Verity Asset Management, Inc. is a SEC-registered investment adviser. Our principal place of business is located in the American Tobacco Historic District in Durham, North Carolina. Our firm was formed as an independent broker-dealer in 1996 under the name, Verity Investments, Inc.; we began conducting business as a registered investment adviser in 2005. In June 2011, the broker-dealer business was moved to a separate corporate entity, and we changed our name to Verity Asset Management, Inc. Verity Financial Group, Inc., our firm's parent corporation, owns 100% of the stock of both Verity Asset Management, Inc. and our broker-dealer affiliate, Verity Investments, Inc. Verity Asset Management, Inc. offers the following advisory services to our clients: DISCRETIONARY ACCOUNT MANAGEMENT AMOUNT OF MANAGED ASSETS - As of 12/31/2023, we were actively managing $902,895,000 of clients' assets on a discretionary basis. We do not directly manage any accounts on a non-discretionary basis. INVESTMENT ADVISORY SERVICES: MODEL PORTFOLIO MANAGEMENT Our firm provides discretionary portfolio management services to clients primarily but not exclusively through model portfolios. Models may be managed by us or by outside third-party managers which we have selected. Some of the models are based on a broad tactical asset allocation approach to investment management. Certain more specialized models use other methodologies, which will be described below. Each model is designed to meet a specific investment objective. Tactical Asset Allocation Models Asset allocation is an investment strategy that seeks to balance risk and reward by diversifying a portfolio across multiple asset classes, such as stocks, bonds, and cash. Tactical asset allocation is an active version of the strategy that seeks to improve the risk-adjusted returns by modifying the allocation mix to take advantage of market pricing anomalies and/or market trends. Anomalies could include overpriced or underpriced markets, market sectors, or individual securities. To enhance the number of potential opportunities and to increase our portfolio diversification options, we may select securities from a very broad range of asset classes, market sectors, and countries. Models may be invested at various times with targeted exposure to U.S. and foreign equity and debt securities, emerging markets equity and debt, commodities, real estate, and currencies. We may also purchase securities that "short" selected equity or debt markets; as a result, they increase in value when those markets decline. Securities of this type are most often used to hedge or offset market risk. Specific securities in these portfolios may be selected from open and closed-end mutual funds, exchange-traded funds (ETFs), and individual securities. Although tactical allocation is used with the intent of better managing overall market risk, the risk of loss inherent in securities markets remains. There can be no assurance that the strategies we implement will not result in greater risk of loss if our assessment of market conditions and choice of securities and/or hedging strategies prove incorrect. Among other risks, the specific market anomalies which the strategies are seeking to exploit may change, and the timing of our adjustments to portfolios may be inappropriate. In addition, if used alone, securities with direct exposure to commodities, emerging markets, and currencies traditionally have considerably greater risk than average large company U.S. stocks and bonds; by using them as part of a larger asset allocation strategy, our intent may be to reduce overall portfolio risk, but there is no guarantee we will achieve that objective. Trading frequency will vary based upon our ongoing evaluation of economic and market conditions along with the specific holdings in each model; any lack of trades does not mean we are not monitoring on a continuous and ongoing basis. In addition to risks within equity markets as expressed above, bonds and preferred securities are also subject to varying degrees of credit, liquidity, and interest rate risk. Preferred securities in particular can be less liquid than other securities, making them very volatile under certain market conditions; selling these securities under such conditions can result in significant loss of value. Conservative Total Return Model The objective is growth of capital with a material reduction of risk compared to a typical diversified stock portfolio. Tactical All Asset Model The objective is growth of capital in a manner that is less erratic than broad U.S. equity markets. The model seeks to enhance risk-adjusted performance, not on a year-to-year basis, but over multi-year cycles of market ups and downs. Retirement Platform Models Our firm provides discretionary portfolio management of retirement accounts for individual participants on certain retirement plan platforms, including those of TIAA, Fidelity Investments, IPX Retirement, Charles Schwab, PCS, Aspire, and others. These accounts are managed using model portfolios. Security selection for the retirement platform models is typically limited to the mutual funds (and, in some cases, annuities and/or annuity subaccounts) available within each retirement plan. As a result, the strategies are modified as may be appropriate based upon the specific fund options of each plan. A version of these mutual fund strategies may also available for accounts held outside of retirement plans. Workplace Conservative Model The objective is stable growth of capital with a material reduction of risk compared to a typical