DFPG Investments, LLC (“DFPG”) has commenced doing business under the name of Diversify Advisory Services (“Diversify”) and is
a United States Securities and Exchange Commission (“SEC”) registered investment adviser. Diversify is wholly owned by Falcon
Park Capital which is owned by Michael Bendix, Ryan Smith and Daniel Luke. Diversify is headquartered in Sandy, Utah and began
operations in January 2015 under the name DFPG. Mr. Luke and Mr. Smith are also part owners in a joint venture with a non-
affiliated registered investment adviser, Wade Read Capital, LLC.
Diversify strives to provide personal attention and professional service to all Clients, incorporating an honest, diligent, and ethical
approach. Diversify also strives to maintain a level of integrity that puts its clients’ needs ahead of its own. Diversify will provide
investment advisory services to Clients through individual accounts, joint accounts, IRA's, trusts, employee benefit plans, and other
types of legal entities. Diversify provides investment advice primarily in mutual funds, equities, bond funds, real estate securities,
private equity, structured notes, and ETFs, but is certainly capable of providing advice on a host of other investment types as well.
As of December 31, 2022, Diversify had total assets under management of approximately $2,009,732,000, for which Diversify had
discretionary authority over approximately $ 2,006,030,000.
Advisory Services
FINANCIAL PLANNING AND CONSULTING SERVICES
Diversify offers financial planning and consulting services by Client request. Financial planning is the process of meeting life goals
through the proper management of your finances. These life goals can include buying a first or second home, saving for your
children’s education, accumulating wealth in your investment portfolio, or planning for retirement. Financial planning and the
related analysis is a multi-step process that provides you with two important things: An in-depth review of your current financial
situation and a blueprint that shows you how to potentially achieve your goals and objectives for the future. You will engage
Diversify through a separate planning and consulting engagement agreement that outlines the services to be provided.
As part of the financial planning process, generally we make recommendations to take certain actions. If you decide to follow the
recommendations provided, you have the option, but are under no obligation, to request that Diversify implement such
recommendations through the Firm’s Investment Management Services. Should you request that we implement the
recommendations, you will engage us separately and receive the services as outlined below under Portfolio/Investment
Management Services. Furthermore, certain IARs of Diversify sell brokerage and insurance products when you and your advisor
believe it to be in your best interest. Insurance products are sold by IARs in their separate capacity as an independent insurance
agent with appointed carriers not affiliated with Diversify. Brokerage products are sold by IARs in their separate capacity as a
registered representative of DFPG Investments. If the IAR implements insurance or brokerage transactions in this separate capacity,
he/she earns a sales commission but does not also charge investment management fees on those investments. This could present
a conflict of interest since the IAR is incentivized and earns compensation and/or commission(s) for implementing insurance and
brokerage product recommendations made as part of the Firm’s Financial Planning Services. This conflict is mitigated by the IAR’s
commitment and obligation to act in your best interest. Please see items 5, 10, and 14 below for additional information regarding
such conflicts.
Diversify’s consulting services include general investment and product-based education. This service also includes investment
guidance as it relates to various securities and their specific features and risks.
MULTI FAMILY OFFICE SERVICES
Diversify offers Family Office services described below to certain qualified clients. In certain cases, and for some services not
provided directly by Diversify, we will facilitate introductions and coordinate with those third parties as requested by the client,
including but not limited to tax advisors, estate planning and bill pay providers. Clients will engage these third parties under a
separate engagement agreement for services and the third parties may charge additional fees that are separate from the fees paid
to Diversify. We reserve the right to change or discontinue offering these services at any time. Family Office services generally are
offered to Clients that ultra-high net worth clients with unique and complex needs requiring additional services related to their
financial well-being.
