# RUSSELL INVESTMENTS IMPLEMENTATION SERVICES, LLC X-17A-5 (2026-03-02) — Broker-dealer annual report - Company: RUSSELL INVESTMENTS IMPLEMENTATION SERVICES, LLC - Form: X-17A-5 - Filed: 2026-03-02 - Period: 2025-12-31 - Accession: 0000085816-26-000004 - CIK: 85816 - File #: 8-00220 - Type: Broker-dealer - Material weakness: Yes - Auditor: RSM US LLP - Auditor location: Chicago, IL - Contact: David Siegel - Phone: (206) 505-2716 - Email: dsiegel@russellinvestments.com - Website: russellinvestments.com - Signed by: David Siegel (Financial & Operations Principal) Original filing: https://www.sec.gov/Archives/edgar/data/85816/000008581626000004/riis2025bspublic.pdf --- {0}------------------------------------------------ # Russell Investments Implementation Services, LLC Statement of Financial Condition December 31, 2025 Filed as Public information pursuant to Rule 17a-5(d) Under the Securities Exchange Act of 1934 {1}------------------------------------------------ | | (No. and Street) | | | |--------------------------------------------------|------------------------------------------------------------|---------------------------------------------------------------------------|--------------------------------------------| | Seattle | WA | | 98101 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | David Siegel | (206) 505-2716 | | dsiegel@russellinvestments.com | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | RSM US LLP | | | | | 30 South Wacker Drive, St 3300 Chicago | (Name - if individual, state last, first, and middle name) | | 98101 | | (Address) | (City) | (State) | (Zip Code) | | 9/24/2003 | | 49 | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | {2}------------------------------------------------ - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ # Russell Investments Implementation Services, LLC Table of Contents December 31, 2025 | | Page(s) | | |---------------------------------------------------------|---------|--| | Report of Independent Registered Public Accounting Firm | 1 | | | Financial Statements | | | | Statement of Financial Condition | 2 | | | Notes to Financial Statements
| 3-13 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## Report of Independent Registered Public Accounting Firm To the Board of Directors and the Member of Russell Investments Implementation Services, LLC ## Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Russell Investments Implementation Services, LLC (the Company) as of December 31, 2025, and the related notes (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. ## Basis for Opinion This financial statement is the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. 1 We have served as the Company's auditor since 2020. Chicago, Illinois March 2, 2026 {5}------------------------------------------------ # Russell Investments Implementation Services, LLC Statement of Financial Condition December 31, 2025 | Russell Investments Implementation Services, LLC | | |--------------------------------------------------|------------------| | Statement of Financial Condition | | | December 31, 2025 | | | | | | | | | | | | Assets | | | Cash and cash equivalents | \$
33,143,760 | | Cash segregated under federal regulations | 2,524,177 | | Securities commissions receivable, net | 7,933,238 | | Fees receivable | 8,319,744 | | Investments at fair value | 8,856,490 | | Prepaid expenses and other | 698,998 | | Due from affiliates | 12,081,654 | | Deferred income taxes, net | 24,375,135 | | Total assets | \$
97,933,196 | | Liabilities and
Member's
Equity | | | Liabilities | | | Commission credits payable to customers | \$
913,844 | | Compensation payable | 1,796,288 | | Accrued expenses | 187,887 | | Payable to brokers and subadvisors | 1,982,912 | | Due to affiliates | 12,538,361 | | Taxes payable | 491,686 | | Other liabilities | 546,983 | | Total liabilities | 18,457,961 | | Guarantees and contingencies (Notes 9 and 10) | | | Member's
equity | | | Member's equity | 45,286,507 | | Retained earnings | 34,188,728 | | Total
member's
equity | 79,475,235 | | Total liabilities and member's equity | | | | \$
97,933,196 | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ # Russell Investments Implementation Services, LLC ## Notes to Financial Statements December 31, 2025 ## Nature of Business 1. Nature of Business and Significant Accounting Policies Russell Investments Implementation Services, LLC, a Washington limited liability company (the "Company"), is part of Russell Investments, the marketing name used to represent Russell Investments Group, Ltd. ("Russell Investments Group") and its global subsidiaries. The Company is a wholly owned subsidiary of Russell Investments US Institutional Holdco, Inc. ("RIUIH" or "Member"), which is ultimately owned by Russell Investments Group. The Company is a Limited Liability Company ("LLC"). Liabilities of the Company are not the liabilities of its Member beyond the extent of the Member's equity in the Company. The Company, a broker-dealer registered pursuant to the Securities Exchange Act of 1934, is a member of the Financial Industry Regulatory Authority ("FINRA") and a member of the Securities Investor Protection Corporation ("SIPC"). The Company is also registered as a municipal securities dealer with the Municipal Securities Rulemaking Board ("MSRB"). In addition, the Company is registered as an investment adviser with the Securities and Exchange Commission ("SEC"). The Company provides investment management