Next Generation Trust Services Alerts Investors to Possible SEC Changes in Definition of “Accredited Investor” and Investing Limitations

Published on October 30, 2014

Administrator of Self-Directed Retirement Accounts Points to Recent Advisory Committee Proposals that Would Change Criteria for Who Qualifies as Accredited Investor; May Alter Who May Use Self-Directed Retirement Account for Equity Funding in Startup Companies.

Next Generation Trust Services is alerting its clients about possible SEC changes regarding who qualifies as an accredited investor. The administrator of self-directed retirement plans has among its clients, investors who use the funds in their self-directed IRAs to invest in equity funding opportunities in early-stage companies. The SEC is now talking about making changes that could alter the crowdfunding and angel investing landscape.

Currently, the SEC requires that accredited investors have an individual income of at least $200,000 for the past two years ($300,000 household income) and a net worth of $1 million, excluding primary residence. There is no criterion set for an investor’s financial sophistication.

The SEC’s Investor Advisory Committee has approved several recommendations to the accredited investor definition; no changes or official rulings have taken place yet, but startup companies have concerns about their investor pools possibly shrinking. Among the criteria discussed by the Investor Advisory Committee was financial sophistication of the investor based on professional experience, education or credentials; other recommendations concern investors’ financial thresholds and alternative approaches to setting those thresholds.

“The SEC should take into account that many investors might not quite meet the financial benchmarks of an accredited investor, but may have tremendous financial knowledge and investment experience,” noted Jaime Raskulinecz, founder and CEO of Next Generation. She explained that some of her clients include equity funding in their self-directed retirement portfolios because they meet the SEC’s financial criteria. Angel investing, private placements and venture capital investments are among the many alternative assets allowed in self-directed retirement plans.

In self-direction, account holders make all their own investment decisions, usually based on investments they already know and understand, through which they may build more diverse and potentially more lucrative retirement portfolios. In addition to equity funding opportunities, self-directed retirement accounts may include many other nontraditional investments, such as real estate, commodities, hedge funds, unsecured loans and precious metals. As the third-party administrator, Next Generation provides comprehensive account administration, executes the transaction, and offers education and guidance to investors on the various options and benefits of self-direction as a retirement strategy.

“We hope the SEC will choose to open more doors to more investors, and help startup companies to attract the capital they need,” said Raskulinecz. “Many smart investors may fall slightly short of the financial minimums but have the business acumen or investing know-how to make smart investment decisions they are comfortable with, and that will help grow our economy in the long run.”

The discussion around accredited investors concerns the JOBS Act and the phasing in of its provisions; the final piece was meant to make it easier for people to invest in early stage companies. “When Title III of the JOBS Act is fully implemented, companies will be able to offer stock in exchange for capital to smaller investors,” said Raskulinecz. “Until that day arrives, no one knows what the final regulations will really be; we will continue to keep investors updated on our blog.”

To learn more about self-directed retirement plans, visit or contact Next Generation Trust Services at (888) 857-8058 or Info(at)NextGenerationTrust(dot)com. For more information about the possible SEC changes

About Next Generation Trust Services

Next Generation Trust Services (NGTS), headquartered in Roseland, New Jersey, is a professional third-party administrator of self-directed retirement plans. NGTS provides education, administrative support, and account maintenance to individuals interested in self-directing their retirement portfolios with a wide variety of investments that are not typically found in an IRA, such as real estate, precious metals, notes and mortgages, private placements, accounts receivables, limited partnerships, hedge funds, and much more. Next Generation Trust Services serves clients globally via its website, For more information on self-directing a retirement plan, call 973-533-1880, 888-857-8058, or e-mail Info(at)NextGenerationTrust(dot)com



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