The INVEST Act Would Change Who Qualifies as an Accredited Investor

TL;DR: The House passed H.R. 3383, the INVEST Act, on December 11, 2025, by a 302-123 vote. The bill moved to the Senate Banking Committee on December 15, 2025. As of June 2026, no Senate floor vote is scheduled. Four things would change under the bill: mandatory inflation adjustments to the income and net worth thresholds every five years, codification of the accredited investor definition into statute, an expanded professional license pathway, and a free FINRA-administered exam that anyone can take to qualify based on financial knowledge alone. The inflation adjustment is the most consequential provision long-term.

Why the Current Definition Is Broken

The current accredited investor thresholds have not changed since 1982. To qualify as an individual, you need $200,000 in annual income ($300,000 joint) or $1 million in net worth excluding your primary residence. Those numbers were set during the Reagan administration. Congress and the SEC left them frozen for 44 years.

The math on what that freeze did is striking. If you adjusted the $1 million net worth threshold for CPI-U inflation since 1982, it would sit at roughly $3.0 to $3.1 million today. The $200,000 income threshold, similarly adjusted, would land somewhere between $607,000 and $650,000. Instead of raising the bar, the frozen thresholds let inflation do the opposite work: they quietly expanded the accredited pool without any policy decision being made.

According to SEC research published in June 2025, 18.5% of U.S. households now qualify as accredited investors. In 1983, the year after the thresholds were set, that figure was 1.8%. The SEC designed these rules to limit private market access to sophisticated investors who could absorb the risk. The intent was never for nearly one in five households to qualify. This is a dual failure. The thresholds simultaneously exclude people who are financially literate but not wealthy while including millions of households that crossed the threshold purely through asset price appreciation, not financial sophistication.

What the INVEST Act Actually Changes

The Harvard Law Forum on Corporate Governance summarized the bill's capital formation provisions in January 2026. For accredited investor purposes specifically, four provisions matter.

Provision	What It Does	Why It Matters
Mandatory CPI-U inflation adjustment every 5 years	Ties income and net worth thresholds to CPI on a five-year cycle	Stops the threshold drift that turned 1.8% household eligibility into 18.5%
Codification into statute	Moves the definition from SEC regulation into federal statute	Makes future changes require Congressional action, not just SEC rulemaking
Expanded professional license and education pathway	Extends eligibility beyond current Series 7, Series 65, and Series 82	The 2020 expansion only added 0.01% of US population; this provision goes further
Free FINRA-administered SEC exam pathway	Creates a knowledge-based exam anyone can take at no cost	Decouples accredited status from wealth entirely for the first time

The inflation adjustment provision deserves closer attention. Under the bill, the SEC would be required, not permitted, to adjust the thresholds using CPI-U data on a five-year schedule. The first adjustment would not happen immediately upon enactment. But the direction of travel is clear. For existing accredited investors, that means your current status is not permanently guaranteed. The people most at risk are those who qualified by a modest margin.

The Exam Pathway

The free FINRA-administered exam is the provision that draws the most attention from both supporters and critics. The SEC's current accredited investor framework already allows qualification through professional licenses, but the INVEST Act goes further by creating a pathway with no cost barrier and no income or wealth requirement at all.

SEC Chairman Paul Atkins, in a February 23, 2026 speech at the U.S. Chamber of Commerce, stated his intention to "support ability of individual investors to participate in private markets" and described a knowledge-based exam as recognizing "that financial sophistication can scarcely be measured by income or net worth alone." Under the bill's terms, the exam must be established within one year of enactment. It would be administered by FINRA, would be free, and once you pass, there is no retesting requirement.

I think this is the right direction. A portfolio manager who earned a CFA and ran institutional strategies for 15 years should not be locked out of a private fund because he left a $180,000 salary to start a consulting practice. The current system has no mechanism for him. The exam pathway creates one. The risk is in implementation: the exam's design will determine whether it serves as a genuine sophistication filter or a low-barrier checkbox.

