A. USA Financial Exchange was created in January 2016. We are registered as an investment adviser with the U.S Securities and
Exchange Commission (“SEC”) pursuant to the Investment Advisers Act of 1940, as amended (the “Advisers Act”). USA Financial
Exchange’s registration was approved on May 18, 2016. USA Financial Exchange is a wholly owned subsidiary of USA Financial
Corporation. Michael Walters and Brent Enders own USA Financial Corporation. Detailed information regarding our owners, directors,
and officers can be found by visiting: www.adviserinfo.sec.gov.
USA Financial Exchange’s core business is to offer operational support services (such as technology and marketing), and a turnkey
asset management program to independent, registered investment advisers (“RIAs”) for use with their clients (the “Clients”).
B. USA Financial Exchange provides registered investment advisors with a range of advisory and support services that investment
advisors and their representatives use in servicing their Clients.
Turnkey Asset Management Platform “TAMP”
USA Financial Exchange offers the ability for Registered Investment Advisors and their representatives to invest client assets
in two manners: Advisor Platform Manager (“APM”) or use USA Financial Exchange as a turn-key asset management platform
(“TAMP”). Investment advisors and their representatives are able to utilize both functions of the USA Financial Exchange platform
individually, or, in combination within client accounts.
The independent registered investment advisers that utilize them USA Financial Exchange platform are responsible for ensuring
that all investments are in their client’s best interest and for performing suitability related to transactions and money-manager
selection. At the time an account is opened, each investment adviser is responsible for obtaining each client’s financial information,
as well as information regarding their situation and investment objectives, as well as inquiring as to whether each client needs
to place any reasonable restrictions on the management of their account. Each investment adviser is also responsible for
implementing any reasonable restriction requests. It is important to communicate information that could impact each client’s
financial situation with their respective investment adviser. USA Financial Exchange urges clients to communicate any important
information to their financial adviser immediately. At least annually, each investment adviser is responsible for contacting all
Clients to determine whether there have been any changes in their financial situation or investment objectives and whether clients
wish to impose any reasonable restrictions on the management of the account or reasonably modify existing restrictions. At least
quarterly, investment advisers are responsible for notifying Clients in writing to contact the investment adviser if there have been
any changes in the Clients’ financial situation or investment objectives, or if the Clients wish to impose any reasonable restrictions
on the management of their accounts or modify any existing restrictions.
Turnkey Asset Management Platform “TAMP”
USA Financial Exchange also operates as a turn-key asset management platform. 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. USA
Financial Exchange identifies and conducts due diligence on each money manager before they are included in the TAMP. USA
Financial Exchange provides ongoing due diligence on each manager including evaluating the manager to determine if the
manager and investment vehicles meet style and allocation criteria.
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Advisor as Portfolio Manager “APM”
Representatives of investment advisors are able to allocate client assets to a specific sleeve within a client account that is set
aside from the rest of the assets in the account and protected from the impact of trades placed by money managers. APM
provides the investment adviser the ability to purchase a variety of individual holdings within a client account. The investment
adviser can invest these assets in holdings that are specific to the client’s individual investment objectives. The investment
adviser bears the responsibility of determining the appropriateness of the investment decisions made in individual client
accounts, as well as explaining the risks associated with these investment decisions and recommendations.
Operational Support Services
USA Financial Exchange offers operational and back-office support to investment advisers looking to operate independently through
third-party service providers and additional services USA Financial Exchange makes available directly to the investment adviser.
USA Financial Exchange leverages our technology- vendor relationships to provide investment advisers with comprehensive and
fully-integrated technology tools designed to enhance the Clients’ participation in the investment process and understanding of
their overall portfolio.
C. USA Financial Exchange does not provide investment advice directly to any Clients nor does the firm review or supervise investment
advisory transactions recommended by investment advisers. A Client’s investment adviser determines which services offered by USA
Financial Exchange to use and which managers in the TAMP to utilize with their Clients. Investment advisers may use the services
of other third-party providers in connection with the services provided by USA Financial Exchange. Therefore, Clients should consult
their investment adviser’s Form ADV Part 2 for a full description of that investment adviser’s specific use of USA
Financial Exchange’s
services.