services as well as agency trading services, collectively asset management services, to its customers. Company's control systems, business development and oversight programs. The Company has commission recapture arrangements with customers and holds customer cash balances. Accordingly, the Company is subject to SEC rule 15c3-3 pertaining to the possession or control of customer assets and reserve requirements. ## Risks and Uncertainties Volatility and disruption of the capital and credit markets, adverse changes in the US and global economy and political uncertainty, may significantly affect the Company's results of operations and may put pressure on the Company's financial results. The business and regulatory environments in which the Company operates remain complex, uncertain and subject to change. The Company is subject to various laws, rules and regulations globally that impose restrictions, limitations and registration, reporting and disclosure requirements on its business and add complexity to its compliance operations. Legislative and regulatory changes, regulatory risk alerts and industry intelligence relating to regulatory examinations continue to drive analysis and enhancements of the United States of America ("GAAP") requires management to make estimates and assumptions that affect ## Business Segments The Company accounts for operating segments in accordance with Accounting Standards Codification ("ASC") 280, Segment Reporting, and operates in a single reportable segment, which is the provision of asset management services. The Chief Operating Decision Maker ("CODM"), which consists of the Board of Directors of the Company, reviews financial information of the Company to assess performance and allocate resources. ## Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are inherent in the preparation of the financial statements. Actual results could differ materially from those estimates. ## Cash and Cash Equivalents and Cash Segregated Under Federal Regulations Cash and cash equivalents consist of nonconsolidated sponsored money market funds and deposits with financial institutions, and are carried at fair value. Due to the short-term nature and liquidity of these {7}------------------------------------------------ financial instruments, the carrying values of these assets approximate fair value. The Company considers all money market funds and instruments with original maturities of three months or less at the purchase date as cash equivalents. Cash is held at financial institutions in excess of Federal Deposit Insurance Corporation ("FDIC") limits. The Company limits the amount of credit exposure with any given financial institution and conducts ongoing evaluations of the creditworthiness of the financial institutions with which it does business. Cash segregated under federal regulations is kept in a special account for the exclusive benefit of the Company's customers under Rule 15c3-3 of the Securities Exchange Act of 1934 "(SEC Rule 15c3-3"), Computation for Determination of Reserve Requirements. The Company maintains custody of customer funds and is obligated by rules and regulations mandated by the SEC to segregate or set aside cash and or qualified securities to satisfy these regulations, which have been promulgated to protect customer assets. At December 31, 2025, the Company only held customer cash noted above. There were no customer securities held as of December 31, 2025. ## Investments Investments include investments in treasury bills. These investments are reported at fair value in accordance with ASC 820. These investments are currently on deposit with certain clearing brokers. #### Fair Value Measurements In accordance with ASC 820, Fair Value Measurement, the Company discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The fair value disclosure framework prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value into three broad levels. In some instances, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics and other factors. The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The categorization within the hierarchy is based upon the pricing transparency of the financial asset or liability and does not necessarily correspond to the Company's perceived risk or liquidity. See Note 3. ## Revenue Recognition The recognition and measurement of revenue is based on the assessment of contracts with customers and recorded in accordance with ASC 606, Revenue from Contracts with Customers ("Topic 606"). Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects consideration to which the Company expects to be entitled in exchange for those services. The Company enters into contracts that can include multiple services, which are accounted for separately if they are determined to be distinct. In determining the transaction price, the Company considers multiple factors, including whether constraints on variable consideration should be applied due to uncertain future events. For some contracts, the Company has discretion to involve a third party in providing services to a customer. #### Securities commissions Securities commissions are generated entirely from brokerage activities for transition services, trading and execution and commission recapture services. For securities commissions, the Company believes that the performance obligation is satisfied on the trade date as that is when the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. {8}------------------------------------------------ ## Transition services Transition services consists of facilitating changes to a client's portfolio. These changes include changing asset allocation or changes in asset managers. Compensation for this performance obligation consists of brokerage fees charged for trades to carry out the transition, project fee or assets under management fees. The Company is the principal in these arrangements as it is responsible for the execution of the trades and completing the transition. #### Trading and execution Trading and execution consists of providing trading and FX brokerage services to customers and affiliated. FX brokerage is designed to help customers reduce costs, improve transparency and diversify counterparty risk. Compensation for this performance obligation consists of brokerage fees charged for trades. The Company is the principal in these arrangements as it is responsible for the execution of the trades. #### Commission recapture Commission recapture is a program that enables customers to minimize transaction costs by requesting that investment managers send specific trades through the Company by using the Company brokerage services or one of the brokers included in the Company's network. The Company receives a commission or a portion of the fees paid to the brokers and remits a contractually agreed upon percentage to the client. The Company is the agent in these arrangements as the broker is ultimately responsible for the execution of the trades. #### Distribution and shareholder servicing fees Distribution and shareholder servicing fee revenue represents distribution, sales and marketing activities performed for affiliates. Compensation for this performance obligation is generally calculated as a percentage of Assets Under Management ("AUM"). This performance obligation is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. The Company is the principal in these arrangements as it is responsible for providing the distribution and sales and marketing services. #### Investment management fees Investment management fee revenues consist of investment management services, overlay services, currency management services and interim investment management. {9}------------------------------------------------ #### Investment management services Investment management services represent fees charged to customers for discretionary and nondiscretionary management of investment portfolios and managed accounts. Compensation for this performance obligation is generally calculated as a percentage of AUM. This performance obligation is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. The Company is the principal in these arrangements as it is responsible for and determines the level of service provided to the client. calculated as a percentage of average notional exposure of the fair value of the client's assets included in #### Overlay and currency management services Overlay management services represent fees charged to customers for an overlay program that supports a broad range of derivatives-based solutions. Compensation for this performance obligation is generally the overlay program. This performance obligation is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. The Company is the principal in these arrangements as it is responsible for and determines the level of service provided to the client. As additional consideration for overlay services, the Company receives fees that vary based on specified performance measures. These performance based fees are considered variable consideration. Revenue is recognized when it is probable that a significant reversal will not occur. Currency management services represents fees charged to customers for a currency management program that uses solutions to remove unintended exposures for a client's currency and/or add intended exposure. Compensation for this performance obligation is generally calculated as a percentage of average notional exposure of the fair value of the client's assets included in the currency management program. This performance obligation is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. The Company is the principal in these arrangements as it is responsible for and determines the level of service provided to the client. Interim investment management represents fees charged to customers for management of a client's performance obligation is generally calculated as a percentage of the AUM of the client's portfolio under #### Interim investment management services portfolio for a short period of time to allow for a transition to a new manager. Compensation for this interim management. This performance obligation is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. The Company is the principal in these arrangements as it is responsible for and determines the level of service provided to the client. #### Other fee revenue Other fee revenue includes investment services provided to customers of affiliates. These services are based on AUM and are recognized as the performance obligations are satisfied over time. The Company is the principal in these arrangements as it is responsible for providing the investment services. {10}------------------------------------------------ ## Contract Balances The timing of the Company's revenue recognition may differ from the timing of payment by its customers. The Company records receivables when revenue is recognized prior to payment and it has an unconditional right to payment. The