How to become an accredited investor in Singapore: A comprehensive guide

This comprehensive guide provides the how and why to attain accredited investor status in Singapore – from defining accredited investors in Singapore to exploring the qualification thresholds, verification processes, and potential benefits and key considerations. 

The definition of accredited investors in Singapore

In Singapore, an accredited investor (AI) is an individual or entity that meets specific financial criteria set by the Monetary Authority of Singapore (MAS). To qualify as an AI, you must fulfil at least one of these requirements:

• Net personal assets exceeding S$2 million (or equivalent in foreign currency), with a maximum of S$1 million from your primary residence
• Net financial assets* exceeding S$1 million (or equivalent in foreign currency)
• Annual income of at least S$300,000 (or equivalent) in the preceding 12 months
• Hold a joint account with an Accredited Investor, in respect of dealings through that joint account

If you fulfil at least one of these three conditions, you may choose to be deemed as either an accredited investor or a retail investor. 

The Monetary Authority of Singapore introduced the opt-in regime in 2019, so investors must specifically consent if they want to be regarded as accredited. A person who has chosen to be treated as an AI can withdraw their consent at any time, by giving written notice, if they change their mind.

Certain entities, such as corporations with net assets exceeding S$10 million, also qualify as AIs. 

What can Singapore accredited investors invest in?

Most individual investors are restricted from accessing some types of investments that are exempt from certain regulatory requirements. This is to protect retail, or non-professional, investors from the risks associated with products such as private equity, infrastructure, and hedge funds. The idea is that the average individual may lack the experience or capital to fully understand and handle the risks involved.

Accredited investors (AIs) have been assessed to have the financial means and the know-how. These affluent individuals are therefore able to access a wider suite of financial products and services. Regulators in different countries have their own definitions of AIs and qualifying criteria, which often include income, professional experience, and net worth requirements. 

You may be wondering whether it’s worth opting in for the AI status, and whether it will be suitable for you.

Many investment products are only available to accredited investors. These include certain private credit strategies, structured notes, and liquid alternative funds. 

Access to a wider variety of investments can help build a better-diversified portfolio and potentially achieve greater returns. The three main reasons investors might consider investing in alternatives are to improve returns, lower volatility and correlation, and get access to further diversification.

Read more: How alternative investments can fit into your portfolio

What are the key considerations before opting in as an accredited investor?

Investment opportunities and risk

All investors should give careful thought to all investment opportunities. Keep in mind that all investments carry a certain level of risk, regardless of an individual's net worth. Notably, AI-only products typically have less regulatory oversight and require a larger upfront financial commitment.

Read more: What are evergreen funds?

The expectation of knowledge

Being treated as an AI means that you are expected to have more knowledge, and are able to understand and manage the risks of the financial products you choose to invest in. Accredited investors are assumed to be better informed and better able to access resources to protect their own interests, and therefore require less regulatory protection. 

Forgoing certain regulatory safeguards

Investors who agree to be treated as AIs thus forgo the benefit of certain regulatory safeguards. For example, issuers of securities are exempted from the obligation to issue a full prospectus registered with MAS for offers exclusively made to AIs. Intermediaries are also exempted from various business conduct requirements when dealing with AI clients. 

If investors are unsure about the implications of being treated as an AI, they should consult a professional advisor.

How do you verify your accredited investor status?

To verify your accredited investor status in Singapore, you will need to provide documentation proving you meet the criteria. 

Provide documentation

Once you have confirmed your eligibility, you can proceed with the certification process. This typically involves submitting various financial documents as proof, such as:

• Bank or financial asset statements
• Proof of income (e.g., payslips, tax returns)
• Statements of CPF or pension fund, or life insurance policy
• Property valuations, if applicable

Singapore residents, including all SingPass holders, can easily become accredited investors with Endowus without the need for documentation. During the onboarding process, your income information can be automatically retrieved from SingPass MyInfo. However, this convenience is not available for eligible clients seeking to verify their status as an AI based on their net worth.

Verification process

Investment platforms or banks that you choose with invest with will review your submitted documents to confirm your eligibility. In some cases, additional verification steps may be required, such as a face-to-face interview or a declaration of your financial situation. Typically, the verification process is completed within a few business days.

Maintaining accredited investor status

Your accredited investor status is typically valid for a specific period, often one year. To maintain this status, you’ll need to undergo an annual review process, submitting updated financial documentation to demonstrate continued eligibility.

Opt-in as an accredited investor with Endowus Private Wealth

With Endowus Private Wealth, clients looking to invest a minimum of S$1 million in assets across our services can gain exclusive access to more personalised solutions and products.

While alternatives are still not widely available for individual investors due to lack of access, large minimum investment hurdles, and high cost, Endowus Private Wealth has been expanding its alternatives offering to offer high-quality products in each sub-segment. Let us introduce you to a better way to manage your wealth. For more information or to explore the exclusive investment options available to AIs, contact us for a consultation.

Before you opt in to become an accredited investor, refer to this notice on Endowus. To apply to become an AI, you may complete the accredited investor opt-in form accompanied by the relevant supporting documents. Once processed and verified, your investor status will be changed to reflect your AI status.

Frequently asked questions about becoming an accredited investor in Singapore

Can foreign residents become accredited investors in Singapore?

Yes, foreign residents can become accredited investors in Singapore if they meet the financial criteria set by the Monetary Authority of Singapore. These include having net personal assets exceeding S$2 million or an annual income of at least S$300,000.

How often does one need to re-verify accredited investor status?

The frequency of re-verification varies by investment platform and financial institution. Generally, you should inform Endowus of any changes in your financial situation that may affect your accredited investor status.

Are there specific investment products only available to accredited investors?

Accredited investors have access to a wider range of sophisticated investments, including hedge funds, private credit funds, and certain alternative investments not typically available to retail investors. However, this comes with fewer regulatory safeguards, so careful consideration is advised.