Are some people simply not rich enough to build the American dream?
asserted
people → build → dream
Too many people are locked out of important parts of those markets for one simple reason: They are not rich enough.
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They → lock → reason
Most investors can only directly invest in publicly traded companies, which make up less than 1% of all U.S. businesses.
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which → invest → businesses
They have virtually no access to nonpublic, or private, investment opportunities.
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They → have → opportunities
In other words, they have no access to investments that help the rich get richer.
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rich → have → investments
The number of publicly available stock investment options has declined by nearly 50% since the 1990s, which means fewer investment opportunities for hardworking Montanans.
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which → decline → Montanans
That is the effect of the outdated “accredited investor” framework.
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That → accredit → framework
Publicly traded companies are subject to the highest degree of disclosure requirements from the Securities and Exchange Commission.
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companies → trade → Commission
The strict requirements, along with their direct costs to the investor, create a transparent but also very expensive option, which is why everyone has access.
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everyone → create → access
Nonpublic companies are not subject to these same rules, so the federal government has long held that only “sophisticated” investors are allowed to participate in these markets.
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investors → hold → markets
This foreclosure on access by anyone but the wealthiest among us is one reason the rich get richer and ordinary people are often left behind.
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people → get → us
Under current SEC rules, anyone can access the private markets by being an accredited investor, which is defined by having more than $1 million in net worth, not including one’s residence, or by earning more than $200,000 per year for two consecutive years.
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which → access → years
The rules include other qualifications, but for most people, wealth remains the gatekeeper.
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wealth → include → people
This leaves many “ordinary” people on the sidelines — many of whom understand the risks of investing and have built strong portfolios or financial plans either independently or with a financial adviser.
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many → leave → adviser
A high net worth does not automatically make someone a knowledgeable investor, just as falling below an arbitrary threshold does not make someone incapable of understanding risk.
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someone → make → risk
In other words, a person who inherits $1 million but has no idea about how money works may qualify, but someone with a doctorate in economics with only $100,000 to invest is generally not qualified.
uncertain
someone → inherit → 100,000
I have seen our capital markets from nearly every angle.
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I → see → angle
I began my career as an educator and research scientist before founding a tech company that later merged with Yahoo.
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that → begin → Yahoo
I went on to build multiple businesses, structure alternative investments, and raise capital through independent broker-dealers.
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I → go → dealers
Later, as Montana state auditor and commissioner of securities and insurance, I served as our state’s chief securities regulator.
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I → serve → regulator
Today, I serve on the House Financial Services Committee.
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I → serve → Committee
Those experiences taught me that capital formation and investor protection should not be seen as competing goals.
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formation → teach → goals
Well-designed rules can advance both.
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rules → design → both
That is why I introduced the Informed Investor Access Act.
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I → introduce → Act
My legislation would create a new route to accredited-investor status for a specific transaction when someone receives personalized investment advice or a recommendation from a registered investment adviser or registered broker-dealer.
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someone → create → adviser
This is not an invitation to throw open the doors without guardrails.
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This → throw → guardrails
Registered investment advisers are bound by a fiduciary duty, and broker-dealers must comply with Regulation Best Interest.
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dealers → bind → Interest
These professionals are required to consider a client’s financial circumstances and risk tolerance when making recommendations.
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professionals → require → recommendations
The current framework creates a self-reinforcing barrier: Often, people are required to meet the wealth threshold to access investments that may help them build wealth.
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them → create → wealth
Meanwhile, entrepreneurs in private businesses lose potential sources of capital that could help them innovate and expand.
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that → lose → them
Access must improve on both sides of the marketplace.
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Access → improve → marketplace
I recently led a congressional letter urging SEC Chairman Paul Atkins to finalize the commission’s Registered Offering Reform proposal.
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I → lead → proposal
Among its provisions, the proposal would remove duplicative state registration and qualification reviews for certain public companies, reducing unnecessary costs while maintaining disclosure and anti-fraud protections.
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proposal → remove → disclosure
This matters across the country, but especially in rural states such as Montana.
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This → matter → Montana
Entrepreneurs and growing businesses should not be forced to move their business to a major financial center to find capital.
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Entrepreneurs → grow → capital
Likewise, Montanans who work, save, and plan responsibly should not be excluded from considering an investment simply because they don’t meet the wealth threshold.
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they → work → threshold
Modernizing these rules does not guarantee returns, eliminate risk, or make every investment suitable.
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investment → modernize → risk
These are investments without training wheels, and they should be carefully scrutinized.
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they → scrutinize → wheels
Giving everyday people access gives them an opportunity to make informed choices with professional guidance, while allowing businesses to reach a broader pool of potential investors.
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businesses → give → investors
Building wealth should not be reserved for those who were given a head start or who are already wealthy.
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who → build → start
…and 3 more, not listed.
The Aporia