Company had receivables related to revenue from contracts with customers (net of allowance for credit losses) of \$16,917,622 at January 1, 2025 and \$16,252,982 at December 31, 2025 included in securities commissions receivable, net and fees receivable. ASU 2016-13, Financial Instruments - Credit Losses ("Topic 326") impacts financial instruments that are carried by the Company at amortized cost such as securities commissions receivable and fees receivable. Expected credit losses will be measured based on historical experience, current conditions and forecasts that affect the collectability of the reported amount. The Company had an allowance for credit losses of \$5,998 at December 31, 2025. ## Income Taxes The Company is a single-member limited liability company classified as a disregarded entity and is included in the U.S. federal and separate state income tax returns with RIUIH, and combined state returns with Russell Investments US Retail Holdco, Inc. ("RIURH"). RIUIH and RIURH allocate these income taxes to the Company using the separate return method. Federal income taxes payable are included in due to affiliates. Federal income taxes receivable are included in due from affiliates. State income taxes payable are included in taxes payable and due to affiliates. State income taxes receivable are included in prepaid expenses and other and due from affiliates. Consistent with the separate company method, and other than described above, deferred tax assets and liabilities are recorded for temporary differences between the tax basis of the Company's assets and liabilities and the reported amounts in the financial statements using the statutory tax rates in effect for the year when the reported amount of the asset or liability is expected to be recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. For each tax position taken or expected to be taken in a tax return, the Company determines whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. The Company recognizes the accrual of tax and interest on uncertain tax positions as a component of income tax expense. The Company's reporting currency is the U.S. Dollar. Foreign currency transaction gains and losses arise The Company's exposure to credit risk associated with nonperformance of customers in fulfilling their markets, which may impair customers' ability to deliver assets sufficient to settle their obligations for the ## Foreign Currency Transactions from payments in currencies other than U.S. Dollars. Gains and losses resulting from foreign currency transactions are included in other operating expenses, on a net basis, in the accompanying statement of operations. ## Financial Instruments With Off-Balance Sheet Credit Risk As a securities broker, the Company is engaged in buying and selling securities for a diverse group of institutional investors. The Company introduces these transactions for clearance to other broker-dealers on a fully disclosed basis. contractual obligations pursuant to securities transactions can be directly impacted by volatile trading original contracted amount. The agreements between the Company and its clearing brokers provide that the Company is obligated to assume any exposure related to such nonperformance by its customers. As the right to charge the Company has no maximum amount and applies to all trades executed through its clearing brokers, the Company believes there is no maximum amount assignable to this right. At December 31, 2025, the Company has recorded no liabilities with regard to the right. In addition, the Company has {11}------------------------------------------------ the right to pursue collection or performance from the customers who do not perform under their contractual obligations. The Company monitors its risk on these transactions on both an individual and group basis. ## Stock-Based Compensation Russell Investments Group has a Long-term Equity-Based Incentive Plan ("LTIP") covering eligible employees of the Company, as more fully described in Note 6. Equity-classified awards are measured at fair value as of the grant dates or modification dates and the resulting cost is recognized in the statement of operations over the period from the date of grant to the date when the award is no longer contingent upon the employee providing additional service (the required service period). For awards that vest upon retirement, the required service period does not extend beyond the date an employee is eligible for retirement. This situation can result in compensation expense being recognized over a period less than the stated vesting period. ## New Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update requires enhanced income tax disclosures to provide information to better assess how an entity's operations, related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This was adopted by the Company in 2025. In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures ("Subtopic 220-40"). The update requires disclosures in the notes to the financial statements of specified information about certain costs and expense and is effective for the Company in 2027. The Company is in the process of assessing this update, and the impact it will have to the financial statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses ("Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The update provides all entities with a practical expedient and entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions accounted for under Topic 606. The update is effective for annual reporting periods beginning after December 15, 2025 and is effective for the Company on a prospective basis beginning in 2026. The update is not expected to have a significant impact on the Company's financial statements. 