Verification of Investor Accreditation and Sophistication

What this video covers

• The precise accredited investor income thresholds ($200,000 individual and $300,000 joint, not double) and the two-consecutive-year requirement with reasonable expectation
• The net worth test mechanics ($1 million excluding primary residence) and the 60-day mortgage debt rule that prevents inflating net worth artificially
• The three financial industry regulatory authority (FINRA) licenses that confer accredited status (Series 7, Series 65, Series 82) and what "in good standing" implies
• Why verification must be reasonably current for each offering and cannot be carried over from prior private placements
• The acceptable documentation methods for verification: internal revenue service (IRS) forms for income, bank or brokerage statements plus credit reports for net worth, and third-party confirmation from registered professionals
• The complete separation of accreditation (objective wealth test) from sophistication (subjective knowledge and experience test)
• Why eligibility for a private placement never replaces the full customer-specific suitability analysis, and why reducing position size does not cure an unsuitable recommendation