A. Firm Information
Team Hays Inc. dba DFS Advisory (“DFS Advisory” or the “Advisor”) is a registered investment advisor with the U.S.
Securities and Exchange Commission (“SEC”). The Advisor was organized as a Corporation under the laws of the
State of Texas in July 2005 and became a registered investment advisor in March 2023. DFS Advisory is owned and
operated by Joel T. Hays (President and Chief Compliance Officer). This Disclosure Brochure provides information
regarding the qualifications, business practices, and the advisory services provided by DFS Advisory.
B. Advisory Services Offered
DFS Advisory offers investment advisory services to individuals, high net worth individuals, trusts, estates,
businesses, and retirement plans (each referred to as a “Client”).
The Advisor serves as a fiduciary to Clients, as defined under the applicable laws and regulations. As a fiduciary, the
Advisor upholds a duty of loyalty, fairness and good faith towards each Client and seeks to mitigate potential conflicts
of interest. DFS Advisory's fiduciary commitment is further described in the Advisor’s Code of Ethics. For more
information regarding the Code of Ethics, please see Item 11 – Code of Ethics, Participation or Interest in Client
Transactions and Personal Trading.
Investment Management Services
DFS Advisory provides customized investment advisory solutions for its Clients. This is achieved through continuous
personal Client contact and interaction while providing discretionary investment management and related advisory
services. DFS Advisory works closely with each Client to identify their investment goals and objectives as well as risk
tolerance and financial situation in order to create a portfolio strategy. DFS Advisory will then construct an investment
portfolio utilizing its internal investment management and/or the use of independent managers, as appropriate for the
Client.
Internal Investment Management – The Advisor typically constructs investment portfolios utilizing mutual funds,
exchange-traded funds (“ETFs”), individual equities and/or individual bonds to achieve the Client’s investment goals.
The Advisor may also utilize other types of investments, as appropriate, to meet the needs of the Client. The Advisor
may retain legacy investments based on portfolio fit and/or tax considerations.
DFS Advisory’s investment strategies are primarily long-term focused, but the Advisor may buy, sell or re-allocate
positions that have been held for less than one year to meet the objectives of the Client or due to market conditions.
DFS Advisory will construct, implement, and monitor the portfolio to ensure it meets the goals, objectives,
circumstances, and risk tolerance agreed to by the Client. Each Client will have the opportunity to place reasonable
restrictions on the types of investments to be held in their respective portfolio, subject to acceptance by the Advisor.
DFS Advisory evaluates and selects investments for inclusion in Client portfolios only after applying its internal due
diligence process. DFS Advisory may recommend, on occasion, redistributing investment allocations to diversify the
portfolio. DFS Advisory may recommend specific positions to increase sector or asset class weightings. The Advisor
may recommend employing cash positions as a possible hedge against market movement.
DFS Advisory may recommend selling positions for reasons that include, but are not limited to, harvesting capital
gains or losses, business or sector risk exposure to a specific security or class of securities, overvaluation or
overweighting of the position[s] in the portfolio, change in risk tolerance of the Client, generating cash to meet Client
needs, or any risk deemed unacceptable for the Client’s risk tolerance.
At no time will DFS Advisory accept or maintain custody of a Client’s funds or securities, except for the limited
authority as outlined in Item 15 – Custody. All Client assets will be managed within the designated account[s] at the
Custodian, pursuant to the terms of the advisory agreement. Please see Item 12 – Brokerage Practices.
Use of Independent Managers – DFS Advisory may recommend that Clients utilize one or more unaffiliated
investment managers or investment platforms (collectively “Independent Managers”) for all or a portion of a Client’s
investment portfolio, based on the Client’s needs and objectives. In certain instances, the Client may be required to
authorize and enter into an investment advisory agreement with the Independent Manager[s] that defines the terms
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in which the Independent Manager[s] will provide its services. The Advisor will perform initial and ongoing oversight
and due diligence over each Independent Manager to ensure the strategy remains aligned with Clients investment
objectives and overall best interests. The Advisor will also assist the Client in the development of the initial policy
recommendations and managing the ongoing Client relationship. The Client, prior to entering into an agreement with
an Independent Manager, will be provided with the Independent Manager's Form ADV Part 2A - Disclosure Brochure
(or a brochure that makes the appropriate disclosures).