2. Segment Reporting 3. Assets and Liabilities Measured at Fair Value on a Recurring Basis The asset management services reporting segment derives revenues from customers by providing investment management, securities commissions and distribution and shareholder servicing services. The accounting policies of the asset management services reporting segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the statement of financial condition as total assets. The significant expense categories included in the reported measure of segment profit or loss that are regularly provided to the CODM are the categories presented on the statement of operations. Other operating expenses primarily include other taxes and regulatory expenses, external education and training expenses, recruiting fees and insurance expense. The CODM does not receive additional expense information beyond what appears on the face of the statement of operations. The Company carries investments in money market funds and treasury bills at fair value in the statement of financial condition. The fair value for money market funds is measured on a recurring basis using a market approach based on published net asset values. The fair value of treasury bills is measured on a recurring basis using a market approach that uses the interest rate and maturity of the treasury bills. {12}------------------------------------------------ # Russell Investments Implementation Services, LLC Notes to Financial Statements December 31, 2025 Level 1 Inputs are quoted prices (unadjusted) in active markets or exchanges for identical assets or Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on the lowest level of input that is significant to the fair value measurement in its entirety: - liabilities. - liability, either directly or indirectly as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. - Level 3 Inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Assumptions used by the Company due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Company's results of operations. The following table summarizes the valuation of the Company's assets measured at fair value on a Level 1 Level 2 Level 3 Total ## Fair Value Tabular Disclosures | | | liabilities. | | | | | |--------|---------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|-----------------|---------|----------------------------------| | | | liability, either directly or indirectly as of the reporting date, and fair value is determined through
the use of models or other valuation methodologies. | | | | | | | | measure fair value to the extent that observable inputs are not available, thereby allowing for
situations in which there is little, if any, market activity for the asset or liability at the
measurement date. The inputs into the determination of fair value require significant
management judgment or estimation. Assumptions used by the Company due to the lack of
results of operations. | | | | | | | | Fair Value Tabular Disclosures | | | | | | | | recurring basis using the fair value hierarchy levels as of December 31, 2025: | | | | | | | | | Level 1 | Level 2 | Level 3 | Total | | Assets | | | | | | | | | | Cash and Cash Equivalents | | | | | | | | Money market mutual funds | \$
33,143,760 | \$
— | \$
— | \$
33,143,760 | | | Investments at fair value | | | | | | | | Treasury bills | | — | 8,856,490 | — | 8,856,490 | | Total | | | \$
33,143,760 | \$
8,856,490 | \$
— | \$
42,000,250 | | | | For the year ended December 31, 2025, there were no transfers among levels. | | | | | | 4. | | Current and Deferred Income Taxes | | | | | | | | The tax effects of temporary differences that gave rise to the net deferred income tax assets as of
December 31, 2025, are presented below: | | | | | | | | Deferred income tax assets
Tax deductible goodwill
Accrued incentive plan
Uncertain tax benefits | | | \$ | 23,417,408
841,270
113,334 | | | Other | Total deferred income tax assets | | | \$ | 3,123
24,375,135 | | | | | | | | | | | | Deferred tax assets include tax deductible goodwill resulting from a deemed asset purchase of the | | | | | | | | Company in 2016. | | | | | | | | | | | | | | | | | | | | | | Deferred income tax assets | | |----------------------------|--| | | | | | | | | | | | | | | | {13}------------------------------------------------ | | Russell Investments Implementation Services, LLC
Notes to Financial Statements
December 31, 2025 | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------------------------------------------| | | Federal income taxes payable to RIUIH as of December 31, 2025 are \$4,829,838 and are included in due | | | | | to affiliates. State income taxes payable as of December 31, 2025 are \$491,686 and included in taxes
payable. | | | | The Company and its parent are subject to federal examination for the period ended December 31, 2022
and subsequent years. The Company remains subject to examination by state jurisdictions for the period
ended December 31, 2021 and subsequent years. | | | | | | The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits as of