In order to provide these services, information is gathered through in-depth personal interviews designed to elicit the Client’s current
financial status, family obligations, future goals, and attitudes toward risk. Related documents supplied by the client are carefully
reviewed. The IAR will then help the Client set realistic goals, identify key financial issues concerning those goals and prepare a list
of recommendations and alternative strategies for achieving those goals. Each strategy will be recommended in the context of other
strategies, with the goal of achieving optimum overall results. Implementation of the IAR’s recommendations and alternative
strategies may be accomplished as part of our Investment Management Services and are available in a separate agreement.
Family Office Services can include any or all of the following:
Family Governance: Assist with the establishment of a family office constitution and family office council. Help establish
protocols and workflows. Provide advice and training for family members and family office staff.
Charity & Philanthropy: Perform an analysis and provide advice on various alternative structures for planned giving
strategies. Assist with the formation of a charitable foundation if this is the optimal vehicle for the client.
Tax Preparation & Tax Planning: Either conduct the tax preparation or coordinate with the Client’s accountant. Advise on tax
efficiency strategies such as changing tax jurisdiction by relocating internationally, cost segregation, and utilizing captive
insurance, among others.
Trust & Corporate Services: Advisor will advise on various trust structures, coordinate trust administration, and provide advice
and support for closely held businesses. These services include business continuity and succession planning as well as
corporate risk management.
Wealth Planning: Advisor will coordinate with the Client’s estate attorney and insurance agents to optimize strategies and
provide holistic oversight. Investment advice and/or management would be engaged separately should the Client decide
to work with Diversify.
Collaboration with Other Advisors: Collaborate with current advisors and provide referrals for additional advisors if/when
needed to assist with the delivery of services within the scope of this project.
Clients are advised that it remains their responsibility to promptly notify Diversify or their IAR of any change in their financial situation
or investment objectives for the purpose of reviewing, evaluating, or revising our recommendations and/or services. Family Office
clients can engage Diversify as a fixed fee based on project or pay an annual fee for services.
PORTFOLIO/INVESTMENT MANAGEMENT SERVICES
Diversify offers portfolio/investment management services on both a discretionary and non-discretionary basis as granted by
the Client in the Investment Management Agreement (“IMA”). Clients selecting discretionary services will grant Diversify the authority
to purchase and sell securities and other investment instruments in the account, while implementing asset allocations strategies
and product strategies that are aligned with the individual or entity’s investment profile. Diversify will also have the authority to
retain third parties or sub-advisors, which may include affiliates of Diversify, to perform any of the duties or obligations of
Diversify under the Investment Management Agreement. Clients selecting non-discretionary portfolio/investment management
dictate that Diversify’s recommendations and investment decisions must be preceded by approval from the Client.
Diversify offers customized portfolio/investment management to individuals, families, trusts, institutions as well as other legal
registration types. Investment portfolios are developed to meet the Client’s objectives and risk requirements, which includes time
horizon, tax implications, and liquidity needs, which are determined in advance with the Client. Every investment portfolio is
designed and structured with the goal to meet both the short- and long-term financial objectives of the Client. Diversify believes
i n a disciplined approach incorporating time-h on or e d principles of investing: diversification, asset allocation, quality, and
patience in assisting Clients in potentially achieving their long-t e r m investment goals.
Diversify offers its portfolio/investment management services through several platforms and strategies, which are more fully
described below.
Advisor Managed Solutions (“AMS”) and AMS Plus (“AMS+”) Platforms
The AMS Platform offers the investment adviser representative (“IAR”) full or limited trading authority to manage the assets and
allocations in Client’s account(s). The IAR acts as the direct manager and does not employ the use of third-party managers. For the
IAR to manage the account(s) appropriately, Diversify requires that the Client complete a Investment Management Agreement and
Investment Policy Statement. These documents will be used to collect the Client’s basic financial information, risk tolerance, time
horizon, and other facts that will be used to guide the decisions the IAR makes in managing the accounts. To obtain full trading
authority, the IAR must obtain the Client’s consent on the Diversify Investment Management Agreement.
