If you’ve spent any time in the investing world, you have no doubt heard the term “accredited investor” quite often. Many institutions won’t even allow you to take part in their investments without proper accreditation. Then again, there are plenty of other institutions that will allow investors to buy securities with no accreditation at all. What’s going on here?
In this article, we’re going to cover what accreditation means, why it matters, and how you can become an accredited investor!
What is Accreditation?
An accredited investor is an investor that is authorized to trade or deal in financial securities that are not registered by financial authorities. What exactly an “unregistered security” means in the financial world is in itself a complex topic…we won’t dive too deep in this article.
Simply put, a security becomes registered by the Securities and Exchange Commission (SEC) when the issuing body provides the SEC with detailed information and documentation about said security. Before they do that, the security is “unregistered.”
Unregistered securities are not inherently better or worse than their registered counterparts, however, they tend to come with additional risks and complications. Because of this, the SEC requires all investors choosing to take part in an unregistered security to be “accredited” to verify that they are sophisticated enough to stay safe while investing.
The criteria for becoming an accredited investor is generally based on income, the idea being that high net worth individuals are at less risk of financial catastrophe if the investment fails. However, there are often other criteria involving the investor’s experience and overall knowledge.
Ensuring investors are accredited is the responsibility of the body issuing the security. For example, if a company wants to sell unregistered securities to investors, the company must vet its investors before making any sales.
Why Accreditation is Important
The SEC’s job is to make sure that investors are protected from both scam investments as well as investments that are less safe than said investors were led to believe. You don’t have to look through news articles for very long before finding examples of investors losing a lot of money on investments that turned out to be, for lack of a better word, bunk.
However, there is a good reason to offer unregistered investments. Since they don’t have to go through the SEC’s filing process, offering these investments is cheaper and quicker for an issuing body. Furthermore, the increased risk almost always means a higher potential for great returns.
As a result, the SEC allows these unregistered securities to be sold…but ONLY to investors with enough income to be safe, and enough experience to know what they’re doing. This system helps protect smaller investors while still giving larger, experienced investors the chance to earn big.
How to Become Accredited with Caribbean Capital Group
Caribbean Capital Group is one such company providing investments to accredited investors. We have some great opportunities on offer, such as our farm in Belize, Finca Chocolat. However, we also want our investors to stay safe!
We use a third-party company to verify the income and investing status of our potential investors, and we make sure to establish a substantive relationship with our investors through our investor questionnaire and prerequisite phone calls before they can invest.
If you want to become an accredited investor with CCG, the best way to get started is to fill out our investor questionnaire on our website. We ask questions about your income, investing status, and what you want from your investments, all to make sure we can offer you the best opportunities we can. After that, we will set up a phone call with you to begin our relationship! If you want to invest with us, take a moment to get accredited today!
To learn more about investment opportunities available in Belize, check out our latest offerings here.