U.S. Chamber of Commerce Center for Capital Markets Competitiveness Vice President Tom Quaadman said Tuesday a retail investor who uses a financial advisor shouldn’t automatically be allowed to an accredited investor.

He said that the Securities and Exchange Commission designation assumes the investor has the sophistication and financial ability to take on the risks of complex financial products -- which may not be true.

“We need to make it so unsophisticated investors are not harmed,” said Quaadman.

The chamber executive said allowing investors to participate in private funds just because they employ advisors is also a bad idea because it would increase liability for practitioners.

The proposal to spontaneously make advisor clients accredited is contained in a draft bill discussed Tuesday at the House Financial Services Capital Markets Subcommittee.

The bill’s sponsor, Arizona Republican David Schweikert, appeared to back down from the idea upon hearing Quaadman’s objections.

“Maybe that needs to be tightened up,” the representative said.

The subcommittee’s session was held amid a growing clamor in Congress, at the SEC and in the financial services industry to expand the number of investors eligible to put their money into private investment vehicles.