diversified stock portfolio. Workplace Balanced Growth Model The objective is growth of capital over time at a modest rate relative to broad U.S. equity markets, seeking to balance opportunity for growth with management of downside risk. The Balanced Growth Model is more aggressive than the Conservative Model. Workplace Dynamic Growth Model The objective is strong growth of capital over the long term. It will assume greater volatility and risk of loss than the Balanced Growth Model, but will seek to achieve a comparable or lower level of risk than the overall U.S. equity market. Workplace Focused Growth Model The objective is aggressive growth of capital. It may assume equal or greater risk than the U.S. equity market and is expected to remain fully invested or close to fully invested in equities at all times. Workplace Retirement Income Model The objective is to provide both income and distribution options for retirement. It is structured with a goal of accumulating and ultimately distributing a reliable stream of retirement income, incorporating an annuity allocation intended to contribute to both goals. (Guarantees that may come with an annuity are dependent on the claims paying ability of the underlying insurance company. Annuity product parameters are defined exclusively by the underlying insurance carrier. Participants who choose to annuitize some or all of their savings to income benefits are making a permanent decision; once income benefits have begun, participants are unable to change to another option. The ability to annuitize is subject to each specific retirement plan’s rules, and certain products may not be available to all persons. Verity does not have any direct relationship with any annuity provider beyond certain distribution and platform access agreements. Explanation of annuity provisions is for general information only; specific guarantees, contract provisions, annuitization options and all other information about any annuity in the portfolio should be requested directly from the pertinent insurance company or companies.) Some retirement plans offer Self Directed Brokerage Account options, which provide access to a much larger universe of mutual funds. We offer versions of the models above designed specifically for these Self Directed Brokerage Accounts, sometimes referring to them as “Sector Based” Models. Verity Asset Management, Inc. is not sponsored by, affiliated with, or in any way related to TIAA, Fidelity Investments, IPX Retirement, Charles Schwab, PCS, Aspire or other platforms or custodians or any of their affiliates. Specialty Models - Managed by Verity We also offer Specialty Models managed by Verity portfolio managers. These specialized strategies may be more targeted than the majority of our models, or they may be unique in other ways. They may be selected for the purpose of offering additional opportunities for growth, diversification, and/or other potential benefits. Concentrated Rotation Model The objective is aggressive growth of capital. The model is expected to exhibit significant volatility and a greater risk of loss compared to a typical diversified equity portfolio. It is designed for clients seeking an aggressive component that is not exclusively composed of equities to complement a more broadly diversified portfolio. Target allocations will cover three broad categories: (1) approximately 40-50% individual stocks, typically concentrated among no more than 5-6 companies; (2) approximately 30% in equity sector-based ETFs or mutual funds; and (3) approximately 20-30% in non-equity assets. The model may be invested at various times with exposure to U.S., foreign, and emerging markets equity securities, and, in the non-equity category, may be invested in various debt securities, commodities, real estate, and currencies. It may also in the non-equity category purchase securities that short selected equity or debt markets and thus increase in value when those markets decline. Specific securities may be selected from open and closed-end mutual funds, exchange-traded funds (ETFs), and individual stocks. Portfolio concentration poses a significant increase in portfolio risk, and high volatility should be expected. Securities in this model are also subject to short-term trading, so this model may be expected to exhibit much greater turnover of securities than some less aggressive models. As a consequence, accounts may experience higher transaction costs (though we expect these to remain minimal), and tax consequences of short-term trading should be considered if the model will be used in taxable accounts. Small/MidCap Value Model The objective is growth of capital at a rate greater than the unmanaged Russell 2500 Value Index. The Russell 2500 Value Index is an unmanaged index of U.S. small and midcap value stocks. The portfolio manager uses a set of screening criteria in an effort to identify small and midcap companies that are currently selling at a discount to their estimated value. The premise is that the market will ultimately recognize the estimated full value of the company and the share price will rise to reflect that value, though there is no guarantee that this will occur. Primary risks of the strategy include the potential that the assessments of value are incorrect, the timing of allocation changes is ineffective, or the securities selected fail to rise in value in the manner anticipated. In addition, share prices of smaller companies tend to be more volatile than those of larger companies. The model will typically consist of 15 to 25 individual stocks and is