Recall that the Jumpstart Our Business Startups (JOBS) Act has forced the SEC to move toward lifting its ban on hedge fund advertising to the general public.
Toward that end, the SEC has collected public commentary that will inform its decision-making. Financial advisors generally are against the idea of allowing advertising to the public in the absence of safeguards that only accredited investors will be allowed in. As of now, the proposal "requires merely that issuers have a 'reasonable basis' for thinking that the people buying their investments are accredited," according to Investment News.
So it might make sense to consider stricter standards on accredited investors, as many unqualified investor just might find themselves the unwitting targets of lots of TV commercials and the like. It would indeed make sense to think about the whole ball of wax, not just one component. As the article points out, a related issue worth is the extent to which the current accredited standards make sense at all.
"Right now, it broadly defines such an investor as one with a net worth of at least million or an annual income of 0,000 — 0,000 for a couple — in each of the past two years. Observers have noted that these thresholds are hopelessly outdated and should be adjusted. Set in 1982, they have never been reset for inflation. Under the existing guidelines, many wage earners who would never describe themselves as wealthy or even well-off might qualify as accredited investors. Adjusted for inflation, the net-worth requirement today more likely would be about .25 million. The annual-income benchmark would be 0,000 for individuals and 4,000 for couples."
My sense is that while it makes sense to update the laws and while the ban on advertising looks like it will be lifted, the effects may be less than dramatic as few firms will likely go whole hog on mass advertising. The economics will not make sense. -Jim