Like the standard AMS Platforms, the AMS+ Platform offers the IAR full or limited trading authority to manage the assets and
allocations in Client’s account(s); however, the AMS+ platform is distinct from the standard AMS platform in that it is a Wrap Fee
Program in which the Client pays one total fee, as a percentage of the value of assets in the account, which covers items that might
otherwise be charged separately such as brokerage commissions or individual ticket charges, custody fees, etc. More information
on this program can be found in Diversify’s Wrap Fee Program Brochure.
The AMS and AMS+ Platforms also offer the IAR the ability to execute investments, on a non-discretionary basis, into one or more
illiquid alternative investments within Client’s account(s). An alternative investment is generally defined as an asset that is not one
of the conventional investment types, such as stocks, bonds, mutual funds, or cash. Alternative investment asset classes may
include, but are not limited to, real estate, debt funds, private equity, commodities, hedge funds, venture capital, etc. and typically
have minimum net worth and/or income requirements that must be met. Alternative investments are designed to assist investors
in creating a diversified portfolio and may provide unique advantages; however, they are complex in nature and involve a high
degree of risk. For the IAR to manage the account(s) appropriately, Diversify requires that the Client complete each alternative
investment sponsor’s subscription documents, as well as the Diversify Investment Management Agreement and Investment Policy
Statement Investment Representations and Agreement Form, and investment specific documentation. These documents will be
used to collect the Client’s basic financial information, risk tolerance, liquidity needs, time horizon, and other facts that will be used
to guide the decisions the IAR makes in determining if an alternative investment is appropriate within a Client’s account(s).
Wealth Accumulator Strategy – American Funds Direct
Similar to the AMS and AMS+, Wealth Accumulator strategy offers clients in the wealth building stage of their life access to advisory
services and portfolio management services. Advisors will work with clients to set goals, develop a disciplined strategy, set a time
horizon and monitor the progress. The IAR acts as the direct manager and does not employ the use of third-party managers. For
the IAR to manage the account(s) appropriately, Diversify requires the client sign an Investment Management Agreement and
provide details regarding their personal financial situation. Portfolios will be invested in low cost, mutual funds directly with
American Funds’ F2 shares that correlate to the individual clients’ goals and objectives. F2 shares have low expense ratios and lower
account minimums allowing wealth accumulators to begin their journey to financial independence.
American Funds has designed this share class for investors who choose to compensate their financial professionals based on the
total assets in their portfolio, rather than via commissions or sales charges. Shares in this class do not have upfront or a contingent
deferred sales charges and do not carry a 12b-1 fee. Clients in this program should consult the fund’s prospectus to have a better
understanding of the costs and expenses of the specific mutual fund, including the expenses of the F-2 share class.
Assets will be held at a qualified, Diversify-approved custodian. To implement an AMS Platform account, Diversify and/or the IAR
may utilize third-party technology solutions to provide services such as consolidated billing and reporting, or trade management.
Outside Managed Solutions (“OMS”) Platform
The OMS platform allows the IAR to utilize third-party managers or subadvisors, which are referred to as “outside managers.”
Diversify will conduct due diligence on any potential outside managers prior to engagement. Those outside managers who are
approved will also be subject to ongoing due diligence. The assets in the account(s) will be held by a qualified, Diversify-approved
custodian, other than RBC.
The Client and IAR will work together to select one or multiple managers’ strategies in an effort to achieve the Client’s financial goals.
To accomplish this, the IAR will be required to obtain from the Client an Investment Management Agreement and Investment Policy
Statement. The Adviser has authority to establish, modify, or terminate relationships with third parties, which may include affiliates
of the Adviser, third-party managers, or subadvisors as appropriate.
To implement an OMS Platform account, Diversify and/or the IAR may utilize third-party technology solutions to provide services
such as reporting.