designed to be close to fully invested at all times. It can be expected to experience market risk and volatility similar to the Russell 2500 Value Index, but concentration of the portfolio in a limited number of stocks can also result in greater risk of loss. Tactical MultiCap Value Model The objective is growth of capital at a rate greater than the unmanaged Russell 3000 Value Index over full market cycles. The Russell 3000 Value Index is an unmanaged index of U.S. value stocks covering the spectrum from small cap to large cap. The portfolio manager uses a set of screening criteria in an effort to identify companies that are currently selling at a discount to their estimated value. The premise is that the market will ultimately recognize the estimated full value of the company, and the share price will rise to reflect that value, though there is no guarantee that this will occur. Primary risks of the strategy include the potential that the assessments of value are incorrect, the timing of allocation changes is ineffective, or the securities selected fail to rise in value in the manner anticipated. To manage risk, the portfolio manager monitors technical trends for U.S. stocks. When the aggregate price action of tracked equities turns negative, this will trigger the implementation of a hedge position designed to offset much of the risk of a decline in stock prices. There is no guarantee that the timing or effect of this strategy will be successful. The model will typically consist of 10 to 25 individual stocks. Concentration of the portfolio in a limited number of stocks can also result in greater risk of loss, though the goal is to materially reduce market risk over longer periods of time using the hedging strategy explained above. There is a variation of this model, called the MultiCap Value Model. The MultiCap Value Model uses the same stock selection process. However, it does not use a hedge position to reduce risk; it is thus fully exposed to market risk at all times. Domestic Equity Opportunity Model The objective is growth of capital at a rate which exceeds the S&P 500. The model is expected to consist of individual stocks along with ETFs which track various sectors of the U.S. equity market. In an effort to enhance potential return and reduce risk, the model may be concentrated in sectors displaying more favorable fundamentals and/or trends, in the judgment of the manager; however, at least 3 of the 10 S&P 500 sectors must be represented in the portfolio at all times. The model may hold cash and cash equivalents but does not intend to hold more than 25% in cash at any time. In considering risk, an investor should expect to be fully exposed to the risk of declines in the broad U.S. equity market. In addition, since the model will selectively invest in specific market sectors and in certain individual securities, it could potentially experience greater volatility and declines in value than the overall market if its selection of sectors and securities proves unfavorable. Opportunistic Income Model The objective is to provide an unconstrained income strategy, allowing the portfolio manager to seek the most attractive total return opportunities – based on prevailing market conditions, with a strong focus on managing downside risks. The portfolio may invest in diversified sectors in the fixed income markets (including government securities, corporate bonds, high yield bonds, and mortgage and asset-backed securities), preferred securities, income producing stocks, and other publicly traded securities, including convertible bonds and REITs. Exposures to these asset classes may be acquired using any combination of individual securities, exchange-traded funds (ETFs), or mutual funds. Additionally, the portfolio manager has discretion to use funds that short the markets, primarily for the purpose of attempting to protect the portfolio against the potential negative impact of rising interest rates. The goal of the portfolio’s risk management process is to achieve a level of risk comparable to a diversified bond fund, but, given the range of securities which may be used, there is no guarantee this will be achieved. As mentioned previously, a primary portfolio risk is the potential negative effect of rising interest rates on bonds and other income producing securities. Bonds and preferred securities are also subject to varying degrees of credit, liquidity, and interest rate risk. Preferred securities in particular can be less liquid than other securities, making them very volatile under certain market conditions; selling these securities under such conditions can result in significant loss of value. In addition, equity securities and REITs, though normally limited as a percentage of the portfolio, are frequently volatile. Multiple versions of this model may be implemented over time in an effort to improve client results. These variations may be the result of account size, liquidity of certain income securities, or maturities of certain fixed income securities. Enhanced Income Model – Closed to new investors, effective March 20, 2024. The objective is to provide an enhanced yield as compared to cash and money market type instruments by accepting a limited degree of fluctuation of principal. To achieve this objective, the strategy will typically (a) invest primarily in short-term securities that are slightly beyond the duration of traditional money market funds, and (b) also invest in a broader mix of securities. The portfolio may invest in diversified sectors in the fixed income markets (including government