Non-accredited investor
What is it?
Is an investor who does not meet the financial regulation requirements to be considered an accredited investor. Non-accredited investors usually face restrictions on the types of investment opportunities they can access, since regulations aim to protect this group from financial products that carry higher risk.
Although non-accredited investors don’t have access to the same exclusive investments as accredited ones—like private equity funds or certain alternative products—they can still take part in a wide range of investments through more traditional and regulated financial products, such as stocks, bonds, and ETFs (exchange-traded funds).
Key aspects to consider
The restrictions that non-accredited investors face are based on the idea that they may lack the experience, capital, or knowledge to fully understand and take on the risks that come with more complex types of investments. Still, the rise of investment platforms and the growth of online markets have made it possible for non-accredited investors to explore a broader variety of assets and investment opportunities.
It’s worth noting that, even without access to some high-risk opportunities, non-accredited investors can still take advantage of a wide range of tools and products that help them diversify their portfolios and optimize returns within a lower-risk framework. And over time, as they build wealth and gain experience, some may eventually qualify as accredited investors.