Diversify Managed Solutions (“DMS”) Platform
The DMS platform allows the IAR to select from Diversify-curated third-party managers and/or Diversify-designed models that can
incorporate third-party managers, in multi-asset class strategies. Diversify will conduct due diligence on any potential outside
managers prior to engagement. Those outside managers will also be subject to ongoing due diligence. In addition, Diversify will
conduct ongoing analysis of the allocation of the various managers and assets in its own designed models, making occasional
adjustments to the managers and allocations as it deems appropriate. The assets in the account(s) will be held by a qualified,
Diversify-approved custodian.
The Client and IAR will work together to select one or multiple strategies designed to achieve the Client’s financial goals. To
accomplish this, the IAR will be required to obtain from the Client an Investment Management Agreement and Investment Policy
Statement. Diversify has authority to establish, modify, or terminate relationships with third parties, which may include affiliates of
the Adviser, third-party managers, or subadvisors, as appropriate.
The DMS Platform also offers the ability to execute investments into one or more illiquid alternative investments within Client’s
account(s). An alternative investment is generally defined as an asset that is not one of the conventional investment types, such as
stocks, bonds, mutual funds, or cash. Alternative investment asset classes may include, but are not limited to, real estate, debt
funds, private equity, commodities, hedge funds, venture capital, etc. and typically have minimum net worth and/or income
requirements that must be met. Alternative investments are designed to assist investors in creating a diversified portfolio and may
provide unique advantages; however, they are complex in nature and involve a high degree of risk. For Diversify to manage the
account(s) appropriately, Diversify requires that the Client complete each alternative investment sponsor’s subscription documents,
as well as the Diversify Investment Management Agreement, Investment Policy Statement, and Investment Representations and
Agreement Form. These documents will be used to collect the Client’s basic financial information, risk tolerance, liquidity needs, time
horizon, and other facts that will be used to guide
the decisions the IAR makes in determining if an alternative investment is
appropriate within a Client’s account(s).
To implement a DMS Platform account, Diversify may utilize third-party sub-advisors, technology solutions, or other service
providers, to gain access to third-party manager relationships, additional due diligence, and investment analysis, or to obtain services
such as allocation and sleeve management, consolidated billing and reporting, or trade management, in order to curate the options
available to the IAR and Client.
TownSquare Managed Solutions (“TMS”) Platform
The TownSquare platform is a TPMM whereby Diversify engages in a sub-advisory relationship with a third-party money manager
(“TPMM”). On the TMS Platform, the TPMM is responsible for selecting investments consisting mainly of individual securities,
exchange-traded products and mutual funds within a model portfolio and for making changes to the investments selected. The IAR
is responsible for monitoring the client’s objectives and providing portfolio updates to the TPMM. The TMS Platform is sub advised
by TownSquare Capital, LLC (“TownSquare”), a third-party investment adviser.
NON-MANAGED COURTESTY ACCOUNT SERVICES
In certain circumstances, Diversify will enter into a relationship with the Client to facilitate the custody of Client assets at a Diversify-
approved custodian without providing investment management services or advice. Such accounts are referred to as Non-Managed
Courtesy Accounts. In these cases, Diversify and its IARs help facilitate the opening and maintenance of the Client’s account, including
transfers of securities and cash or cash equivalents, as directed by Client. Adviser will not direct the investment or reinvestment of
the assets in Client’s account, nor exercise any discretion on the account. Any trades placed by the Adviser in the Account will be
solely on a non-solicited, non-discretionary basis, as requested by Client.
Because of Adviser’s limited role, Adviser is not responsible for ensuring that the investments made in the Account conform to the
Client’s financial circumstances, investment objectives, investment time horizon, and risk tolerance, even if such information is
available to Adviser within the Diversify Investment Policy Statement. However, the Adviser may assist the Client procedurally in
imposing guidelines and/or restrictions (if any) that have been provided by the Client below. Such guidelines and restrictions may
be amended or supplemented from time to time by agreement of the parties and in accordance with the terms of this Agreement.
