How would a client with a net worth of $1,925,000, including a primary residence valued at $775,000, and an income of $180,000 last year, be classified?

A client is classified as an accredited investor based on specific financial criteria set by the Securities and Exchange Commission (SEC). To qualify as an accredited investor, an individual must have a net worth exceeding $1 million, excluding the value of their primary residence, or have an income of at least $200,000 in each of the last two years (or $300,000 combined income with a spouse).

In the case presented, while the client has a net worth of $1,925,000 and an income of $180,000, the crucial detail is that in determining net worth for accreditation purposes, the value of the primary residence (which is $775,000) is excluded. Therefore, the net worth without the primary residence is approximately $1,150,000. Although this amount exceeds the $1 million threshold, the income does not meet the minimum requirement for the accredited investor status since it falls short of the $200,000 threshold.

Thus, considering the net worth of nearly $1.15 million and the income level, the determination leads to classifying the client as not meeting the criteria of an accredited investor. Therefore, the accurate classification would reflect that the client does not possess the requisite financial qualifications to be categorized as an accredited