How Amending the Accredited Investor Rule Can Stabilize Markets, Enhance Portfolio Returns and Foster Innovation

On December 18, 2019, nearly 4 years after the House passed the Fair Investment Opportunities for Professional Experts Act (H.R. 2187) with overwhelming bipartisan support (347 to 8), three of the five SEC commissioners voted to publish a proposal to broaden the accredited investor definition - giving more individuals the ability to strengthen their investment portfolios through asset class diversification.

Thus far, the public comments received by the SEC strongly favor the expansion of the accredited investor definition to include licensed financial advisors and ‘knowledgeable employees’ of private investment funds.

Below is a copy of my comment letter which underscores some of the rarely discussed macroeconomic benefits of expanding (or altogether eliminating) the accredited investor rule. These include: mitigating both portfolio and market risk, enhancing the effectiveness of widely accepted diversification strategies, and decreasing the correlation among varying asset classes.

I'd love to hear your opinions and would welcome a spirited dialogue. Please feel free to comment, praise, critique, poke holes or even call me names. Trust me, I can handle it.

The 3-page letter can also be downloaded at https://www.sec.gov/comments/s7-25-19/s72519-6732289-207473.pdf.