Benefits of Obtaining an Accredited Investor Certification
If you are an accredited investor, you have access to a wider range of investment opportunities than the normal investor. This in fact, is the major benefit of attaining accredited investor certification. Accredited investors have a number of options not available to other types of investors, such as private placements, crowdfunding, and other alternative investments.
The benefits available to accredited investors include:
Access to an Extensive Range of Profitable Investment Opportunities
Accredited investors have access to the best options when it comes to investments not categorized in the standard securities listed on the exchanges. Entities that provide these opportunities to investors benefit from the class of investors known as accredited investors who want to participate in their projects. Some of the examples of investment options open to accredited investors include:
- Real estate crowdfunding
- Commercial real estate
- Venture capital (or angel investing)
- Hedge funds
- Farmland crowdfunding
- Real estate syndications
The Ability to Diversify
Diversification options are greater for those with accredited investor certification. An investor who has attained this status may choose, for example, to invest in real estate crowdfunding which can offset some of the volatility of other investments.
The Potential for Earning Higher Returns
Some of the investments open to accredited investors are on the risker side, but also offer potentially higher returns. It is always true that with greater risk comes the potential for greater loss, but the investor must know how to approach this risk with an intelligent and informed approach.
Due to the fact that those with accredited investor certification fulfill the criteria for investment sophistication and/or wealth, they have permission from the SEC to invest in vehicles such as private placements offered by startups and other small businesses. They can invest in opportunities that are exempt from SEC registration.
Accredited investors may also be entities such as corporations with assets of more than $5 million USD and banks. They can be charitable organizations with assets over $5 million USD as well.
The benefits of obtaining accredited investor certification are truly extensive and open the door to a wide range of investment opportunities not accessible to other investors. If you are interested in becoming one of these investors, look into the various ways now available to become one, which goes beyond the income and net worth requirements.