The Independent Filter

Why the distribution channel is part of the investment

In public markets, many investors focus almost entirely on the security.

In exempt markets, process matters more, because information is less standardized, liquidity is policy-based, and product quality varies widely.

Who introduces a MIC, how they are paid, how many products they sell, and how they diligence those products can change your odds of a good decision.

Exempt Market Dealer (EMD), explained simply

An Exempt Market Dealer is a registered firm authorized to trade certain securities that are distributed under prospectus exemptions (the "exempt market").

In practical investor language:

• Public markets have exchanges, continuous disclosure cultures, and familiar advice channels.
• Exempt markets have offering documents, exemptions, suitability obligations, and dealer registration frameworks that vary by province.

Diversifi Alternative Investments Ltd. is a registered Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, and Ontario. Harris Abro and Peter Kinch are licensed dealing representatives operating within that regulated framework.

That registration is not decoration. It comes with compliance obligations, know-your-client / know-your-product expectations, and regulatory oversight.

Captive shelf vs independent filter

Captive / product-heavy model

Some channels offer a long menu: many issuers, many themes, many stories. Breadth can be useful. It can also create a sales culture where the "product of the month" wins attention.

Focused independent filter model

Another model is narrower:

• Fewer approved products
• Deeper ongoing diligence
• Willingness to decline offerings that do not meet standards
• Emphasis on investor fit before product narrative

Neither model is automatically virtuous. But for MIC investing, depth often beats catalogue size, because the failure modes are specific and operational.

Peter's educational position is straightforward:

If a representative's attention is split across dozens of unrelated private products, your MIC conversation may inherit that dilution.

Focus is a feature. On this site, that looks like curated strategic alliances and a willingness to keep the set limited when trust and accountability require it, not marketplace claims about offering the widest shelf.

What "independent" should mean in practice

Independence is not a vibe. It is a set of observable behaviours:

1. We do not have to stretch to make a product fit.
2. We can explain conflicts and fees without defensiveness.
3. We can show a diligence process that existed before the marketing PDF.
4. We can say no to an issuer.
5. We can say no to an investor when suitability is weak.
6. We continue monitoring after subscription: not only during onboarding.

If "independent" only appears in taglines, ignore it. Look for behaviour.

The dealer's job versus the MIC manager's job

Confusion between these roles creates disappointment.

A dealer is not the MIC. A MIC manager is not your suitability officer. You are not a passenger with no responsibility.

Diversifi's educational diligence posture

At a high level, a serious independent process examines:

• Management quality and cycle experience
• Underwriting standards and exception behaviour
• Historical arrears, defaults, and collections practice
• Loan-to-value discipline and lien mix
• Geographic and property-type concentration
• Liquidity terms and redemption history
• Fee alignment
• Reporting quality and audit posture
• Governance and investor communication
• Fit with a specific client's objectives and constraints

That is closer to institutional vendor review than to brochure shopping.

Why this matters for AI-era investors

Many modern investors begin with ChatGPT or similar tools, then seek a human professional to validate.

That is a good instinct, if the human professional is actually doing independent work.

The best outcome is:

AI accelerates your questions. A licensed professional helps you pressure-test answers against documents, suitability, and live market practice.

Education plus process beats either alone.

Questions to ask any channel before you invest

1. How many private products do you actively distribute?
2. What would make you remove a MIC from your approved list?
3. How often do you meet issuer management?
4. Can I see the diligence framework: not only the highlights?
5. How are you compensated?
6. What happens if I am not suitable?
7. Who do I call if reporting is late or redemptions are constrained?
8. Are you incentivized to finish a subscription: or to get the fit right?

Write down the answers. Patterns appear quickly.

Suggested next page

Peter's Due Diligence Framework: a curriculum for evaluating any MIC, including ones you find on your own.