As an SEC registered investment adviser, Exchange provides investors access to a variety of investment options on a platform that offers flexible choices through their independent registered investment adviser (“RIA”). We do not have retail investors; but offer operational support services, business support services (such as technology and marketing), and a turnkey asset management program to independent RIAs for use with their retail investors. We do not provide investment advice directly to retail investors. We do not review or supervise your RIA’s investment recommendations. In all cases, your independent RIA is responsible for managing and monitoring the asset managers selected on Exchange’s platform. Your financial advisor is responsible for providing you with the necessary disclosure documents, including each chosen subadviser’s ADV Disclosure Brochure. All subadvisers’ ADV Disclosure Brochures can be found at www.usafinancialexchange.com/adv.
The investment options available on Exchange’s platform are managed by third party "subadvisers," with whom Exchange has sub-advisory agreements. Exchange performs due-diligence reviews on subadvisers to ensure they adhere to established goals and standards, initially and periodically. Exchange’s investment committee periodically reviews manager performance, as well, to ensure fit and relevance. Many of the subadvisers create investment models or model portfolios where the subadviser constructs an asset allocation and selects the underlying investments for each portfolio. From time to time, we may replace existing model portfolios or their subadvisers or hire new subadvisers to create model portfolios. We do not guarantee the continuous availability of any subadviser or model portfolio.
USA Financial Exchange is a subsidiary of USA Financial Corporation. USA Financial Corporation has several other subsidiaries – all of which are affiliated entities of USA Financial Exchange.
We provide RIAs with a range of advisory and support services that RIAs use in servicing their Clients. Specifically, we offer:
We offer operational and back-office support to RIAs looking to operate independently through third-party service providers and additional services we make available directly to the investment adviser. We leverage our relationship with E*Trade Advisory Services (“EAS”) so that RIAs can access a platform they might not otherwise have access to because of various factors such as technology-integration limitations and lower levels of assets under management. We are also able to leverage our technology-vendor relationships to provide RIAs with comprehensive and fully-integrated technology tools designed to enhance the Clients' participation in the investment process and understanding of their overall portfolio. Additionally, because of our familiarity with EAS’s platform, we may assist RIAs in answering operational questions related to establishing strategies on the platform and/or account maintenance questions, processing trade requests, or providing support in account billing.
Through our affiliated entities, we offer various business support services to independent RIAs. Through our affiliated marketing company, USA Financial Marketing, we provide marketing resources to RIAs and because of relationships our other registered, affiliated entities, USA Financial Securities Corporation and USA Financial Formulas Corporation, have forged, we are able to offer RIAs access to technology resources. USA Financial Exchange does not provide compliance consulting or compliance services to investment advisers – each independent adviser is responsible for its own compliance and for understanding and complying with all applicable laws, rules, and regulations.
A TAMP is a collection of money managers made available to investment professionals through a single platform. The goal of a TAMP is to make investing client assets more streamlined and efficient. For example, if a client wants to invest with three different money managers, instead of opening three separate accounts – one direct with each money manager – the client can open one account through the TAMP and hold all of three money managers within one account. Not all TAMPs offer the same collection of money managers. We identify and conduct due diligence on each money manager before they are included in the TAMP. We provide ongoing due diligence on each manager including evaluating the manager to determine if the manager and investment vehicles meet style and allocation criteria.
We do not provide investment advice directly to any RIA’s Clients nor do we review or supervise investment advisory transactions recommended by the RIA. A Client’s RIA determines which of our services to use and which managers in the TAMP to utilize with their Clients. RIAs may use the services of other third-party providers in connection with the services we provide. Therefore, Clients should consult their RIA’s Form ADV Part 2 for a full description of that RIA’s specific use of our services.
Given that our business relationships are strictly with the RIAs, we do not interact with the Clients and we do not have any clients, other than RIAs. USA Financial Exchange operates multi-manager composites, but in all cases a subadviser is the direct manager of client assets; USA Financial Exchange simply manages the managers.
In all cases, it is the responsibility of the RIA, together with its Client, to gather the pertinent financial and demographic information to develop the investment plan that meets the Client’s goals and objectives. The RIA will use the TAMP to allocate the Client’s assets among the available investment options. It is the RIA’s responsibility to determine that the asset allocation and investment options are suitable for the Client. Also, it is your financial adviser’s responsibility to provide you with the necessary disclosure documents, including each chosen Subadviser’s ADV Disclosure Brochure. All subadvisers’ ADV Disclosure Brochures can be found at www.usafinancialexchange.com/adv.
We enter into subadvisory agreements with each manager/subadviser in the TAMP. RIAs may independently identify subadvisers for participation in the TAMP. We may enter subadvisory agreements with those managers once we have completed our due diligence and determined that the subadviser can be included in the TAMP. The decision to add or remove any subadviser from the TAMP is made in USA Financial Exchange’s sole discretion. Each subadviser has responsibility for trading the accounts invested in accordance with that manager’s strategy. In some cases, USA Financial Exchange may take orders directly from the subadviser and execute those orders on the subadviser’s behalf.
We periodically perform due-diligence reviews on platform subadvisers to ensure they adhere to established goals and standards. As part of our due diligence, we review information relating to the subadviser including, historical performance, investment philosophy, investment style, volatility, and disclosures contained in the subadviser’s regulatory filings such as Form ADV. If a subadviser is consistently deviating or underperforming compared to other similarly-situated subadvisers, we will address our concerns with the subadviser and if our concerns are not rectified or, are not rectifiable, we will remove the subadviser from our platform. If this occurs the subadviser will typically be removed from the platform with 90 days’ notice to the RIAs using that subadviser. However, under extreme circumstances, we reserve the right to remove a manager from the platform immediately.
Many of the subadvisers create investment models or model portfolios where the subadviser constructs an asset allocation and selects the underlying investments for each portfolio. From time to time, we may replace existing model portfolios or their subadvisers or hire new subadvisers to create model portfolios. Therefore, we cannot guarantee the continuous availability of any particular subadviser or model portfolio.