securities, corporate bonds, high yield bonds, and mortgage and asset-backed securities), preferred securities, income producing stocks, and other publicly traded securities, including convertible bonds, and REITs. The goal of the portfolio’s risk management process is to achieve a lower level of sensitivity to interest rates than typical intermediate bond portfolios; however, even short-term income securities are exposed to risk from rising interest rates. Bonds and preferred securities are also subject to varying degrees of credit and liquidity risk. Preferred securities in particular can be less liquid than other securities, making them very volatile under certain market conditions; selling these securities under such conditions can result in significant loss of value. In addition, any equities, REITs, high yield bonds, convertible bonds, or other securities, can be expected to experience a higher degree of individual volatility as compared to short-term bonds. Multiple versions of this model may be implemented over time in an effort to improve client results. These variations may be the result of account size, liquidity of certain income securities, or maturities of certain fixed income securities. Tax-Advantaged Income Model The objective is to provide income taxable for federal income tax purposes at a rate lower than maximum income tax rates, with a secondary objective of capital appreciation. As a result, the strategy may be particularly well- suited for income-oriented investors in higher tax brackets. This strategy will typically be more appropriate for taxable accounts, as IRAs and other non-taxable accounts will not gain any tax benefit. However, there may be other considerations pertinent to each individual investor, that may make this strategy preferable to comparable strategies offered by the firm, including but not limited to potentially greater liquidity of the strategy’s holdings as compared to other strategies holding preferred securities. The strategy expects to invest primarily in preferred securities but may at the discretion of the manager hold limited allocations to non-preferred short-term fixed income securities and cash equivalents. Preferred securities and other fixed income securities are subject to market risk, along with credit, liquidity, and interest rate risk. Preferred securities in particular can be less liquid than other securities, making them very volatile under certain market conditions; selling these securities under such conditions can result in significant loss of value. Preferred securities that pay qualified dividends are also subject to risk associated with changes in federal income tax rates or rules. Tax-Exempt Income Models The objective is to provide income exempt from federal income tax, with a secondary objective of capital appreciation. As a result, the strategy may be particularly well-suited for income-oriented investors in higher tax brackets. Income may be subject to federal alternative minimum tax (AMT) as well as state and local taxes. State-specific variations of the strategy, such as Verity North Carolina Tax-Exempt Income, will focus on municipal bonds which can be exempt from both federal and state income tax in the respective state(s). The strategy will invest primarily in investment-grade municipal bonds which are exempt from federal income tax (and, where appropriate, state income tax). Under normal circumstances, the average maturity of the bonds is expected to fall between 3 and 10 years. Municipal instruments in the portfolio may include general obligation, revenue obligation, industrial development, and moral obligation bonds, along with tax-exempt derivative instruments, stand-by commitments, and municipal instruments backed by forms of credit enhancement issued by domestic or foreign banks. Bonds will be subject to risk to principal in the event of rising interest rates. In addition, they are subject to credit and liquidity risk. Municipal bonds are also subject to risk associated with changes in federal income tax rates or rules. State-specific versions of the strategy will by definition be less geographically diversified, which may as a result subject them to greater risk than a portfolio with greater geographic diversity. Specialty Models - Managed by Outside Third-Party Managers We may also elect to use Specialty Models managed by outside third-party managers. In evaluating, selecting, and monitoring these models, we are acting as a manager of managers. As with our internally managed Specialty Models, these specialized strategies may sometimes be more targeted than our tactical asset allocation models, or they may be unique in other ways. They may be selected for the purpose of offering additional opportunities for growth, diversification, and/or other potential benefits. Clients should also refer to the Form ADV Part 2 of the outside third-party manager, which we will provide, for a full description of their services. Earth Equity Green Sage Sustainability Model The objective is growth of capital from a global portfolio of stocks focused on companies with a “sustainability” ethic. (Sustainable investing in general terms considers the environmental, social, and corporate governance practices of companies in addition to traditional investment approaches.) Companies involved in the fossil fuel industry are not eligible for selection. The selection process will employ fundamental analysis in combination with other metrics. The portfolio will consist of 30-50 stocks of large, mid, and small cap companies, with no more than 4 stocks from any single industry. A minimum of 30% of the companies will be domiciled outside of the United States. The portfolio is reset annually and is reviewed for adjustments once at mid-year, when

