exam would allow individuals to become accredited investors by passing a test verifying their knowledge or sophistication, regardless of income or net worth.
This mechanism aims to democratize access. Rather than relying solely on financial thresholds or licensed status, an individual could become “accredited” by demonstrating competency through standardized certification.
What This Means: Potential Impact on Private Investments and Self-Directed IRAs
More Investors, Broader Private Market Access
If these provisions become law, the pool of individuals eligible to invest in private offerings, private equity, private credit, real estate syndications, venture capital, private funds, and similar opportunities, could expand significantly beyond just high-net-worth individuals. That means more retail and everyday investors, including those using retirement accounts, could qualify. Many funds today restrict participation to accredited investors, so this could unlock a wave of new potential investors.
Will the INVEST Act Become Law?
The legislation has now been sent to the Senate Banking, Housing, and Urban Affairs Committee, where it is waiting for further consideration. At this time, there is no standalone Senate version of the bill, which means its best path forward may be as part of a broader capital-markets or economic-growth package later in 2025. With the Senate having just completed its work on major tax legislation, attention may soon shift toward financial-services reform and investor-access initiatives. Passage is not guaranteed, however, as Senate Banking Committee leadership, particularly Ranking Member Senator Elizabeth Warren of Massachusetts, could pose resistance to elements of the proposal.
Impact of the INVEST Act on the Self-Directed IRA Industry
For the Self-Directed IRA industry in particular, the passage of the INVEST Act could be a major boost. Self-Directed IRAs already allow retirement savings to be directed into alternative investments, but the Act would make these accounts accessible to a wider range of individuals eager to use their retirement funds to access private deals. More accredited investors could translate into greater demand for alternative asset investments through retirement accounts.
What the INVEST Act Could Mean for Self-Directed IRA Investors
Assuming the INVEST Act becomes law, here is how a Self-Directed IRA investor might benefit:
- An investor who previously did not meet the $1 million net worth or income threshold, but who holds a recognized license or passes the new SEC certification exam, could now qualify as “accredited.”
- They could use their Self-Directed IRA (Traditional, Roth, SEP, etc.) to invest in private funds, real estate syndications, private equity, private credit, or other alternative investments previously off-limits.
- Because Self-Directed IRAs already permit alternative investments, subject to compliance, this change could significantly expand the universe of available deals.
- For newer or younger investors, this creates a path to build diversified retirement portfolios earlier, using alternative asset classes that have historically been available only to wealthy individuals or institutions.
- For the Self-Directed IRA industry, especially experienced providers well-versed in alternative investments, this could drive a surge in demand as more investors seek alternative allocations for their retirement capital.
Final Thoughts: What the INVEST Act Could Unlock
For years, I have believed that the accredited investor rules are outdated, overly restrictive, and unfairly block millions of capable Americans from accessing high-quality private investments that could meaningfully improve their long-term financial security and retirement outcomes. The current thresholds, a $1 million net worth or $300,000 in annual income, are arbitrary and fail to measure what truly matters: knowledge, experience, and the ability to evaluate risk. A Harvard MBA in finance earning $225,000 per year is not deemed “accredited,” yet someone with no financial education who simply crosses an income threshold is. That logic does not hold up.
What makes the status quo even more troubling is that everyday investors are freely allowed to speculate in volatile penny stocks, heavily promoted IPOs, and meme-driven public equities, yet are barred from participating in professionally managed private funds, promising venture-backed startups, or late-stage growth companies such as OpenAI or SpaceX. The regulatory system currently protects access for the wealthy, not based on sophistication, but based on wealth alone, while limiting the middle class to a far narrower investment universe. That is neither fair nor consistent with the broader goal of financial inclusion.
That is why I strongly support the INVEST Act and its effort to modernize the accredited investor definition. Expanding eligibility based on education, experience, or a demonstrated understanding of risk brings much-needed logic to a system that has been frozen in place for decades. If passed, this legislation would unlock access to alternative investments for millions of Americans who want to diversify their retirement portfolios, invest in innovation, and participate in the growth of the next great American companies and ideas. I am hopeful the bill reaches the finish line, because real reform in this area is long overdue.
About the Author
Adam Bergman is a tax attorney and the founder of IRA Financial, one of the largest Self-Directed IRA platforms in the United States. He has helped more than 27,000 clients take control of their retirement savings, overseeing over $5 billion in retirement assets. Adam is also the author of nine books focused on helping investors understand and confidently manage their retirement strategies.