Legacy Advisory Services
Unified Managed Solutions (“UMS”) Platform
The UMS platform is closed to new accounts, but some existing accounts remain. The UMS platform allows the IAR to utilize
strategies developed by Diversify which incorporate sleeves within the account managed by third-party managers or subadvisors,
with traditional assets. Diversify will conduct due diligence on any potential outside managers prior to engagement. Those outside
managers who are incorporated into Diversify’s strategies will also be subject to ongoing due diligence. In addition, Diversify will
conduct ongoing analysis of the allocation of traditional assets and managers, making occasional adjustments to the managers and
allocations as it deems appropriate. The assets in the account(s) will be held at a qualified, Diversify-approved custodian.
UMS accounts are billed by Envestnet, a third-party technology provider. Envestnet’s billing includes the Advisory Fee negotiated
between the client and the IAR, subject to a maximum annual rate of 2.0%, as agreed to by the Client in the Diversify Investment
Management Agreement. Envestnet’s billing also includes: a Sponsor Fee, a portion of which will be paid to Diversify in lieu of the
portion normally paid to Diversify out of the Advisory Fee in other platforms; and the management fees of any third-party managers
involved in the strategy selected. These other fees are disclosed and agreed to separately, at or before account opening.
Envestnet bills in advance on a quarterly basis based on the market value of the assets in the account as valued by the custodian
and may include prorated fees for assets deposited to the account during the prior quarter. Upon payment, the Advisory Fee is paid
to the IAR, based on the agreement between the IAR and Diversify.
The Advisory Fee does not include other possible fees, such as custodian fees, underlying investment fees, or other third-party fees.
As custodian, TD Ameritrade may charge the account(s) up to 0.10% annually for trade execution.
RBC Managed Solutions (“RMS”) Platform
The RMS platform is closed to new accounts, but some existing accounts remain. RMS accounts are charged an Advisory Fee
negotiated between the client and the IAR, subject to a maximum annual rate of 2.0%. RMS accounts require that at least one third-
party money manager be selected. As a result, RMS accounts are also charged management, trade overlay, or other fees for the
implementation of the third-party managers’ strategy or strategies. These fees will be disclosed separately, at or before the time of
account opening, and included in the total fee charged at the custodian.
This Advisory Fee is billed in advance on a quarterly basis based on the market value of the assets in the account as valued by the
custodian and may include prorated fees for assets deposited to the account during the prior quarter. The Advisory Fee is a flat
negotiated fee.
Upon payment, the Advisory Fee is divided into two portions. First, Diversify retains a portion of the Advisory Fee for administrative
and other services, including the coverage of costs charged to Diversify by RBC for custody, clearing, and trade execution. Diversify
shares the remaining portion of the Advisory Fee with the IAR, based on the agreement between the IAR and Diversify.
Sub-Advisory Services
Certain IARs are also registered with an affiliated broker dealer, some of Diversify’s broker dealer representatives may also be
investment adviser representatives of an outside registered investment adviser, or “outside RIA.” In such cases, Diversify offers sub-
advisory services to those outside RIAs and their clients, allowing for the execution of investments, on a non-discretionary basis, into
one or more illiquid alternative investments within Client’s account(s), with Diversify acting as a sub-advisor to the primary adviser.
Client becomes a client of Diversify through Diversify’s Sub-Advisory Services Agreement but Diversify defers to the IAR of record at
the outside RIA to maintain the primary relationship and direct communication with Client. Diversify also relies on other information
about Client provided by the IAR of the outside RIA. Specific details of the sub advisory relationship can be found in the Sub-Advisory
Services Agreement.
An alternative investment is generally defined as an asset that is not one of the conventional investment types, such as stocks, bonds,
mutual funds, or cash. Alternative investment asset classes may include, but are not limited to, real estate, debt funds, private
equity, commodities, hedge funds, venture capital, etc. and typically have minimum net worth and/or income requirements that
must be met. Alternative investments are designed to assist investors in creating a diversified portfolio and may provide unique
advantages; however, they are complex in nature and involve a high degree of risk.
