The Informed Investor Access Act: What Advisor-Verified Accreditation Really Changes

Rep. Troy Downing wants your financial advisor to decide whether you're sophisticated enough to buy a private placement. His bill, the Informed Investor Access Act, would let a registered investment adviser certify a client as an accredited investor based on professional judgment, no net worth statement required. It's a narrow fix aimed at a specific complaint from the advisor community, and it's already dividing the industry it's meant to help.

The bill surfaced in coverage from InvestmentNews, which broke down how the advisor-certification pathway would work alongside the existing income and net worth tests. I've spent two decades watching Congress tinker with the accredited investor definition, and this is the most consequential tweak on the table right now. You need to understand what it changes, who's pushing it, and who's raising a hand to say slow down.

The current test, and what changes

Section 2(a)(15) of the Securities Act of 1933, as implemented through SEC Regulation D, sets the current bar. An individual qualifies as an accredited investor by hitting one of two numbers: $200,000 in annual income ($300,000 with a spouse) for the last two years with a reasonable expectation of the same this year, or $1 million in net worth excluding your primary residence. The SEC added a third path in 2020, letting certain professional certifications like the Series 7, 65, or 82 qualify you regardless of income or assets. Those thresholds have not moved with inflation since 1982, which is itself a long-running fight I'll come back to.

Downing's bill adds a fourth path, and it's structurally different from the other three. Instead of a number you hit or a license you hold, it lets a registered investment adviser or broker-dealer certify that a specific client has the "knowledge and experience in financial matters" to evaluate a private deal's risks. No dollar figure attached. No test to pass. Your advisor signs off, and you're in.

Here's the table version, because the comparison matters more than any paragraph I could write about it.

Pathway	Current standard	Who verifies	Dollar threshold
Income test	$200K individual / $300K joint, 2 years running	Issuer or third party (506(c) deals)	Yes, fixed since 1982
Net worth test	$1M excluding primary residence	Issuer or third party	Yes, fixed since 1982
Professional credential	Series 7, 65, or 82 license	FINRA/SEC records	No
Advisor certification (proposed)	Adviser's professional judgment of sophistication	The advisor selling or referring the deal	No

That last row is the entire debate in one line. Every existing pathway has a verification point outside the person recommending the investment. This one doesn't. If you want the mechanics of how issuers currently confirm accreditation under private offerings, our explainer on 506(b) vs. 506(c) verification requirements lays out why that gap matters so much to compliance officers.

Who's backing it, and why the math works for them

The trade groups lining up behind Downing's bill are the ones whose members sell into the private markets every day: the American Securities Association, the Institute for Portfolio Alternatives, and the Investment Advisers Association. The Financial Services Institute, which represents independent broker-dealers and advisors, has pushed a version of this argument for years, that the current wealth-based test is a blunt instrument that excludes plenty of financially literate people who simply haven't accumulated $1 million in assets yet. That argument has real merit, and I'm not going to pretend otherwise. A 34-year-old CFA charterholder earning $140,000 a year, managing other people's money professionally, gets locked out of the same private credit fund that a 68-year-old retiree with a paid-off house and a lucky 401(k) can buy freely. The wealth test measures assets, not competence. It never claimed to measure anything else. That's the honest weakness these trade groups are exploiting, and it's a real weakness, not a manufactured one. The Daily Upside reported that roughly 13% of the U.S. population already qualifies as accredited by income or net worth, citing CFP Board Financial Planning Review data, yet fewer than 5% of those who qualify actually own any private-market securities. The pool of eligible buyers is already large. Most of them aren't buying anyway. Sit with that gap for a second. It tells you something the trade groups don't say out loud in their public comment letters. So why push a bill that expands eligibility further, when the eligible-but-inactive gap is already huge? Because the constraint the industry actually cares about isn't the total number of accredited households. It's the number of accredited households a given advisor can personally reach and place into a fund without those clients independently clearing a net worth bar. Most people who qualify today never get a call from a wholesaler pitching a private credit fund. They're accredited on paper, invisible in practice. Advisor certification doesn't find those invisible households. It creates a different pool entirely, one built around whichever clients a given advisor already has a relationship with and a reason to place. That's a distribution fix, not an access fix, and the difference matters enormously if you're trying to figure out who actually benefits.

