There are, necessarily, conflicts of interest that arise in the financial services industry. A conflict of interest is anything that could cause USA Financial Exchange to place it’s interests ahead of yours. These conflicts are found everywhere in our industry, but we try to mitigate them and disclose them to you so that you are informed. Your best interest is our primary concern. In this section, we disclose conflicts that you should understand and consider before investing.
Primarily, we benefit from the services we provide to you because of the fees we receive from you. This compensation may vary based on different factors, such as the size of your account or the strategy you select. Some subadvisors pay us a portion of their revenue based on breakpoints. This could create a conflict as we have an incentive to recommend you invest your assets in these strategies; however, since we generally do not solicit accounts, we believe this conflict is mitigated. The more assets that are in your advisory account, the more you will pay in fees, and we may therefore have an incentive to encourage you to increase the assets your account.
Recruiting arrangements in the financial services industry are not uncommon – whether the payment is up front or in the form of additional compensation through affiliated entities. USA Financial does not offer up front recruiting bonuses. We do provide our advisers with transition support dollars to help with the cost and loss of revenue associated with moving brokerage or advisory firms. We also want our advisers to feel like partners. Therefore, USA Financial created the Advisor Legacy program. The Advisor Legacy program has many components, but most important in terms of conflicts, is the Advisor SHARES program. Advisor SHARES grants ownership interest to USA Financial’s qualified advisers based on revenue submitted to USA Financial. We do not favor one product or product category over another – advisers earn shares based on volumes submitted across the products and services our company offers. However, you need to be aware of this program because it is an incentive for advisers to move to USA Financial and place business with our firm. We believe we mitigate this risk by not favoring one product over another and maintaining strict suitability reviews and standards to ensure that all transactions are in your best interest.
USA Financial Exchange does not utilize investment adviser representatives – meaning that we have no individual financial advisers registered as representatives with our firm. However, our affiliate, USA Financial Securities, does have investment adviser representatives who may use USA Financial Exchange’s services. USA Financial Securities’ investment adviser representatives may also have access to technology not available to independent RIAs simply based on the fact that USA Financial Securities bundles technology applications and offers it to its representatives as a package, thereby permitting USA Financial Securities to take advantage of economies of scale through the technology vendors.
The individual subadvisers available on USA Financial Exchange’s platform may use different fee schedules for assets invested directly compared to assets invested through USA Financial Exchange. As a result, you and other clients could be paying more or less by accessing the money manager through USA Financial Exchange.
USA Financial Exchange’s chief compliance officer is available to answer any questions you may have regarding our company or any potential conflicts of interest.