Firm Information
Diversified Financial Management Associates, Inc. doing business as Diversified Financial Management
(“DFM” or the “Advisor”) is an independent, fee only, investment advisory firm registered with the U.S
Securities and Exchange Commission (“SEC”). Established in 1986, DFM is organized under the laws
of Massachusetts as a privately held corporation, and owned by H. Calvin Place, Jr. (President and Chief
Compliance Officer). This Disclosure Brochure provides information regarding the qualifications,
business practices, and advisory services provided by DFM.
Advisory Services Offered
DFM offers investment advisory services to individuals, high net worth individuals, trusts, estates,
businesses, and retirement, pension, and profit sharing 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. DFM’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 Advisory Services
DFM customizes its investment advisory service according to the needs of each individual
Client. Typical needs of our Clients include income generation, capital preservation, and growth of
capital. DFM's approach to investing seeks to generate competitive long-term returns for its Clients
through diversified portfolios. As part of the investment advisory service, DFM assesses the global
economic and investment conditions, advises on asset allocation, and identifies specific securities for
purchase and sale. DFM enters into discretionary and non-discretionary advisory agreements with
Clients; the distinctions between discretionary and non-discretionary accounts are described in the
following two paragraphs.
When DFM has investment discretion, it is authorized to make all investment decisions and to direct the
execution of all transactions for the Client's account (subject to the investment objectives, guidelines,
and restrictions as noted in the Client’s investment policy statement) without first consulting the Client
in connection with each transaction. DFM customizes discretionary portfolios for each Client, typically
consisting of the following security types:
● No load and/or load waived mutual funds
●
Exchanged traded and closed-end funds
● Common and preferred stocks
● Options
●
Exchange-traded real estate investment trusts, and master limited partnerships
● Certificates of deposit
● Corporate, municipal, and government bonds, notes and bills
When a Client retains DFM on a non-discretionary basis, the Client participates in all investment
decisions and account transactions. While DFM can make investment recommendations, only those
recommendations authorized by the Client are processed in the Client account. DFM customizes non-
discretionary portfolios for each Client, typically consisting of the following security types:
● No load and/or load waived mutual funds
● Exchanged traded and closed-end funds
● Common and preferred stocks
● Options
● Exchange-traded real estate investment trusts, and master limited partnerships
● Certificates of deposit
● Corporate, municipal and government bonds, notes and bills
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.
At no time will DFM 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.
Financial Planning Services
DFM provides
financial planning services alongside its investment advisor services, or pursuant to a
written financial planning agreement. Advisory Persons of DFM gather information on a Client’s current
financial status, future goals, and attitudes towards risk, through in-depth Client interviews and
documents supplied by the Client. Financial planning services may include some or all of the following:
● Financial projections
● Tax analysis
● Production of personal financial statements
● Investment reviews
● Estate planning
● Retirement planning and projections
● Education funding strategies
● Insurance needs analysis
Financial planning recommendations are not limited to any specific products or services offered by a
broker/dealer or insurance company. Clients can implement financial planning recommendations
through DFM or other avenues. DFM will normally schedule annual review meetings to discuss
performance of the Client’s account(s), to review the Client’s financial situation, and to document any
changes in the Client’s investment goals and objectives. To service our Clients, we utilize a network of
independent advisors including professionals in the fields of law, accounting, retirement plan
administration, investment management, insurance, real estate, and other specialties where appropriate.
Schwab Bank Pledged Asset Line®
The Advisor may introduce certain Clients to a Pledged Asset Line®, a non-purpose revolving line of
credit offered through Charles Schwab Bank, secured by eligible assets held in an account maintained at
the Custodian. (“Lending Program”). In such instances, the Client’s assets in their account[s] at the
Custodian will be utilized as collateral for a non-purpose revolving line of credit. The recommendation
of a Lending Program presents a conflict of interest as the Advisor will continue to receive investment
advisory fees for managing the collateralized assets in the Client’s account[s]. Clients are not obligated
to engage the Advisor for the Lending Program. For additional information related to the risks involved
with non-purpose loans, please see Item 8 – Methods of Analysis, Investment Strategies and Risk of
Loss.
Investment Manager Evaluation, Selection, and Monitoring
DFM evaluates and provides its Clients access to outside investment managers. Outside investment
managers identified by DFM typically offer an investment capability that DFM does not possess in-
house. When a Client decides to invest with an outside manager, it is done so at the sole discretion of the
Client, with the Client contracting directly with the outside manager. Once a Client selects an
investment manager, DFM, at least quarterly, measures the manager’s investing actions against the
stated investment mandate. DFM also provides performance evaluations and reporting on the account.
Investment manager selection factors include, but are not limited to, the following:
● Investment philosophy and style of manager
● Historical performance and volatility of returns
● Management fees
● Tax issues
● Account size
● Other Client investment managers or assets
The outside investment manager invoices the Client and typically deducts their fee from the account.
The minimum account size is dependent on the investment manager’s minimums and typically range
from $500,000 to $2,000,000. DFM deducts a separate fee which is described in
Item 5 – Fees and Compensation.
Retirement Plan Advisory Services
DFM provides 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:
• Investment Policy Statement (“IPS”) Design and Monitoring
• Investment Oversight Services (ERISA 3(21))
• Performance Reporting
• Ongoing Investment Recommendation and Assistance
These services are provided by DFM 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 DFM’s fiduciary status, the
specific services to be rendered and all direct and indirect compensation the Advisor reasonably expects
under the engagement.
Retirement Plan Education
DFM provides education to plan participants on investing, retirement planning, and other related
topics. DFM makes periodic presentations to plan participants, which include an interactive discussion
and educational materials for the audience.
Assets Under Management
As of December 31, 2023, DFM manages $258,977,565 in Client assets, of which $169,408,045 are
managed on a discretionary basis and $89,569,520 on a non-discretionary basis.