December 31, 2025: | | | | | Balance at January 1, 2025 | \$ | 630,184 | | | Additions based on tax positions related to the current year | | 14,305 | | | Expiration of Statute of Limitations | | (252,232) | | | Balance at December 31, 2025 | \$ | 392,257 | | 5. | Benefit Plans | | | | | The Company participates in the Russell Investments Retirement Plan (the
plan covering eligible employees. The Plan is sponsored by Russell Investments Group, LLC ("RI"), a
subsidiary of Russell Investments Group, and allows for contributions to be made out of the
operating profits at the discretion of the Board of Directors. Employees may also contribute a percentage of
their compensation as defined by the Plan. | "Plan"), | a defined contribution
Company's
net | | 6. | Employee Compensation Arrangements | | | | | LTIP | | | | | The Company participates in the Russell Investments Group LTIP covering eligible employees. The LTIP
provides for the award of stock options in Russell Investments Group's common stock. The maximum | | | ## LTIP The Company participates in the Russell Investments Group LTIP covering eligible employees. The LTIP provides for the award of stock options in Russell Investments Group's common stock. The maximum number of shares of Russell Investments Group common stock that are issuable, or are issued and outstanding, cannot exceed 4,916,000 shares of common stock. Awards that are canceled, forfeited, terminated or otherwise settled by the holder or by Russell Investments Group are available for award under the LTIP, subject to the above limitations. Stock options that time vest generally vest over five years, either quarterly over five years or 40% on the second anniversary date and the remaining 60% over 36 months in equal monthly installments. Stock options that vest upon performance vest 1/3 on the applicable earned reference date and the remaining 2/3 vest in two equal annual installments on each of the first anniversary and second anniversary of the earned reference date. Stock options generally expire 10 years from the date of grant. Certain awards vest earlier upon employee's retirement eligibility. Russell Investments Group estimates the fair value of stock options using the Black-Scholes option pricing model, which requires, among other inputs, an estimate of the fair value of Russell Investments Group common stock on the date of grant and the expected volatility of the common stock over the expected term of the related grants. Stock options are granted with an exercise price equal to the per share fair value of Russell Investment's common stock at the date of grant. Russell Investments Group has determined that it was not practicable to calculate the volatility of its share price since its securities are not publicly traded and therefore, there is no readily determinable market value for its stock. Therefore, Russell Investments Group estimates its expected volatility based on reported market value data for a group of publicly traded companies, which it selected from certain market indices, that Russell Investments Group believes are {14}------------------------------------------------ relatively comparable after consideration of their size, stage of lifecycle, profitability, growth and risk and return on investment. Russell Investments Group uses the average expected volatility rates reported by the comparable group for the expected terms it estimates. The expected terms of the stock options are derived from the average midpoint between the vesting and contractual term. The risk-free rate for the expected term of the awards is based on the U.S. Treasury yield curve at the time of grant. The expected annual dividend yield was based on Russell Investment's current dividend yield. As of December 31, 2025, the Company's total unrecognized compensation cost related to nonvested awards is \$372,609, which will be recognized over the weighted-average remaining requisite service period of 2.54 years. The Company records a liability for the employer's portion of payroll taxes on stock-based compensation under the LTIP on the date of the event triggering the measurement and payment of the tax to the taxing authority. Details related to stock option activity under the LTIP, representing the Company's equity-classified awards, | contractual term. The risk-free rate for the expected term of the awards is based on the U.S. Treasury yield
curve at the time of grant. The expected annual dividend yield was based on Russell Investment's current
dividend yield. | | | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-----------------------------------------|-----------------------------------------------------------------|--| | Russell Investments Group records expense on the graded method of attribution, net of expected
forfeitures. The expense for the year ended December 31, 2025 was reduced by an estimated forfeiture
rate of 3%. | | | | | | | As of December 31, 2025, the Company's total unrecognized compensation cost related to nonvested
awards is \$372,609, which will be recognized over the weighted-average remaining requisite service period
to the taxing authority. | | | | | | | are as follows: | compensation under the LTIP on the date of the event triggering the measurement and payment of the tax
Stock Options- Time Based
Number
Weighted
of Shares
Average
Under
Exercise
Option
Price
356,274
\$
12.73
117,611
25.00
(27,708)
8.99
(12,041)
9.04
434,136
\$
16.39
105,799
\$
23.66
Vested and expected to vest at December 31, 2025
412,730
\$
16.59
The intrinsic value related to stock options exercised was \$147,018 for the year ended December 31, 2025.