For Diversify to manage the account(s) appropriately, Diversify requires that the Client complete each alternative investment
sponsor’s subscription documents, as well as the Diversify Investment Management Agreement, Fee Schedule, Investment Policy
Statement, Investment Representations and Agreement Form, and investment specific documentation. Some of these documents
are obtained as Client conducts the initial trade through Diversify’s affiliated broker dealer. These documents will be used to collect
the Client’s basic financial information, risk tolerance, liquidity needs, time horizon, and other facts that will be used to guide the
decisions the IAR of the outside RIA makes in determining if an alternative investment is appropriate within a Client’s account(s).
Sub-advisory accounts are billed either in whole or in part by Diversify.
When billed in whole by Diversify: Sub-advisory accounts are charged an Advisory Fee negotiated between the client and the IAR,
subject to a maximum annual rate of 1.75%. Sub-advisory accounts are also charged a Management Fee of 0.25%. The Advisory Fee
and Management Fee are combined and billed as a single fee by Diversify. This single fee is billed in advance on a quarterly basis
based on the market value of the assets in the account as valued by the custodian and may include prorated fees for assets deposited
to or withdrawn from the account during the prior quarter in excess of $500.
When billed in part by Diversify: Sub-advisory accounts are charged a Management Fee of 0.25%, billed in advance on a quarterly basis
based on the market value of the assets in the account as valued by the custodian and may include prorated fees for assets deposited
to or withdrawn from the account during the prior quarter in excess of $500. The outside RIA may also charge their own advisory
fee or other fees, as negotiated with the outside RIA.
The Advisory and Management Fees do not include other possible fees, such as custodian fees, underlying investment fees, or other
third-party fees. When applicable, a transaction fee and custody fees may be charged per alternative investment in sub-advisory
accounts by the qualified custodian.
Tailoring of Advisory Services
Diversify tailors its advisory services to the individual needs of its Clients. IARs begin by gathering information about the Client’s
personal financial situation and then meet with the Client to clarify and confirm the financial information and determine each
Client’s specific goals, objectives, needs, and risk tolerance. Then, the IAR recommends a proper asset allocation based on the
Client’s personal financial situation.
Clients may impose limitations or restrictions on investing in certain securities or types of securities by providing separate written
instruction to Diversify. However, Diversify reserves the right not to enter into a contract with a prospective Client, or to terminate
an agreement with an existing Client, if the proposed limitation or restriction is likely, in Diversify’s opinion, to impair its ability to
effectively provide services to the Client.
Wrap Fee Programs
As mentioned above, Diversify provides Wrap Fee Programs, including the AMS Plus (“AMS+”) Platform. Under the Programs,
Diversify offers portfolio/investment management services on a discretionary basis as granted by the clients in the Investment
Management Agreement. The IAR’s discretion will include the authority to purchase and sell securities and other investment
instruments in the account, while implementing asset allocation strategies and product strategies that are aligned with the Client’s
investment profile.
Unlike non-wrap accounts where clients will pay brokerage commissions or transaction charges, in a wrap account the Client pays
one total fee for management, brokerage, and custody. Diversify does not manage wrap fee accounts in a different manner than
non-wrap fee accounts, as Diversify and its IARs tailor their portfolio/investment management strategies to the individual needs of
each Client regardless of the Platform the Client chooses. Both Diversify and the IAR will receive a portion of the wrap fee for their
services. More information on the Wrap Fee Programs is available in Diversify’s Wrap Fee Program Brochure, which can be provided
upon request.
Retirement Plan Consulting Services
Diversify provides Retirement Plans with Fiduciary Services, and/or Communication and Education Services (“Services”), as agreed
to in Diversify’s Retirement Plan Services Agreement.
Plan Fiduciary Services
Diversify serves as an ERISA 3(21) Fiduciary in support of the Plan Sponsor, depending on the terms of the agreement with the Plan.
