When it comes down to investing, whether it’s in stocks, bonds, or annuities it’s important to know what kind of category you fall into as an investor. This post aims to clarify the differences between these categories and help provide a better understanding of the jargon surrounding what is a complex and delicate area of expertise.
For those who are new to the investment arena, distinguishing between Sophisticated Investors and High-Net-Worth Individuals can become confusing and it can become difficult to know which category you fall into, if any.
As you would expect, there are requirements that need to be met in order to tell the experienced investors from the less experienced. In order to be recognised as a Sophisticated Investor you must qualify for at least one of the following criteria as listed below:
(Source: The UK Financial Services Conduct of Business Sourcebook)
Surprisingly, unlike Sophisticated Investors, there is no specific criterion that needs to be met to be considered as a HNWI. Instead, investors are mediated on the amount of liquid assets they have under management.
A High-Net Worth Individual is expected to have a minimum of $1 million of liquid financial assets. If an investor has less than $1 million, but more than $100,000, they are considered to be a member of the “affluent” or perhaps even “sub-HNWI”.
There are two methods you can use when investing:
If you can satisfy at least one of the above criteria and acknowledge, in writing, an understanding of the requirements for being treated as a High-Net-Worth Individual or Sophisticated Investor, then you are able to declare yourself a member of either category.
Alternatively, you could use a financial adviser. More experienced investors would likely already employ an adviser, who would be able to sign them off as either a Sophisticated Investor or High-Net-Worth Individual depending on their circumstance. However, to avoid any unnecessary risk of mis-selling, the advising company would ensure thorough checks are carried out and that the correct due diligence is performed before any advice is given; which could be a lengthy process.
No matter which type of investor you are, you qualify for the opportunity to invest in one of the property sector’s most dynamic investment programs with us here at Imperial Corporate Capital PLC. To find out more, email firstname.lastname@example.org or call 0203 519 2803 to speak to a member of our team who can expand on the Imperial Corporate Capital project portfolio and the opportunities they can provide to investors.