Who counts as a high-net-worth or sophisticated investor?
By SuLe · Updated 24 May 2026
They are categories of investor that the Financial Promotion Order 2005 lets you promote a raise to without an authorised firm's approval — provided each person signs the prescribed statement first. A high-net-worth individual meets an income or net-assets threshold; a sophisticated investor meets experience-based criteria or holds an authorised firm's certificate. The thresholds changed in 2024, so confirm the current figures before you rely on them.
Key facts
- The high-net-worth and sophisticated-investor exemptions sit in the Financial Promotion Order 2005 and are the routes most founder raises use.
- As of mid-2026 the certified high-net-worth test broadly requires income of at least £100,000 in the last financial year, or net assets of at least £250,000 excluding main home and pension — figures that were changed in 2024, so verify them.
- The investor must sign the prescribed statement before you promote to them, and it must be current (broadly, within the last 12 months).
- Self-certified sophisticated criteria include angel-network membership, recent unlisted-company investments, private-equity experience or directing a company above a turnover threshold — confirm the current wording.
- Certification does not remove the need for risk warnings, record-keeping, or advice — and it never makes a promotion to the general public lawful.
What is a certified high-net-worth investor?
It is an individual who signs the FPO's prescribed high-net-worth statement confirming they meet an income or net-assets test. That signed statement is what lets you promote your raise to them under the exemption.
As of mid-2026, the test broadly asks for income of at least £100,000 in the last financial year, or net assets of at least £250,000 excluding the person's main home and pension. These thresholds were briefly raised and then restored during 2024, so treat the figures as volatile and check the current version on legislation.gov.uk before you rely on them.
Net assets exclude your main residence and pension rights precisely so the test captures genuine investable wealth, not paper value locked in a home.
What is a sophisticated investor?
There are two flavours. A certified sophisticated investor holds a certificate from an FCA-authorised firm confirming they are knowledgeable enough to understand the risks. A self-certified sophisticated investor signs their own statement confirming they meet prescribed criteria.
The self-certified criteria are experience-based — for example being a member of a recognised angel network for a qualifying period, having made a couple of investments in unlisted companies in the last two years, having worked in private equity, or being a director of a company above a turnover threshold. The exact criteria, including the turnover figure, have been updated, so confirm the current wording rather than working from memory.
Both routes require a current signed statement and the required risk warnings; neither is a licence to promote to the public.
How do I collect and use these statements correctly?
Collect the signed statement before you communicate the promotion to that person — not once they express interest. A statement obtained afterwards does not cure a promotion that was unlawful when it was sent.
Keep every certificate on file, make sure it is current (broadly within the last 12 months for the investor statements), and include the required risk warnings in the promotion itself. "They told me they were an angel" is not a defence if you cannot produce the paperwork.
Because the categories are technical and the consequences of misclassifying someone are criminal, founders normally have a solicitor confirm which exemption applies and check the statements before the deck goes out.
| Route | Broad basis (verify current wording) | What you must hold |
|---|---|---|
| Certified high net worth | Income ≥ £100,000 last year, or net assets ≥ £250,000 (excl. home + pension) — 2024 figures, confirm | Investor's signed HNW statement, current, on file before promoting |
| Certified sophisticated | Certificate from an FCA-authorised firm that the investor is knowledgeable | Authorised firm's certificate + investor statement |
| Self-certified sophisticated | Angel-network member, recent unlisted investments, PE experience, or director of a company above a turnover threshold | Investor's signed self-certification, current, on file before promoting |
Worked example
Aisha is raising £350,000 for a healthtech startup and has five interested angels. Before sending anything, she works out which exemption covers each one.
Two sign the certified high-net-worth statement, confirming (as of the current thresholds she checks on legislation.gov.uk) income above £100,000. Two sign the self-certified sophisticated statement — both are long-standing members of an angel network with recent unlisted investments. One cannot evidence any category, so Aisha does not send that person the offer.
She keeps all four signed statements on file, dated before she shared the deck, and includes the required risk warnings. Her solicitor reviews the categorisation first, because a single misclassification would expose her to a criminal breach of section 21.
Where founders go wrong
Relying on out-of-date thresholds
— the high-net-worth and self-certified criteria changed in 2024; using an old figure can wrongly qualify someone.Collecting the statement after pitching
— the certificate must pre-date the promotion to that person, or the exemption does not apply.Skipping the risk warnings
— certification does not switch off the requirement to warn, or your duty not to mislead.Treating self-certification as the founder's word
— the investor signs against prescribed criteria; you cannot simply label someone sophisticated yourself.
Related questions
What income makes someone high net worth?
As of mid-2026, the certified high-net-worth route broadly requires income of at least £100,000 in the last financial year, or net assets of at least £250,000 excluding main home and pension. These thresholds were changed in 2024, so confirm the current figures on legislation.gov.uk before relying on them.
What is a self-certified sophisticated investor?
Someone who signs a statement confirming they meet set criteria — for example being a member of an angel network for a qualifying period, having made a couple of unlisted-company investments recently, working in private equity, or directing a company above a turnover threshold. The exact criteria are prescribed and have been updated, so verify them.
Can I just ask investors to confirm they qualify?
No. The investor must sign the specific prescribed statement, and you must collect it before you make the promotion to them. "They told me they were an angel" is not a defence, and getting the statement afterwards does not cure a promotion that was unlawful when sent.
Does certification remove all my obligations?
No. Even for certified investors the promotion must carry the required risk warnings and you must keep records. The exemption addresses section 21; it does not switch off your duty not to mislead, and it does not make an offer to the general public lawful.
Who certifies a "certified sophisticated investor"?
Under the FPO, a certified sophisticated investor holds a certificate from an FCA-authorised firm confirming they are sufficiently knowledgeable. That is different from the self-certified route, where the investor signs their own statement against prescribed criteria. Both must be current and on file before you promote. [More: Can anyone invest in my startup, or are there investor eligibility rules?]
The exemption categories look like a form-filling exercise, but they turn on thresholds that moved in 2024 and criteria that must be met and evidenced before you pitch — and a mistake is a criminal exposure under section 21. A SuLe solicitor can confirm which exemption each investor fits and check your statements. Book a free call before you promote your raise and get the categorisation right first time.
Keep reading: What is a financial promotion and when do the rules apply to founders? · Can anyone invest in my startup, or are there investor eligibility rules? · Can I publicly advertise that my startup is raising money? · How does equity crowdfunding work legally in the UK? · Do angel syndicates need FCA authorisation?
Primary sources: Financial Promotion Order 2005 · Financial Services and Markets Act 2000, section 21 · FCA — Financial promotions and adverts