The fair value of stock options vested during the year ended December 31, 2025 was \$273,014. The
weighted-average grant date fair value of stock options granted during the year ended year ended | | | | | | | | | | | | | | | | | Weighted
Average
Remaining
Contractual
Life (years) | | | Outstanding at January 1, 2025 | | | | | | | Granted | | | | | | | Forfeited | | | | | | | Exercised | | | | | | | Outstanding at December 31, 2025 | | | | 7.65 | | | Exercisable at December 31, 2025 | | | | 4.66 | | | | | | | 7.38 | | | December 31, 2025 was \$2.57. | | | | | | | The fair value of employee stock option awards granted during the year ended December 31, 2025 was
estimated using the Black-Scholes option pricing model with the following assumptions: | | | | | | | Risk-free rate
Expected term
Expected dividend yield | | | 4.16%-4.18%
6.31-6.75 years
0.00% | | | | Expected volatility | | | 32.42%-32.52% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Expected term | 6.31-6.75 years | | |---------------|-----------------|--| | | | | | | | | {15}------------------------------------------------ | December 31, 2025 | | | | | | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|-----------------------|----|---------------------|--|--|--|--| | | | | | | | | | | | Related parties include affiliated funds and affiliated entities. Amounts due to and due from affiliates and
portions of the Company's revenues and operating expenses are from related parties. Amounts due from
and to affiliates as of December 31, 2025, related to transactions and agreements with related parties are
as follows: | | | | | | | | | | Related Party | | Due From
Affiliate | | Due To
Affiliate | | | | | | Russell Investments Group | \$ | - | \$ | 5,484,431 | | | | | | Russell Investments Trust Company | | 9,941,008 | | - | | | | | | Russell Investments Fund Management | | 444,967 | | - | | | | | | Russell Investments Capital | | 663,568 | | - | | | | | | Russell Investments Management | | 32,059 | | - | | | | | | Russell Investments Canada | | 158,379 | | - | | | | | | Russell Investments Management Limited | | - | | 95,295 | | | | | | Russell Investments Japan | | 663,020 | | - | | | | | | Russell Investments Limited | | - | | 367,645 | | | | | | Russell Investments Implementation Services Limited | | - | | 1,097,697 | | | | | | Russell Investments Institutional Holdco | | - | | 4,829,838 | | | | | | | | - | | 663,240 | | | | | | | | | | | | | | | | RIIV India Private limited
Multiple related parties (Other) | | 178,653 | | 215 | | | | | The Company acts as an introducing broker for customers of the Russell Investments Group subsidiaries. The customers may elect to pay their fees to these subsidiaries with commission credits received from the Company. There are no amounts payable to Russell Investments Group subsidiaries for these fees at December 31, 2025. The Company has service agreements with multiple related parties. Under these agreements, the related parties agree to compensate the Company for providing investment services to their customers. The Company has service agreements to provide services to affiliated investment funds. Under these agreements, the affiliated funds agree to compensate the Company for providing agency brokerage and investment management services. The amount receivable from these affiliated investment funds for these fees is \$385,674 as of December 31, 2025 and is included in fees receivable and securities commissions receivable, net. The Company has agreements with multiple related parties to perform investment management and investment services support activities on behalf of the Company. The Company has a Referral and Service agreement with RITC. Under this agreement, RITC agrees to compensate the Company for introducing prospective customers and investors along with providing client support services. {16}------------------------------------------------ The Company has entered into a participation agreement with RIFM with respect to the Russell Institutional receive offers to subscribe for interests in RIFL. Funds, LLC ("RIFL"). Under this agreement, RIFM agrees to compensate the Company to solicit and The Company has entered into an expense sharing and support agreement with RICAP. Under this agreement the Company is compensated for providing marketing, distribution and client services on behalf of RICAP. The Company has entered into a sales and marketing services agreement with RIL. Under this agreement the Company is compensated for providing sales and marketing and distribution services on behalf of RIL. 8. Net Capital Requirements The Company is subject to the SEC's uniform net capital rule ("Rule 15c3-1"), which requires the maintenance of minimum net capital, as defined. The Company has elected to use the alternative method permitted by Rule 15c3-1, which requires that the Company maintain net capital equal to the greater of 2% of aggregate debit items as defined or 250,000. At December 31, 2025, the Company has net capital of \$27,691,654, which is \$27,441,654 in excess of its minimum net capital requirement of \$250,000. 9. Guarantees 10. Contingencies 11. Subsequent Events In the normal course of business, the Company enters into contracts that contain a variety of representations that provide general indemnifications. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, the Company expects the risk of loss to be remote and has not recorded any contingent liability in the financial statements for these indemnifications. The Company has various claims and legal and regulatory matters occurring in the normal course of business, which management, based upon the advice of legal counsel, does not expect to have a material adverse effect on the financial condition, results of operations or cash flows of the Company. The Company has performed an evaluation of subsequent events for potential recognition and/or disclosure through the date these financial statements were issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.