Thoughts on using series 7 to qualify as an accredited investor?

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Thoughts on using series 7 to qualify as an accredited investor?

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Denver, CO · Member since 2018 · 133 posts · 97 votes

Has anyone successfully used a series 7 in order to qualify as an accredited investor to invest in RE syndications? 

If so, can you share about your experience and any potential benefits or drawbacks? 

I have been considering this for the following reasons:

- The cost of $245 for the test seems very reasonable given the substantial increase in returns compared to a REIT

- The risk of investing in a RE syndication as a debt investor or even equity seems very low compared to the stock market or other asset classes right now 

- I would hope that studying for a series 7 would make someone a smarter investor

As a side note, how is it considered too risky for the average investor to invest in a real estate backed investment but investing in Bitcoin or Dogecoin is considered safe for the general public? 

https://www.finra.org/registra...

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Jim PfeiferBusiness Member
Investor · Dublin, OH · Member since 2014 · 241 posts · 495 votes
4y

I am not an expert here, but my understanding is that the Series 7 requires you to be sponsored by a member firm - so you would basically need to be a financial advisory working with an advising firm.  The Series 65 does not have that requirement - anyone can take it.  That, and it is a much easier test to pass than the 7.  Both will get you accredited but the Series 65 might be the way to go for anyone who is not looking to work for a financial advising firm.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Henry Lazerow

    I agree - one reason for accreditation is most of the offerings are SEC exempt so the potential for bad actors is significantly higher. The reason you can buy stocks or other items on the market is because they are qualified and reviewed by the SEC.

    Without getting into if $1M or $250k is the right number - that is non-winnable debate. But as others mentioned, people at that bracket typically can afford to lose that money and the govt would rather have that number higher than lower.

    If someone wants to use the licensing as a loophole and then gets burned, well shame on them. The extra $ you may make from a $25k investment in a syndication is not going to change your life.

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  • Justin Bauer
    Investor · Cannon Falls, MN · Member since 2016 · 150 posts · 55 votes
    4y

    The best way to become accredited is time and deals.

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