up to 20% of the portfolio may be changed. Investments in foreign companies, small cap companies, and companies which are not yet profitable carry greater risks than the typical large U.S. company, so the inclusion of companies in those categories make this an aggressive growth strategy which is subject to higher than average volatility. In addition, exclusion of companies and industries which do not meet the strategy’s proprietary selection criteria may present a risk that the strategy will not be as effectively diversified as strategies that do not have these restriction. First Ascent Global Explorer Models These globally diversified portfolios are managed for five different levels of risk. The portfolios use a “core plus satellite” approach. The “core” typically consists of low-cost passive investments, such as index funds or exchange-traded funds (ETFs) that track domestic or international stock or bond markets. “Satellites” may consist of either passive index-tracking investments or actively-managed mutual funds; they will typically represent 0% to 50% of each portfolio. A primary focus is on keeping internal expenses and transaction costs low. The portfolios are managed for the long term and generally are traded only infrequently. Tax-sensitive versions of the portfolios are available. There is a risk that the portfolios will not meet their specific investment objectives. There is an additional risk that active managers will not provide the positive contributions to the portfolio which are anticipated. There is also a risk that the index-oriented investments in portfolios will not precisely track the performance of the indexes they are intended to replicate. Franklin Street Strategic Large Cap Growth The objective is growth of capital at a rate greater than Russell 1000 Growth Index over a normal business cycle (typically 3+ years). The Russell 1000 Growth Index is an unmanaged index of U.S. large cap growth stocks. Franklin Street measures the attractiveness of a business by evaluating its operating margins, returns on capital, and reinvestment opportunities. They believe that duration of growth is the most important factor in valuing a growth company, so particular focus is placed upon an assessment of a company’s sustainable advantages within its marketplace. A valuation model is prepared for each company based upon return on invested capital, cost of capital, earnings growth rate, and expected duration of growth. Buy and sell decisions are based primarily upon the “warranted price/earnings ratio” established by this valuation model. The portfolio is designed to consist primarily of high-quality large cap growth companies, but it may also invest in smaller companies when opportunities warrant. The portfolio typically holds 35-40 individual stocks. Growth equities are typically subject to greater risk than the broad equity market. In addition, there is a risk that the portfolio manager’s assessments of value prove incorrect, causing the portfolio to underperform its index. Other Models Certain investment adviser representatives may, with the approval of the Chief Investment Officer, direct allocation strategy for models used only with their personal clients, based on their assessment of client financial circumstances and investment objectives. Allocation strategy is monitored by the Chief Investment Officer. All trading is conducted by one of our firm's portfolio managers. *** Investment Risk It is important to note that there is no guarantee the investment objective of any model or strategy will be achieved. There is always a risk of losing money in any investment strategy, and there is no guarantee that strategies that have been successful in the past will be similarly successful in the future. Model Suitability Through personal discussions with each client in which the client's risk tolerance, personal and financial status, and account objectives are established, we help guide clients in selecting suitable model portfolios for their accounts. Each model is managed based on the portfolio objective of the model, rather than on each client's individual objectives. The Chief Investment Officer is responsible for monitoring all models for adherence to their stated strategies. To ensure continued suitability of the model selection(s) for each client's account(s), we will: 1. Seek to maintain regular communication with each client, no less than annually, consistent with the nature of the account and the client's desired frequency of communication. One objective of this periodic communication will be to stay informed of any change in financial circumstances or investment objectives that might warrant a change in model or composite selection, and to determine whether the client wants to make or modify any reasonable restrictions on the management of the account; 2. Send written account profile forms to each client no less than every 36 months requesting updated information regarding changes in the client's financial circumstances and investment objectives: 3. Require written confirmation from the client for all model changes, with suitability of the change approved by one of our firm's compliance principals. INVESTMENT ADVISORY SERVICES: INDIVIDUAL PORTFOLIO MANAGEMENT Dividend Builder Strategy For accounts with a minimum of $250,000 in assets, we will provide management of an individual portfolio of dividend paying securities. The