A little more than a month after unveiling a new name and organizational model, Diversify Advisor Network (formerly DFPG Investments) has established its W-2 division with the acquisition of three firms managing more than $2.1 billion in total assets.
Each had a previous, long-standing relationship with DFPG before electing to sell their companies and join Diversify Wealth Management, a hybrid model. Independent firms are purchased with a mix of cash and equity, while leadership and staff are brought on as employees.
One of the transactions involved DFPG founders Ryan Smith and Dan Luke, who sold their hybrid RIA, Diversify Inc., with $750 million into the new platform. Luke will serve on the Diversify Advisor Network board.
Half an hour southeast of its Sandy, Utah headquarters, Diversify has also picked up two firms previously offering securities through DFPG—Caliber Wealth Management and FirstPurpose Wealth in Orem.
Founded by David Gardner and Todd Nuttall in 2013, Caliber provides investment management, financial planning and retirement plan advisory services for more than 500 clients with around $443 million in assets and has a niche focus on entrepreneurs and executives.
FirstPurpose was created in 2007 by Tim Whipple and Ken Brown and comprises a team of 30, including an in-house tax practice, overseeing about $928 million in client assets—approximately half of which is managed for around 1,300 clients under its RIA. Whipple is also joining the Diversify board.
Following the reorganization last year, the new division sits alongside Diversify’s legacy broker/dealer—still DFPG Investments—and an independent registered investment advisory affiliate platform called Diversify Advisory Services. The reorganization was intended to provide more affiliation options and a clear succession path for independent advisors who may be conflicted about joining a large acquirer or selling to a private equity firm, according to Diversify Advisor Network CEO Ryan Smith.
“We’ve wasted no time executing our strategy of developing a multi-platform affiliation model—and there are more coming,” he said in a statement Tuesday. “We strive to be the forever home for highly successful advisors, whether they want to retain their independence or monetize their practices through a more aligned channel.”
“These acquisitions were very strategic,” added Chief Strategy Officer Stuart Matheson. “They each bring a unique expertise that will allow us to provide expanded services in a single framework. While Diversify Wealth Management advisors are technically W-2 employees, they aren't assets to us in some roll-up strategy. They are partners with significant equity stakes who are truly aligned and carefully selected.”
With the latest additions, the Diversify Advisor Network oversees more than $7 billion in assets across all three business lines. Smith said the company is well capitalized to continue making “thoughtful” acquisitions without the need to take on private equity or other external funding.