The Equal Opportunity for All Investors Act of 2025

Expanded Access to Private Investments

The bill could unlock access to a wide range of private market investments that were historically available only to high-net-worth individuals and institutional players. This includes multifamily syndications, private lending funds, venture capital, and various types of private equity. These types of investments can offer attractive returns, tax advantages, and portfolio diversification that public markets often cannot match.

A New Path Beyond Stocks and Retirement Accounts

Most Americans build wealth through a relatively narrow set of tools: employer-sponsored retirement accounts, stock portfolios, or mutual funds. While those tools are important, they also have limitations. They tend to be market-correlated, offer limited tax advantages, and often lock up funds until retirement.

Private investments have long been a preferred strategy for wealthy families and institutions looking to generate passive income, preserve capital, and build generational wealth. Retail investors gaining access to these same tools may be able to pursue more personalized strategies for income generation, risk management, and long-term planning.

A Push Toward Financial Education

Unlike the current wealth-based system, the new model introduces an education requirement. At face value, this is a step in the right direction. By requiring investors to pass a test or complete an approved program, the bill encourages a more informed investor base. The proposed FINRA exam would cover core concepts such as securities structures, private fund operations, corporate governance, regulatory disclosure requirements, and risk analysis.

In an investing environment where too many individuals rely on advice from influencers or marketing-driven sources, the emphasis on education could be a valuable shift.

The Risks: What Retail Investors Need to Consider

The Cost of Losses is Not Equal

Access does not mean equality in outcomes. A high-net-worth investor losing $50,000 in a failed deal may recover quickly. For a retail investor, that same loss could have devastating consequences. Unlike public investments, which generally have more liquidity, regulatory oversight, and disclosure requirements, private investments can be opaque, illiquid, and difficult to exit. Even if an investor passes a literacy test, they may not fully grasp the real-world consequences of capital loss or misaligned sponsor incentives.

There is no substitute for experience and margin. This legislation, while well-intentioned, does not address the reality that the downside of private investments is often felt most severely by those with the least capacity to absorb loss. 

A Surge in First-Time LPs Could Attract Predatory GPs

Whenever a new pool of inexperienced capital enters a space, opportunistic sponsors are likely to follow. If retail investors flood into private markets after passing a basic exam, many will become easy targets for sponsors who are unqualified, inexperienced, or simply unethical.

Without a simultaneous effort to strengthen sponsor regulation or improve deal transparency, we risk creating a marketplace where new investors are disproportionately exposed to higher fees, questionable underwriting, or misaligned incentives.

It is worth noting that the bill does not require increased scrutiny or certification for General Partners (GPs). So while the Limited Partners (LPs) will now need to prove themselves through testing or coursework, the people managing their money may still operate without any formal credentialing beyond SEC filing requirements.

An Inconsistent Standard of Protection

One of the most glaring contradictions in the bill is that wealthy investors can still participate in private deals without taking any test or demonstrating any financial literacy. This creates a paradox. If the stated goal is to protect investors, why not apply a consistent standard across the board?

By placing the educational burden only on those who lack a high net worth, the system still implicitly equates wealth with sophistication. That assumption is flawed. Many accredited investors may be financially successful but lack the experience, discipline, or knowledge to make well-informed decisions in complex investment structures. If education matters, it should matter for everyone.

Broader Market Implications

The legislation comes at a time when private markets are already seeing increased interest from individual investors. Analysts estimate that, if enacted, this reform could bring as much as $5 trillion in new retail capital into private markets by 2026. Some of that capital is expected to flow through 401(k) platforms and other retirement structures.

While this could democratize access and encourage innovation, it also places enormous pressure on regulators, fund managers, and platforms to maintain transparency and accountability. Valuation challenges, redemption limits, and liquidity constraints are already prevalent in private funds. An influx of new investors could strain these systems further, especially during periods of market stress.

What This Means for Passive Investors in Real Estate

If you are a passive investor considering this new pathway, here are a few key things to keep in mind:

• Passing a test is only the beginning. Knowing how to evaluate deal structure, operator track record, and risk-adjusted returns is critical. Education must go beyond definitions and into real-world application.
• Not all sponsors are created equal. Vetting your GP is more important than ever. Transparency, reporting practices, investor communication, and alignment of interests should be non-negotiables.
• Be realistic about your own risk tolerance. Private deals often involve long hold periods and uncertain liquidity. If you need access to your capital in the short term, this may not be the right fit.
• Do not let “access” rush your decision-making. Just because a door is open does not mean you need to walk through it. Quality matters more than novelty.

Final Thoughts

The Equal Opportunity for All Investors Act could represent a meaningful evolution in how investors are allowed to participate in private markets. It recognizes that wealth is not the only indicator of readiness. But it also risks creating an environment where access outpaces protection.
If this bill passes into law, it will be up to individual investors to be more discerning, more cautious, and more informed than ever before. And it will be up to firms and sponsors across the industry to rise to the occasion by building trust through transparency, not just opportunity.
Let access be a starting point, not a substitute for good judgment.

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About Ellie Perlman