primary goal of this strategy is to produce a relatively stable and growing stream of dividends; growth of capital is a secondary objective. Companies will be selected in part based on an established record of earnings and dividend growth. They will also be screened with an objective of purchasing at attractive fundamental values, among other factors. The intent is to hold these securities through market ups and downs for the primary purpose of receiving the dividend income; however, companies are continually monitored and may be sold and replaced in the portfolio if they are considered to be significantly overvalued or if there may be tax benefits to the sale, among other considerations. Portfolios using the strategy will typically consist of 20 – 25 securities. Clients may impose reasonable restrictions on securities to be held in their account and may in certain instances broaden the goals of the portfolio in consultation with the portfolio manager. Holdings may include cash and cash equivalents, including exchange-traded CDs. The portfolios will generally consist of individual stocks, although they may also hold a limited number of exchanged-traded REITs and/or master limited partnerships. Portfolio values can be expected to fluctuate with the equity markets, and there is always the potential to suffer significant loss of value in any individual security. As such, account holders should be prepared to weather sometimes significant fluctuations in value, despite the overall goal of maintaining a relatively consistent and growing dividend stream. In addition, dividend payments are not guaranteed to grow over time and may be discontinued by companies at any time. Fixed Income Portfolios For a minimum allocation of $100,000, we will create and manage a customized portfolio of individual bonds and/or other fixed-income securities, including preferred securities and exchange-traded funds (ETFs). In limited instances, clients using this service may elect to include equity holdings in their portfolio under the same fee structure. The general intent is to hold the bonds in the portfolio until maturity for the purpose of receiving the interest income; however, companies are continually monitored and may be sold and replaced in the portfolio at the discretion of the portfolio manager. The principal values of the securities in the portfolio will fluctuate, so there is a risk of loss if they are sold prior to maturity. Preferred securities and other fixed income securities are subject to market risk, along with credit, liquidity, and interest rate risk. Preferred securities in particular can be less liquid than other securities, making them very volatile under certain market conditions; selling these securities under such conditions can result in significant loss of value. Preferred securities typically do not have maturity dates and thus do not guarantee a return of principal at maturity. The portfolio manager will seek to manage credit risk by diversifying the portfolio when holding fixed-income securities other than U.S Treasury securities, but portfolios of smaller sizes are likely to be less diversified. Clients may impose reasonable restrictions on securities to be held in their account. Capital Advisory Services For a minimum allocation of $1,000,000, we will create and manage a custom portfolio of fixed-income securities and/or stocks and other securities based upon individual client goals and objectives. Clients may impose reasonable restrictions on securities to be held and may in general give direction regarding any specific desires and preferences for their portfolio. Security selection will be guided by fundamental analysis along with other considerations pertinent to each account. These portfolios will be structured with a goal of corresponding to the risk tolerance profile communicated to us by the client and/or their advisor. There are no guarantees those objectives will be met in all cases, and there is always a risk of loss, particularly in portfolios holding a smaller number of individual securities. General In other instances, a client may request that some or all the account assets be held outside of any model or strategy. In some cases, this will be a temporary circumstance for new clients of our firm who have transferred their assets to one of our custodians in-kind and are transitioning their accounts over a short period of time into our models. In all such cases, our firm provides continuous advice to the client regarding the investment of client funds based on the individual needs of the client. As a result of personal discussions in which goals and objectives based on a client's particular circumstances are established, we develop and manage a suitable portfolio. We manage these advisory accounts on a discretionary basis. Account supervision is guided by the client's stated objectives (i.e., aggressive, moderately aggressive, moderate, etc.), as well as tax considerations. Clients may impose reasonable restrictions on investing in certain securities, types of securities, or industry sectors. Our investment recommendations are not limited to any specific product or service, including those offered by a broker-dealer or insurance company, and can include advice regarding the following securities:
• Exchange-listed securities
• Securities traded over-the-counter
• Equity options
• Foreign issuers
• Corporate debt securities (other than commercial paper)
• Municipal securities
• Variable life insurance
• Variable annuities
• Mutual fund and exchange traded fund (ETF) shares
• Exchange Traded Notes (ETNs)
