There are 4 different Investor account types on Equivesto, each with their own requirements as associated Investment Limits.
1) Retail Investor
Anyone over the age of 18 with either Canadian citizenship or Permanent Resident Status could be categorized as a Retail Investor. In the finance world, the word retail is added to investor to refer to the general public. Any client who is legally able to invest but does not qualify as an accredited investor, permitted client, or an eligible investor is a retail investor.
2) Eligible Investor
An eligible investor includes but is not limited to either:
1. A person whose net assets, alone or with a spouse, exceed $400,000. (Click here for help calculating your net worth)
2. A person whose income before taxes exceeded $75,000 in each of the 2 most recent calendar years and in the current year as well.
3. A person with a spouse, whose combined income before taxes as a couple, exceeded $125,000 in each of the 2 most recent calendar years and in the current year as well.
4. A partnership of which all partners are eligible investors, or accredited investors.
3) Accredited Investor (AI)
This type of investor includes large financial institutions, government agencies, angel groups, charities, family trusts as well as certain individuals. High net worth individuals make up the majority of Accredited investors. We have further defined Accredited Investor below as either an individual AI or a non-individual AI.
Individual AI
A wealthy person who passes a financial asset test. A summarized version of the test is that the individual needs either:
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A minimum of $1,000,000 in net assets either alone or with a spouse (excluding their primary residence and other liabilities). Click here for help calculating your net worth.
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In the current year and each of the last two years had an income over CAD $200,000 alone, or CAD $300,000 when combined with a spouse.
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A minimum of $5,000,000 in assets either alone or with a spouse.
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Be an individual registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer which qualifies them as an individual AI.
Non-individual AI
A corporation who is regulated by either a federal/provincial/municipal government, a federal act, an SRA (Securities Regulatory Authority), or another regulatory entity. Other legal entities that are an AI are: investment funds, angel or Venture Capital groups or a family trust set up by an AI where most of the beneficiaries are AI as well.
Am I responsible for identifying as an AI?
Yes, but don’t worry, Equivesto verifies whether an investor is accredited or not. We keep all verification records which you can access for your reference.
4) Permitted Client
Permitted clients are usually corporations who are regulated by either a federal/provincial/municipal government, a federal act, an SRA or another regulatory entity. Other legal entities that can be a permitted client are investment funds or angel or VC groups comprised of permitted clients.
An individual can be a permitted client if they have a minimum of CAD $5,000,000 in net assets (excluding liabilities). Click here for a free net worth calculator.
Investors can choose a lower profile in the hierarchy, as all investor types except Retail Investor requires additional documentation as proof of investor status. To save time and effort some investors may chose to be a Retail Investor. You can always apply for a higher status if you want larger limits or your circumstances change.