Retirement Accounts – When the Advisor provides investment advice to Clients regarding ERISA retirement accounts
or individual retirement accounts (“IRAs”), the Advisor is a fiduciary within the meaning of Title I of the Employee
Retirement Income Security Act (“ERISA”) and/or the Internal Revenue Code (“IRC”), as applicable, which are laws
governing retirement accounts. When deemed to be in the Client’s best interest, the Advisor will provide investment
advice to a Client regarding a distribution from an ERISA retirement account or to roll over the assets to an IRA, or
recommend a similar transaction including rollovers from one ERISA sponsored Plan to another, one IRA to another
IRA, or from one type of account to another account (e.g. commission-based account to fee-based account). Such a
recommendation creates a conflict of interest if the Advisor will earn a new (or increase its current) advisory fee as a
result of the transaction. No client is under any obligation to roll over a retirement account to an account managed by
the Advisor.
Financial Planning Services
DFS Advisory will typically provide a variety of financial planning and consulting services to Clients, pursuant to a
written financial planning agreement. Financial planning services may be a one-time project and an ongoing planning
engagement. Services are offered in several areas of a Client’s financial situation, depending on their goals and
objectives. Generally, such financial planning services involve preparing a formal financial plan or rendering a specific
financial consultation based on the Client’s financial goals and objectives. This planning or consulting may
encompass one or more areas of need, including but not limited to, investment planning, retirement planning,
personal savings, education savings, insurance needs, and other areas of a Client’s financial situation.
A financial plan developed for, or financial consultation rendered to the Client will usually include general
recommendations for a course of activity or specific actions to be taken by the Client. For example, recommendations
may be made that the Client start or revise their investment programs, commence, or alter retirement savings,
establish education savings and/or charitable giving programs.
DFS Advisory may also refer Clients to an accountant, attorney or other specialists, as appropriate for their unique
situation. For certain financial planning engagements,
the Advisor will provide a written summary of the Client’s
financial situation, observations, and recommendations. For consulting or ad-hoc engagements, the Advisor may not
provide a written summary. Plans or consultations are typically completed within six (6) months of contract date,
assuming all information and documents requested are provided promptly.
Financial planning and consulting recommendations pose a conflict between the interests of the Advisor and the
interests of the Client. For example, the Advisor has an incentive to recommend that Clients engage the Advisor for
investment management services or to increase the level of investment assets with the Advisor, as it would increase
the amount of advisory fees paid to the Advisor. Clients are not obligated to implement any recommendations made
by the Advisor or maintain an ongoing relationship with the Advisor. If the Client elects to act on any of the
recommendations made by the Advisor, the Client is under no obligation to implement the transaction through the
Advisor.
Retirement Plan Advisory Services
DFS Advisory provides non-discretionary retirement plan advisory services on behalf of the retirement plans (each a
“Plan”) and the company (the “Plan Sponsor”). The Advisor’s retirement plan advisory services are designed to assist
the Plan Sponsor in meeting its fiduciary obligations to the Plan and its Plan Participants. Each engagement is
customized to the needs of the Plan and Plan Sponsor. Services generally include:
• Vendor Analysis
• Plan Participant Enrollment and Education Tracking
• Investment Policy Statement (“IPS”) Design and Monitoring
• Investment monitoring and oversight
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• Performance Reporting
• Ongoing Investment Recommendation and Assistance
• ERISA 404(c) Assistance
These services are provided by DFS Advisory serving in the capacity as a fiduciary under the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”). In accordance with ERISA Section 408(b)(2), the Plan Sponsor
is provided with a written description of DFS Advisory’s fiduciary status, the specific services to be rendered and all
direct and indirect compensation the Advisor reasonably expects under the engagement.