Status and What Is Next

The American Bar Association's Business Law Today noted after the House vote that the bill's bipartisan margin, 302 to 123, was unusually strong for financial services legislation. Eighty-seven Democrats joined all present Republicans in voting yes. The Senate picture is different. The bill sits with the Senate Committee on Banking, Housing, and Urban Affairs as of June 2026. No hearing has been scheduled. Senator Elizabeth Warren has signaled opposition, calling it "a sweeping package filled with giveaways to private equity billionaires." The most plausible path to Senate passage is bundled legislation as part of a broader capital-markets package.

Reg S-P June 3 Deadline: The Thing That Already Changed

While the INVEST Act moves slowly through the Senate, a different compliance deadline arrived on June 3, 2026. If you are an RIA managing a private fund, this one already applies to you. The SEC's amended Regulation S-P now covers private fund advisers. The key change: limited partners in your funds are classified as customers for Reg S-P purposes for the first time. That classification triggers a full set of cybersecurity and data protection obligations.

According to Baker Donelson's compliance guidance, three obligations now apply to smaller RIAs. First, you need a written incident response program with a 30-day customer notification requirement after a data breach is discovered. Second, your vendor contracts must include a 72-hour breach notification clause. Third, you need recordkeeping infrastructure that documents compliance on an ongoing basis. The SEC named Reg S-P compliance as a 2026 examination priority.

The CD&I Tightening

Here is the tension worth understanding. At the same time the INVEST Act proposes to expand who can qualify as an accredited investor, the SEC issued guidance in March 2026, C&DI 148.01, that tightens how issuers verify accredited status in dual-track offering programs. The specific scenario: you run a Rule 506(c) offering, which permits general solicitation but requires reasonable steps to verify accredited status. You then want to bring some of those investors into a Rule 506(b) offering. C&DI 148.01 confirms this transition is permissible, but only if you have established a substantive pre-existing relationship with those investors. A short-form questionnaire alone is not sufficient. This means the SEC is simultaneously loosening (who qualifies) and tightening (how you verify).

What Accredited Investors Should Do Now

First, verify your own status under the current rules. Know whether you qualify by income, net worth, or professional license. Know your margin. If you cleared the income threshold by a narrow amount last year, model what a 20% to 25% threshold increase would mean for your eligibility in the next five-year review cycle if the INVEST Act passes.

Second, check whether your professional licenses qualify. The recognized licenses are Series 7, Series 65, and Series 82 in good standing. The license pathway does not move with inflation adjustments. If you are an RIA advising private fund clients, treat the June 3, 2026 Reg S-P deadline as already here. Document your incident response program. Update your vendor contracts. The SEC is examining for this in 2026. U.S. public company listings declined from roughly 8,800 in 1997 to fewer than 4,000 in 2024. The accredited investor definition is the gate to private markets for individual investors. The INVEST Act is the most serious attempt to redesign it in years.

The Broader Context: Why Private Markets Access Matters Now

The private markets access question has never been more consequential. U.S. public company listings declined from roughly 8,800 in 1997 to fewer than 4,000 in 2024. The companies that are defining the next decade of economic growth are staying private longer. Anthropic, SpaceX, Stripe, and OpenAI have all raised billions at valuations exceeding $100 billion while remaining private. The accredited investor definition determines who can participate in these companies before they reach public markets.

For the 81.5% of U.S. households currently barred from private markets, that exclusion means missing the compounding phase of some of the most valuable companies ever created. The argument for expanding access is not just fairness. It is that the current framework, designed in 1982 to protect unsophisticated investors, now functions primarily to exclude people who could benefit from private market exposure while including people who crossed the threshold through house price appreciation with no relevant financial sophistication.

The argument against expansion is also real. Private market investments carry risks that fundamentally differ from public equities: illiquidity that can last 7 to 10 years, limited disclosure requirements, subjective valuations, longer holding periods, and potential total loss. The SEC's investor advisory committee has recommended prudential investment limits for investors qualifying solely through education or exam rather than wealth. Getting the design right on the knowledge-based exam pathway matters enormously for investor outcomes. Too easy, and it becomes a checkbox that provides false confidence. Too hard, and it replicates the exclusionary dynamics of the current wealth test. The INVEST Act creates the framework. The implementation details, which the SEC and FINRA must work out after enactment, will determine whether the expansion is meaningful or cosmetic.

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.