ITEM 5 – FEES AND COMPENSATION
How We Are Compensated
The Firm is primarily compensated through the asset-based fees charged to clients for advisory
services. Clients participating in USCA RIA’s wrap fee program pay a single comprehensive or
“wrapped” annual fee for investment advisory services and brokerage execution services. This
fee is not based on the transactions that occur in the account, but rather on the account value.
Clients receiving portfolio management services outside of USCA RIA’s wrap fee program will pay
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USCA an asset-based fee for advisory services and will be charged additional fees and expenses
such as internal costs of underlying investments as well as any fees and expenses, including
transaction charges, charged by the firm where the accounts are maintained.
The specific fees charged to a client and compensation information is disclosed in the Client
Agreement for Advisory Services Specific Services Addendum (“CAS”) made part of the USCA
Client Advisory Agreement (“CAA”). USCA advisers, with supervisory oversight, are responsible
for determining the rate charged to each client based on factors such as total amount of assets
involved in the relationship, selection of program and services, any base rate charged for selected
third-party advisory account programs, and complexity and mix of the portfolio. This may result
in accounts of similar type and make up being charged different fees. The maximum allowed
wrap fee that a client can be charged is 3%. USCA advisers (or teams of advisers) receive a
portion (between 42%-48% of the asset-based fees charged by USCA RIA (after deduction of
expenses).
Clients receiving financial planning will be charged a fixed fee. For general advisory services,
clients may be billed a fixed or an asset-based fee. Financial planning fees are usually based
on the approximate amount of time the adviser anticipates the planning will require. USCA
advisers received a portion (generally 72%) of the financial planning fee charged by USCA RIA.
Fee Payment Processes
Generally, clients in wrap fee accounts will pay fees quarterly in advance through automatic
deductions from their accounts based on the total eligible assets under management. Fee-based
services on assets or accounts held away from USCA and FCCS may be invoiced and paid by
check or authorized debits as agreed to with the client.
Wrap fees are calculated by taking the total assets in a client’s wrap accounts, multiplying by the
fee rate, dividing by 365, and multiplying by the number of days in the quarter. Fee-based
accounts opened in mid-quarter will be assessed a pro-rated amount based on the number of
calendar days remaining in the quarter. If a client deposits assets (cash and/or securities) with a
market value of ten-thousand dollars ($10,000) or more in an account on any given day after the
inception of a calendar quarter the additional amount will become subject to fees before the end
of the quarter. If for any reason fees are not automatically billed, the Firm will manually bill the
affected accounts. Advisory fee billings will be reflected on the client’s account statement.
Financial planning and other fixed fees are invoiced in accordance with the written agreement
with the client. Financial planning fees are typical paid at the beginning of the relationship and
annually thereafter as the client renews the service.
Other Types of Fees and Expenses
Clients will be charged certain administrative and service fees based on activity in their accounts
These include account-related fees such as annual custody fees, wire fees, IRA maintenance and
termination fees, transfer of account fees, mailgram fees, reorganization fees, service fees, DRS
and certificate related fees, legal transfer and return fees, fees related to ACH, debit, and
checking features, stop payment and bounced check fees, and trade extension fees. Some of
these fees are charged to USCA by FCCS and passed on to clients directly. In other cases, USCA
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imposes a charge or adds to the FCCS charge. Your financial professional does not share in any
revenue from these charges. For a list of such fees please see the USCA Fee Disclosure at
https://www.uscallc.com/legal-and-compliance.
Clients will also be responsible for the following costs, which may be priced into their
investments: (i) dealer markups, markdowns or spreads; (ii) costs relating to trading in certain
foreign securities; and (iii) the internal charges and fees that may be imposed by any collective
investment, such as mutual funds and closed-end funds, unit investment trusts, exchange-traded
funds or real estate investment trusts.
In addition to the costs noted above, clients may incur brokerage commissions or other charges,
including contingent deferred sales charges (“CDSC”), imposed upon the liquidation of “in-kind
assets” that are transferred to a managed account program and liquidated. Note that if the
liquidation of in-kind assets occurs in a fee-based account at USCA then USCA will not receive
any additional compensation in connection with such transactions. If the liquidation occurs in a
brokerage account at USCA then USCA and the client’s adviser will generally receive
compensation. Clients should be aware that if they transfer in-kind assets into a managed
program, the assets may be liquidated immediately or at a future point in time which may incur
a charge such as a CDSC. Whether any part of the CDSC charge is paid as compensation to USCA
and the client’s adviser depends on the specific mutual fund, details will be disclosed in the
mutual fund’s prospectus or may be provided by your USCA adviser or a USCA supervisor. Clients
may also be subject to taxes upon the liquidation of such assets. Clients should consult with their
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