Investment Management Platform
Betterment Institutional Platform - DFS Advisory may recommend that certain Clients implement their investment
portfolios through Betterment Institutional, a division of Betterment LLC (herein “Betterment Institutional” or the
“Investment Platform”). Betterment Institutional is what is often termed a “robo-advisor”, an online wealth
management service that provides automated, algorithm-based portfolio management advice. Robo-advisors use
technology to deliver similar services as traditional advisors, but generally only offer portfolio management and do
not get involved in a Client’s personal situation, such as taxes and retirement or estate planning. DFS Advisory
chose to affiliate with Betterment Institutional due to the Investment Platform’s customized portfolio allocations,
automated rebalancing, and competitive fees. DFS Advisory utilizes Betterment Institutional as a complement to its
comprehensive financial planning services to provide cost effective investing coupled with personalized financial
planning.
To establish accounts with Betterment Institutional, the Client will also enter into one or more agreements with
Betterment that provides the authority for discretionary investment management by the Investment Platform. DFS
Advisory remains the Client’s primary advisor and relationship contact and will select or construct a portfolio of
ETFs and/or cash equivalents from the universe of investments included on the Investment Platform.
DFS Advisory will have the discretionary authority to instruct Betterment Institutional with respect to portfolio
construction, asset allocation and other investment decisions, subject to the limitations described herein.
Betterment Institutional will implement the portfolio and be responsible for the discretionary trading of the ETFs in
the Client’s portfolio, including the purchase and sale of investments and the automatic rebalancing back to targets.
Betterment Institutional utilizes between ten to twelve different ETF’s, representing various asset classes for the
construction of investment portfolios. As discussed above, DFS Advisory will work with each Client to
select/construct a portfolio to meets the needs of the Client. The Client has limited ability to put restrictions on its
accounts. The account[s] cannot contain investments that are not included in the Betterment Institutional universe
of ETFs and cash equivalents.
Betterment Institutional, under its discretionary authority, will automatically adjust and rebalance the Client’s
accounts daily based on the drift tolerance established for the positions in the investment portfolio. The Advisor’s
investment philosophy is long-term, but the Advisor may make such tactical overrides to take advantage of market
pricing anomalies or strong market sectors. The Advisor does not actively trade in the Client’s account[s] and is
also limited to a enter one allocation change per account per trading day through Betterment Institutional, the Client
should be aware of these potential disadvantages.
For its services, Betterment Institutional will charge an asset-based fee that is in addition to the Advisor’s fee.
Betterment Institutional’s fee includes the securities transaction fees for all trades. The Advisor will only receive its
investment advisory fees as detailed in Item 5.A. below and does not share in any fees earned by Betterment
Institutional.
The Client, prior to entering into an agreement with the Investment Platform, will be provided with the Investment
Platform's Form ADV Part 2A (or a brochure that makes the appropriate disclosures).
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C. Client Account Management
Prior to engaging DFS Advisory to provide investment advisory services, each Client is required to enter into one or
more agreements with the Advisor that define the terms, conditions, authority and responsibilities of the Advisor and
the Client. These services may include:
• Establishing an Investment Strategy – DFS Advisory, in connection with the Client, will develop a strategy
that seeks to achieve the Client’s goals and objectives.
• Asset Allocation – DFS Advisory will develop a strategic asset allocation that is targeted to meet the
investment objectives, time horizon, financial situation and tolerance for risk for each Client.
• Portfolio Construction – DFS Advisory will develop a portfolio for the Client that is intended to meet the stated
goals and objectives of the Client.
• Investment Management and Supervision – DFS Advisory will provide investment management and ongoing
oversight of the Client’s investment portfolio.
D. Wrap Fee Programs
DFS Advisory does not manage a wrap fee program. However, certain Independent Managers and Betterment
Institutional will manage a wrap fee program. A wrap fee program is an investment program where investment
management services and securities transaction costs are combined into a single combined fee. The Client will be
provided with the applicable Independent Managers’ and Betterment Institutional’s wrap fee program brochure (or a
brochure that makes the appropriate disclosures).
E. Assets Under Management
As of December 31, 2023, DFS Advisory manages $102,789,950 in Client assets, $78,812,949 of which are managed
on a discretionary basis and $23,977,001 on a non-discretionary basis. Clients may request more current information
at any time by contacting the Advisor.