The U.S. securities and Exchange Commission (SEC) recently expanded access to private funds, according to the organization’s website. In a post on X, Tony Robbins praised the expanded access to private funds for regular people. Robbins said access to distinctive alternative investments, which tend to have less connection to public market trends, is now more widely available. Thanks to recent SEC rule changes, investors of all income levels can take part in a broader range of private funds like this.
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In an InvestmentNews article, Christopher Zook, founder of CAZ Investments, shared a similar enthusiastic outlook about the SEC’s regulatory changes. Since investors won’t have to be accredited to invest in private funds, Zook said this will open the door for regular people to own some of the most “iconic” assets in the world.
When it comes to the new SEC update, GOBankingRates spoke with financial experts to determine it means for the average investor.
What the SEC Changes Mean for Regular Investors
“Tony is referring to the recent SEC rule changes on accredited investor requirements to invest in alternative assets,” said Kian Sarreshteh, co-founder and CEO of InvestiFi. “Historically, in order to legally have the ability to invest in closed-end funds, the SEC has required individuals to have a net worth of over $1 million (excluding your primary residence) or have annual income of $200,000 or combined household income of $300,000.”
The SEC recently loosened this requirement to allow regular individuals who aren’t high net worth to be able to invest in closed-end funds, such as Private Equity or Venture Capital.
Rebecca Kacaba, the co-founder and CEO of DealMaker, believes that this is a milestone in capital markets reform.
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“As someone who recently testified before Congress about modernizing capital markets, I see this as a clear step toward the future we outlined: broader participation in private markets through registered vehicles with clear disclosures,” she added.
She also stressed that by removing outdated restrictions, regulators are opening private markets to everyday investors, not just institutions and the ultra-wealthy. It signifies a recognition that retail investors deserve the same opportunity to diversify and participate in wealth creation.
“The largest endowments and family wealth have been using alternative investments for centuries,” explained Fred Hubler, founder of Creative Capital Wealth Management Group. “Private equity can have the same return profile with less risk than most public equity and the same can be said for quality private debt.”
The experts agreed that allowing more of the general public to benefit from investments that aren’t tied to the stock market can be a net positive in many cases.
Sarreshteh said historically, only the rich have had access to these alternative investments, so these changes bringing increased market access are a win for regular investors. The changes essentially unlock a historically gate-kept market.
Should You Invest in Private Funds?
With regular people gaining access to private funds, does it mean that one should change their investment approach? Let’s explore this below.
You Have More Options To Consider
Kacaba said for the average investor, this also means choice because, until now, most retirement accounts and brokerage portfolios have been limited to stocks, bonds and mutual funds. The new changes mean that investors can gain exposure to private-market strategies inside registered fund structures with oversight and disclosure.
“In practical terms, it puts alternatives within reach of everyday Americans, expanding both portfolio resilience and participation in an asset class that’s been growing faster than public markets,” she explained.
As a retail investor, you’ll have more choices than before, so you can decide how you want to allocate your funds.
The Quality of Accessible Private Funds Will Matter
Hubler noted that most alternative investments have some type of lock-up or windows of illiquidity. He also pointed out that many investments could have limited equity available, so not everyone can get in. However, the central aspect to look out for will be the quality of the alternative investments available to the public. If the public gains access to the leftovers and rejects of deals that high-net-worth clients didn’t want, there could be problems for retail investors. Only time will tell what kind of funds become available to regular investors.
You Should Proceed With Caution
Sarreshteh explained that these investments can outperform public markets, but they can also underperform depending on how you invest.
“People thinking about investing in these sorts of vehicles should do diligent research before making investments, given that many of these funds do not carry the same consumer protections that investing in public equities will afford you, such as Securities Investor Protection Corporation (SIPC) insurance,” he said.
Without financial education and an understanding of these investments, many regular investors may make poor decisions, depending on their risk tolerance or time horizon.
“Robbins’ post captures the spirit of this moment. Retail investors now have access to alternative funds once reserved for institutions and the ultra-wealthy, a shift that aligns with the broader trend of opening private markets to the public,” he added.
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This article originally appeared on GOBankingRates.com: Tony Robbins Praises Expanded Access to Private Funds: Should You Invest?