Who's opposing it, and what precedent they're pointing to

The Public Investors Advocate Bar Association filed a comment letter with the House Financial Services Committee that reads like a warning label. PIABA's HFSC comment letter lays out the core objection in plain terms: you're asking the party with a financial incentive to sell the product to also be the gatekeeper who decides whether you're allowed to buy it. That's not a hypothetical conflict. It's the business model. PIABA's letter cites NASAA data showing that in 2020, unregistered securities accounted for more than 30% of state securities regulator investigations, the single largest category tracked. Then it names names. GPB Capital Holdings defrauded investors of nearly $1 billion, distributed through a network of more than 60 broker-dealers and RIAs who had direct relationships with the retail investors who lost money. DeepRoot Funds and Heartland Capital, two more private-placement blowups sold through advisor and finder networks, cost investors a combined $150 million. In every one of those cases, the retail investor's own advisor or a closely affiliated professional was the one who said "you should be in this deal." NASAA, the umbrella group for state securities regulators, and Senator Elizabeth Warren already fought this fight once this year over the broader INVEST Act (H.R. 3383), which would have loosened public-market disclosure rules and expanded private equity and venture capital access more aggressively. That bill stalled in December 2025 after NASAA and Warren's office argued it was a giveaway to fund sponsors dressed up as investor protection. Downing's bill reads like the version designed to survive that fight. It's narrower, it's framed around individual advisor accountability rather than wholesale deregulation, and it's easier to defend in a hearing room where members of Congress get one clean sentence to explain their yes vote. That's exactly why I take it more seriously than the INVEST Act, and why I think it has better odds of getting through committee this session. Bills that ask for a little tend to get more than bills that ask for a lot. Legal commentators covering the space, including attorney Bill Singer, have made a version of this same point in their coverage of pending HFSC private-markets legislation: narrow, technical-sounding bills move faster than sweeping ones, and they're harder for the average voter or reporter to scrutinize precisely because they sound like paperwork. If you cover compliance for a living, our piece on how accredited investor status differs from qualified purchaser status is useful background for why regulators treat these thresholds as load-bearing walls, not paperwork.

My take: this is supply-side reform wearing an access-reform costume

I'll say it plainly. I think this bill is less about opening doors for underserved sophisticated investors and more about solving a distribution problem for the private fund industry. Private credit, non-traded REITs, and interval funds have raised enormous amounts of capital over the past five years, and the industry's growth ceiling isn't product supply. It's the size of the verified-accredited buyer pool an advisor can legally place people into without friction. Look at the numbers again. Thirteen percent of Americans already qualify. Fewer than 5% of those who qualify are buying private assets. If the goal were genuinely "let smart people in regardless of net worth," you'd expect a push to lower the friction of proving existing eligibility, not a new pathway that removes the independent check entirely. Instead, the bill hands the certification pen to the same person who earns a fee, a commission, or a placement override when the client says yes. I don't think every advisor who'd use this pathway is looking to run a GPB Capital playbook. Most aren't. But rules aren't written for the honest majority. They're written for the tail risk, and PIABA's litany of blowups is the tail risk made concrete. Take away the independent net worth or income check, and the only thing standing between a client and a bad illiquid product is the same professional judgment that failed to stop three separate multi-hundred-million-dollar frauds in the last decade. That's not a hypothetical. It's the track record. I also don't buy the framing that the $1 million net worth threshold is sacred. It's been flat since 1982 and hasn't kept pace with inflation, which means the SEC has been quietly loosening the definition for forty years just by standing still. Run the inflation math yourself: a dollar in 1982 buys roughly a quarter of what it buys today, so a threshold that never moved has effectively dropped by three-quarters in real terms. If Congress wants to fix that, index the threshold to inflation and adjust it on a schedule, the same way federal tax brackets get adjusted every year. That's a defensible reform anyone can explain in one sentence. Handing verification authority to the seller is not the same thing, and dressing it up as "advisor-verified sophistication" doesn't change what it actually does to the incentive structure. Financial planner Alvin Carlos and attorney Tara Unverzagt have both raised versions of this same concern in industry commentary: the sophistication an advisor certifies isn't the client's sophistication at all. It's the advisor's confidence in their own pitch. Those are not the same thing, and conflating them is exactly the design flaw PIABA is pointing at.

What AIN readers should actually do

If you're an advisor reading this because you think the bill would make your job easier, understand the liability exposure before you cheer for it. Certifying a client as accredited under professional judgment, without a documented net worth or income basis, creates a paper trail that plaintiff's attorneys will use against you the moment that private placement underperforms. PIABA exists because that fight happens constantly already under the current rules. This bill would hand them a cleaner theory of liability, not a shield. If you're an already-accredited investor evaluating whether this changes anything for you directly, it mostly doesn't; you already clear the bar under the existing tests. What it changes is the pool of people your sponsor or fund manager can now market to, which affects deal terms, fee structures, and how crowded the cap table gets on your next allocation. Here's what to actually watch:

• Whether the bill gets a floor vote before the current Congress adjourns, or whether it stalls in committee the way the broader INVEST Act did in December
• Whether the SEC issues its own rulemaking on inflation-indexing the $1 million and $200,000/$300,000 thresholds, which would address the actual gap without the conflict-of-interest problem
• Whether FINRA or the SEC proposes a documentation or disclosure requirement attached to advisor certification, which would at least create an audit trail
• How NASAA's state regulators respond, since they're the ones who'll be investigating the fraud cases if this pathway gets abused the way GPB Capital's network was

If you sit on either side of a Reg D offering, now is the time to read your own subscription agreements and verification procedures under Form ADV disclosure obligations and make sure your compliance file can survive a regulator asking "who verified this investor, and what did they have to gain?" That question is coming regardless of whether Downing's bill passes. For deeper background on how advisor conflicts get litigated after a private placement goes bad, our roundup on Regulation D exemptions and investor protections covers the enforcement patterns regulators already use today, patterns this bill would test directly.

Author Disclosure: Jeff Barnes, MBA has no personal position in any company, fund, or platform named in this article. Angel Investors Network has no current commercial relationship with any party mentioned. AIN provides marketing and education services, not investment advice. Past performance does not guarantee future results. All investments involve risk, including loss of principal.