Given that USA Financial Exchange’s business relationships are strictly with the investment advisers, the firm does not interact with
the Clients and the firm does not have any clients, other than investment advisers. USA Financial Exchange simply manages the
managers.
In all cases, it is the responsibility of the investment adviser, 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 investment adviser will use the TAMP
to allocate the Client’s assets among the available investment options. It is the investment adviser’s responsibility to determine that
the asset allocation and investment options are suitable for the Client. Also, it is the investment adviser’s responsibility to provide
clients with the necessary disclosure documents, including each chosen Subadviser’s ADV Disclosure Brochure. All subadvisers’ ADV
Disclosure Brochures can be found at www.usafinancial.com/forms-and-disclosures.
USA Financial Exchange determines which subadvisers to make available for investment on the TAMP and which subadvisers
to remove from the platform. USA Financial Exchange enters into subadvisory agreements with each manager/subadviser in the
TAMP. Investment advisers may independently identify subadvisers for participation in the TAMP. USA Financial Exchange may enter
subadvisory agreements with those managers once the firm has completed 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.
USA Financial Exchange periodically performs due-diligence reviews on platform subadvisers to ensure they adhere to established
goals and standards. As part of the due diligence, USA Financial Exchange reviews 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,
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the firm will address our concerns with the subadviser and if the concerns are not rectified or, are not rectifiable, USA Financial
Exchange will remove the subadviser from the platform. If this occurs the subadviser will typically be removed from the platform with
90 days’ notice to the investment advisers using that subadviser. However, under extreme circumstances, USA Financial Exchange
reserves the right to remove a manager from the platform immediately.
Many of the subadvisers create investment strategies where the subadviser constructs an asset allocation and selects the underlying
investments for each portfolio. From time to time, USA Financial Exchange may replace strategies or their subadvisers or hire new
subadvisers to create strategies. Therefore, USA Financial Exchange cannot guarantee the continuous availability of any particular
subadviser or strategy.
Amplify Platform
USA Financial Exchange utilizes the Amplify Platform. The Amplify Platform provides back-office operational support services
such as administrative, trading and reporting services and/or gain access to and select from independent third-party managers
available through the Amplify Platform.
USA Financial Exchange is considered a Platform Member. Platform Members may choose to receive certain back-office
services, such as administrative, trading and reporting services and/or to select independent third-party managers to manage
underlying client assets on a sub-advisory basis. Platform Members may choose to allocate all or a portion of their underlying
client’s assets among the different independent investment managers available through the Amplify Platform on a discretionary
basis. USA Financial Exchange does not make investment decisions for individual clients. Each client is invested according to the
recommendations made by the representative on their account(s).
Amplify provides access to an online portal where clients can view their accounts. This portal enables clients to see the holdings
in their account and generate certain reports regarding performance, values, and account history.
Amplify provides account opening services in conjunction with Docusign. Amplify provides the technical infrastructure to enable
representatives to complete account opening documentation online and obtain online client signatures.
Amplify provides reporting services, including performance reporting. The performance reporting calculated by Amplify is believed
to be correct, however, in the event of a discrepancy, the account information provided in the statement from the account custodian
will prevail. More information regarding the methodology used to arrive at performance figures can be found accompanying each
individual report.
USA Financial Exchanges requires investment advisers to utilize the various services available through the Amplify Platform.
Therefore, a portion of the fees clients incur is paid to the Amplify platform by USA Financial Exchange for these services.
D. USA Financial Exchange does not sponsor a wrap-fee program. All accounts across all custodians are set up on a non-wrap fee
schedule.
E. As of December 31, 2023, USA Financial Exchange maintained approximately $1,484,818,030 in discretionary Assets Under
Management on the platform. USA Financial Exchange does not provide investment advice directly to clients. USA Financial Exchange
curates a TAMP with full authority to determine which investment advisers and strategies to offer for investment on the platform.
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