• United States governmental securities
• Interests in partnerships investing in real estate
• Interests in partnerships investing in oil and gas interests Because some types of investments involve higher degrees of risk, they will only be recommended when consistent with the client's stated investment objectives, tolerance for risk, liquidity and suitability. INVESTMENT ADVISORY SERVICES: INSTITUTIONAL PORTFOLIO MANAGEMENT Our firm may offer portfolio management services to institutional accounts, including defined benefit pension plans, endowments, foundations, and family offices. The investment strategy for each will be determined based upon the needs and circumstances of the pertinent entity and will operate within the parameters of the entity's investment policy statement (IPS). The selected strategy will typically utilize or mirror one or more of our model portfolios (described above), depending on the entity's risk tolerance profile, liquidity considerations, and time horizons. To enhance our potential to uncover investment opportunities and to increase diversification options, our firm makes investment selections from a very broad range of asset classes, market sectors, and countries. Models may be invested at various times with exposure to U.S. and foreign equity and fixed-income securities, emerging markets equity and debt, commodities, real estate, and currencies. We may also purchase securities that short selected equity or fixed-income markets and thus increase in value when those markets decline. Such positions are most often used for hedging purposes in the management of portfolio risk. Specific securities may be selected from open and closed-end mutual funds, exchange-traded funds (ETFs), and individual securities. Although tactical asset allocation is frequently used with the intent of better managing overall market risk, the risk of loss inherent in securities markets remains. There can be no assurance that strategies will not result in greater risk of loss if our assessment of market conditions and choice of securities prove incorrect. Among other risks, the specific market anomalies which the strategies are seeking to exploit may change, and the timing of our adjustments to the portfolio may be inappropriate. In addition, if used alone, securities with direct exposure to commodities, emerging markets, and currencies traditionally have greater risk than average large company U.S. stocks and bonds; by using them as part of a larger asset allocation strategy, even when our intent is to actually reduce overall portfolio risk, there is no guarantee we will implement that objective successfully. The entity's IPS may place restrictions on investing in certain securities or types of securities. INVESTMENT ADVISORY SERVICES: SUB-ADVISORY, AND THIRD-PARTY MANAGER SERVICES Our firm may offer certain of the above services on various custody and third-party platforms through sub- advisory or third-party manager agreements with outside Investment Advisers. Under these agreements, we may provide to clients of the outside Investment Advisers or platforms any of the model portfolio strategies outlined above, depending upon the terms of each specific agreement. In some cases, the investment advisory services may be provided in conjunction with various administrative and operational services, including fee calculation and trade management, as part of a turnkey asset management platform. Administrative and operational services may also be offered independent of investment management services. Under the terms of these agreements, we do not have direct contact with the individual clients and do not make a determination of the suitability of the model selected. That responsibility remains with the Investment Adviser and/or the client which is electing to use our portfolio management services. In some arrangements, we may elect to provide an investment strategy selection guide to assist in this process. RETIREMENT PLAN SERVICES INVESTMENT ADVISORY SERVICES TO RETIREMENT PLAN SPONSORS We provide various advisory services to pension plans either separately or in combination. Clients for these services may include 401(k) plans, 403(b) plans, 457(b) plans, other defined contribution plans, defined benefit plans and/or profit-sharing plans. Investment Policy Statement Preparation (IPS) - We may assist the plan sponsor in developing an appropriate investment strategy that reflects the plan sponsor's stated investment objectives for management of the overall plan. Using this information, we will prepare a written IPS detailing objectives, responsibilities, investment guidelines, and monitoring criteria, among other considerations. Selection of Investment Vehicles - We may screen and recommend to plan sponsors an appropriate menu of investment options for plan participants, taking into consideration fund management, expenses, risk characteristics, and asset class, among other factors. Monitoring of Mutual Funds / Investment Managers - We may monitor the plan's fund lineup on a quarterly basis and provide reports to the plan sponsors. Included in our reports will be funds that have been placed on "watch lists" for possible replacement and recommendations for replacement of funds when we believe such action is warranted. Employee Communications - We may provide educational support and investment workshops designed for the plan participants. The nature of the topics to be covered will be determined by us and the client. Where pertinent, will follow the guidelines established in ERISA Section 404(c). Model