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Could you pass an SEC test to invest in private assets?

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12 months ago

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If you want to access investments typically reserved for the wealthy, regulators may someday let you — provided you can pass a test.

That in itself may not be easy, considering that many consumers can’t pass a basic financial literacy quiz. But coming up with an exam that helps protect investors is also more difficult than it sounds, experts say.

Lawmakers and regulators have for years kicked around the idea of a knowledge test to become a so-called accredited investor. Accredited investors are allowed to invest in a wider range of assets, including pre-IPO companies, private credit and equity, venture capital and hedge funds.

The latest effort, which the U.S. House of Representatives approved last month, proposes having the Securities and Exchange Commission devise a test to determine if an investor has the knowledge and sophistication to understand the valuation and risk of these investments.

It comes amid a broader push to make private-market assets — that is, investments that are not publicly traded — available to more investors.

Private-market investments can be debt or equity in early-stage companies or startups, or private equity deals. Private investors owned Figma before its IPO, for example. These types of investments may offer higher returns, experts say, but they are also higher risk. 

The risks to investors can be systemic issues, like a lack of regulatory guardrails in private markets, and also unique to each individual. That’s hard to test for.

“The devil is in the details,” said James Andrus, a member of the SEC’s investor advisory committee. “It’s incredibly difficult to create such a test, and it’s unclear whether it offers substantial investor protection.”

How investors become accredited now

Currently, to qualify as accredited, investors generally need an annual earned income of $200,000 for individuals, or $300,000 for married couples. Individuals or couples can also qualify with a total net worth of at least $1 million, not including the value of their primary residence.

Those wealth test thresholds are not pegged to inflation and haven’t changed since they were first developed in the 1980s. As a result, more households have become accredited over the years as wealth and incomes grow.

Opening 401(k)s to private markets: Here's what to know

Licensed investment professionals can also qualify as accredited, having passed either the Series 7, 65 or 82 exams. Those tests are aimed at ensuring professionals understand how to comply with securities laws and regulations.

Designing an investor test could be tricky

Financial advisors and other experts say a test for becoming an accredited investor would need to gauge understanding of different types of securities as well as the risks associated with private assets, including their limited liquidity and disclosures, subjective valuations and longer investment horizons.   

“The test would essentially need to assess whether this person has that knowledge and understanding to manage investments that do not come with a layer of professional oversight or regulatory protections to rely on,” said Yanely Espinal, a director of educational outreach at Next Gen Personal Finance.

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Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

Pre-IPO, venture capital deals typically require minimums that can reach six figures. So an understanding of diversification, risk and how this type of investment should fit into a portfolio should be required knowledge, experts say. But it could be difficult to test for that understanding, they say.

“We’ve been blessed with a lot of bull markets and high growth recently, but these things can go down and potentially default,” said certified financial planner Chelsea Ransom-Cooper, chief financial planning officer at Zenith Wealth Partners in Philadelphia. “I would just hope that whatever exams or structures are put in place are there to protect the end investor.”  

Think about what it would mean to lose $20,00 in cash savings if your annual income is $80,610 (the median in the U.S.), said Espinal, a member of the CNBC Global Financial Wellness Advisory Board.

“That would represent nearly a quarter of your annual income being lost to one investment,” she said. “That’s drastic.”

Cryptocurrency adds another wrinkle. Crypto and private market assets are both considered alternative investments, and having a test for one but not the other may offer mixed messages for investors.

“You cannot invest in a real company that happens to be private, but you can invest in something equally risky, crypto, because you don’t have the same accredited investor requirement,” said Andrus.

Even basic financial literacy quizzes stump many

Depending on how it’s written, an SEC knowledge test on private markets could be challenging for many people, if broader financial literacy tests are any indication.

Take the FINRA Investor Education Foundation, which has a seven-question financial knowledge multiple-choice quiz, with questions about “fundamental concepts” including interest rates, inflation, debt and risk. More than 25,000 U.S. adults took the quiz as part of a broader financial capability study in 2024.

Only 4% of respondents answered all seven questions correctly. Less than half, 46%, answered at least four correctly, little changed from 2021. 

For example, when asked what happens to bond prices when interest rates increase — do they rise, fall or stay the same? — 42% of respondents said they didn’t know, while another 33% answered incorrectly. The correct answer is fall.

Some accredited investors have ‘no freaking clue’

Even investors who already qualify as accredited could welcome, and benefit from, such a test, experts say.

“A lot of people with a lot of money do these deals and have no freaking clue what they’re getting into,” said Rich Diemer, the managing director of CAV Angels, a non-profit club housing an angel investment group catering to University of Virginia alumni. “They get in these deals because they know someone who’s in, or they know a group that’s in, or they heard of this unicorn or that unicorn.” 

The CAV Angels club does a lot of work educating members, he said, helping them understand how to do due diligence and assess market potential, as well as what it takes to support an early-stage company. In the case of angel investing, companies often need additional funding.

“It’s not like a one-and-done thing, said Diemer. “It’s a nursing along an early-stage company to a point where they then get handed off to VCs [venture capital firms].”

Diemer said he supports the idea of a test to help younger people, who can demonstrate the knowledge but who haven’t built enough wealth, to qualify as accredited.

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Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

Published

2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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