Diversify provides the following Fiduciary Services, under the terms of the Retirement Plan Services Agreement with each Plan
Sponsor:
• Vendor Analysis
• Employee Enrollment and Education Tracking
• Investment Policy Statement
• Investment Monitoring
• Performance Reports
• Ongoing Investment Recommendation and Assistance
• ERISA 404(c) Assistance
• Benchmarking Services
• Plan Design
Retirement Account Rollovers Conflict of Interest: When we provide investment advice to you regarding your retirement plan
account or individual retirement account, we are fiduciaries within the meaning of Title I of the Employee Retirement Income Security
Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. The way we make money creates
some conflicts with your interests, so we operate under a special rule that requires us to act in your best interest and not put our
interest ahead of yours. Under this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations (give prudent advice);
• Never put our financial interests ahead of yours when making recommendations (give loyal advice);
• Avoid misleading statements about conflicts of interest, fees, and investments;
• Follow policies and procedures designed to ensure that we give advice that is in your best interest;
• Charge no more than is reasonable for our services; and
• Give you basic information about conflicts of interest.
A client or prospective client leaving an employer typically has four options regarding an existing retirement plan (and may engage
in a combination of these options): (i) leave the money in the former employer’s plan, if permitted, (ii) roll over the assets to the
new employer’s plan, if one is available and rollovers are permitted, (iii) roll over to an Individual Retirement Account (“IRA”), or (iv)
cash out the account value (which could, depending upon the client’s age, result in adverse tax consequences). In the event
Diversify recommends that a client roll over their retirement plan assets into an account to be managed by Diversify, such a
recommendation creates a conflict of interest if Diversify will earn an advisory fee on the rolled over assets. When acting in such
a capacity, Diversify serves as a fiduciary under the Employee Retirement Income Security Act (ERISA).
There is a conflict of interest when a Diversify IAR makes a recommendation that a participant roll over assets from a retirement
account into a new or existing account or investment (e.g. rollover IRA) managed by Diversify. The conflict of interest exists because
Diversify will receive compensation (e.g., management fees) if the money is rolled over, but it will not if the recommendation is not
accepted.
Compliance with Prohibited Transaction Exemption PTE 2020-02
In December 2020, the DOL adopted a new exemption under ERISA (“PTE 2020-02”), which specifically covers three activities
prohibited under Section 406(a). These activities are self-dealing, receiving compensation from third parties in connection with any
transactions involving an ERISA plan, and principal transaction activity.
PTE 2020-02 can be relied upon by, among others, SEC registered investment advisers and their investment professionals that
are deemed investment advice fiduciaries, so long as all the exemption’s requirements are met, as applicable. There are five
main components to PTE 2020-02, which are designed to safeguard against the conflicts of interest that apply to the prohibited
activities covered by the exemption. These include:
• Adhering to specific Impartial Conduct Standards
• Providing specific disclosure to each ERISA Plan client 8
• Maintaining applicable written policies and procedures
• Performing and documenting a retrospective review
• Having a senior officer make certain written certifications.
Diversify is deemed to be an investment advice fiduciary. At all times, the Firm will act in the client’s best interest in making
any recommendations related to assets covered by ERISA. Diversify will comply with all applicable rules in order to maintain
this exemption.
Communication and Participant Education Services
Diversify provides Communication and Education to the Plan and its Participants, under the terms of the Retirement Plan Services
Agreement with each Plan Sponsor:
• Upon eligibility, direct employee contact by phone, e-mail, or letter to promote enrollment
• Investment education
• Comprehensive financial planning
• Periodic company-wide employee survey of retirement plan understanding
• Customer satisfaction surveys
• Periodic employee group education opportunities
Assets Under Management
As of December 31, 2022, Diversify managed approximately:
• $2,006,029,864 in Client assets on a discretionary basis
• $3,702,465 in Client assets on a non-discretionary basis
• $2,009,732,330 total Client assets