Portfolios - If this feature is selected by the plan sponsor, our firm will provide one or more of our Tactical Asset Allocation Models (described above) as investment options for plan participants. If a participant selects one of our models, we will manage the assets for the participant on a discretionary basis according to the specific strategy of that model. Plan Design Consulting - We may review plan document provisions, features, and benefits elected under the governing document. A qualified consultant will lead a review of available and elected plan features, in coordination with the plan document provider and designated plan administrator. Plan design considerations will include plan sponsor objectives, organizational structure, available plan arrangements and optimization of benefits. Compliance Review - We may coordinate operational controls through collaboration among all appropriate parties, including the plan sponsor, plan administrator, plan auditor, ERISA attorney, and among others. Responsibility for plan compliance rests exclusively with the plan sponsor, but through effective collaboration and administrative procedures, plan related compliance can be handled effectively and efficiently, and in compliance with relevant regulations. Vendor Management - Our consulting services may support vendor analysis and review for the multiple service providers involved in plan administration, including payroll service providers, third party plan administrators, plan auditors, ERISA attorneys, plan custodians, record keepers, participant service providers, advisors and software service providers. Vendor Fee/Service Reviews - We may offer third party benchmark reporting to assist in evaluating reasonable fees charged by service providers offering plan services as an ERISA covered service provider. Other Fiduciary Services - We may accept written designation as a Fiduciary to the plan under either ERISA Section 3(21) or ERISA Section 3(38). OTHER SERVICES ALLOCATION ALERT SERVICE We provide a portfolio monitoring and allocation alert service to participants in certain defined contribution retirement plans, such as 401(k)s, on a non-discretionary basis. The allocation alert service provides specific recommendations to clients regarding the allocation of investments in their retirement accounts. Recommendations are provided via email, and the client is responsible for implementing the recommended investment allocations. The account monitoring and recommendations are based on each client's personal risk profile, financial circumstances, and objectives. Strategies offered fall into three categories each with a different degree of market risk:
• Conservative (formerly “Moderate”) – The objective is moderate growth, but with an equal and sometimes greater focus on controlling risk.
• Balanced Growth (formerly “Core”) – The primary objective is growth, with a secondary focus on controlling risk.
• Dynamic Growth (formerly “Aggressive”) – The objective is maximum longer-term growth. Greater potential for loss and more significant fluctuations in value are to be expected. There can be no guarantee that the strategies will be successful. As with all investments, there is a risk of loss. NON-DISCRETIONARY ADVICE TO RETIREMENT AND MANAGED ACCOUNT PLATFORMS Acting as a strategist, we may provide recommendations and investment advice regarding the construction and maintenance of model allocations to retirement platforms and /or managed account platforms. For each model provided, our services will include recommended securities, weightings of each security, and changes to the weightings. We will not have control over actual execution of trades in any respect, including the timing of execution. We will not have discretion over client accounts or access to individual client information. FINANCIAL PLANNING On a limited basis, we may provide financial planning and consulting services for a fee. Clients using this service will typically receive a written report focusing in the areas of retirement planning, survivorship planning, education planning, investment allocation, and long-term care planning. Alternatively, a client may elect consultation services in one or more specific areas. We gather the necessary information through in-depth personal interviews and from financial documents provided by the client. Typically, the financial plan is presented to the client within six months of the contract date, provided that all information needed to prepare the financial plan has been promptly provided. Implementation of financial plan recommendations is entirely at the client's discretion. Should we offer our investment management or financial products in addition to financial planning services, there is a potential conflict of interest since there is an incentive for us to recommend products or services for which we may receive additional fees or commissions. However, financial planning clients are under no obligation to act upon any of our recommendations or to purchase any other products or services offered by our firm. ADVISORY REFERRAL SERVICES In very limited instances, our firm may receive compensation for referring a client to another registered investment adviser which offers services different from our own. Based on a client's individual circumstances and objectives, we may recommend the other investment adviser's services and assist the client in completing the other investment adviser's account paperwork. In any such instance, we will ensure that all federal and/or state requirements governing solicitation activities are met.