# DIRECTED SERVICES LLC X-17A-5 (2024-02-21) — Broker-dealer annual report - Company: DIRECTED SERVICES LLC - Form: X-17A-5 - Filed: 2024-02-21 - Period: 2023-12-31 - Accession: 0000826606-24-000001 - CIK: 826606 - File #: 8-39104 - Type: Broker-dealer - Material weakness: No - Auditor: N/A-The Registrant qualifies for the single issuer exemption under Paragraph (e)(1)(i)(A) of Rule l7a-5 of the Securities Exchange Act of 1934 - Auditor location: N/A, PA - Contact: Richard Gelfand - Phone: 6102499557 - Email: 80compliance@venerable.com - Website: venerable.com - Signed by: Richard Gelfand (Financial Operations Principal) Original filing: https://www.sec.gov/Archives/edgar/data/826606/000082660624000001/DSLPublic2023.pdf --- {0}------------------------------------------------ ### STATEMENT OF FINANCIAL CONDITION (Unaudited) Directed Services LLC December 31, 2023 {1}------------------------------------------------ | | UNITED STATES | | 0MB APPROVAL
0MB Number: 3235-0123
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Washington, D.C. 20S49
ANNUAL REPORTS
FORM X-17A-5
PART Ill | | | | | | | | | hours per response: 12 | | | | | | SEC FILE NUMBER
8-39104 | | | | | | | | | | | | | | | Information Required Pursuant to Rules 17a-S, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FACING PAGE | | | | | | | | | | | FILING FOR THE PERIOD BEGINNING -- | 01/01/23
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-----=M=M=/=DD'-=/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: --------=D,_ire"""ct=ed=-=S=erv'--'---'--"ic:::e.:.s-=-LL::.:C:-_____________ _ | | | | | | TYPE OF REGISTRANT (check all applicable boxes): | | | | | | 181 Broker-dealer | □ Security-based swap dealer | □ Major security-based swap participant | | | | D Check here if respondent is also an OTC derivatives dealer | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 1475 Dunwoody Drive, Suite 200 | | | | | | | (No. and Street) | | | | | West Chester | PA | | 19380 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Richard Gelfand | (610)249-9447 | | 80Compliance@venerable.com | | | (Name) | (Area Code -Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing• | | | | | | The Registrant qualifies for the singje issuer exemption under Paragraph (el(ll(IIIA) of Rule 17a- 5 of the Securities Exchange Act | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | of 1934 and therefo� is not required to engage an independent certified public accountant to certify Its annual report. | | | | | | (Address) | (City) | (State) | (Zip Code) | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | * Claims for exemption from the requirement that the annual reports be covered cy tile reports ot an independent puotrc | | | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number. {2}------------------------------------------------ #### **OATH OR AFFIRMATION** I, Richard Gelfand , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Directed Services LLC ' as of December 31 2023 is true and correct. The Registrant qualifies for the single issuer exemption under Paragraph (e}(l){i)(A) of Rule 17a-5 � Securities Exchange Act of 1934 and therefore is not required to engage an independent certified public accountant to certify its annual report: - Since June 1, 2018, the business of Directed Services LLC (the "Firm" or "DSL") has been limited to acting as a principal underwriter for a single issuer affiliate, Voya Insurance and Annuity Company (since renamed Venerable Insurance and Annuity Company) ("VIAC"). Moreover, that single issuer, VIAC, ceased offering all new products effective June 1, 2018, and its business is limited to administering existing contracts written prior to June 1, 2018. Such administration can include receipt and processing of additional premium payments to be added to existing contracts. - The product prospectuses, contracts, statements, etc. advise customers to make additional premium checks payable to VIAC, the issuer of the contracts. While the Firm is referenced as the principal underwriter for VIAC's variable insurance products, during my tenure with the organization, I am not aware of any instances in which a premium check was made payable to the Firm. With that said, because the mail room is the same for the Firm and VIAC, should a check be received that is payable to the Firm, it would be immediately given to the Cash Operations team to be deposited and applied to the corresponding customer contract. The Firm will promptly transmit to the issuing insurance company (the "issuer") all funds received to be directly credited to the contract owner's account with the issuer. The Firm relies upon the issuer to apply those funds to the corresponding contract owner's account and issue confirmation statements, as applicable. - The Firm does not hold funds or securities for customers or owe money or securities to customers. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has *1,P?,i ?{.* � �� FEBPJ.\AR'i ) lf/10;/£{, Financial Operations Principal any proprietary interest in any account classified solely as that of a customer. � *+J* £!0Jlo\"1PNWl:Rl.nt OF �tJ»61LVl¼NfA ..6l&NE}) A\1D 6-W�RN Signature: ... 9 C!Ol.lfvl'f Wt!ffE.5fGR 7t> 8ER>Rr;; M� C>N Title: --+-�----f------=---- Commonweallh of Pennsylvania -Notary Seat Notary Public Lori L. DeMarco, Notary Public This filing\*\* contains lcheck all applicable boxes): ChesterCounty I!) (a) Statement of financial condition. My commission expires February 12, 2028 - - - l!I (bl Notes to consolidated statement of financial condition. Comm1\$Sionnumber 1173703 □ (c) Statement of income (loss} or, if there is other comprehensiveMP!eMri8TR'lW��?§��t'e'ff:'� statement of comprehensive income (as defined in§ 210.1-02 of Regulation S-X). - □ (d} Statement of cash flows. - □ (el Statement of changes in stockholders' or partners' or sole proprietor's equity. - 0 (f) Statement of changes in liabilities subordinated to daims of creditors. - □ (g) Notes to consolidated financial statements. - 0 (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1Sc3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.1Sc3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - □ (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - 0 (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3 3(p)(2) or 17 CFR 240.lSa-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.lSa - -4, as applicable, if material differences exist, or a statement that no material differences exist. - □ {p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - l!I (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.lBa-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lBa-7, as applicable. - □ (t) Independent public accountant's report based on an examination of the statement of financial condition. - D {u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a 5, 17 CFR 240.18a-7, or 17 CFR 240 .17a-12, as applicable. - □ {v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12 (k). □ (z)Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_ \_ - - *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a5(e)(3} or 17 CFR 240.18a-7{d}(2}, as applicable.* {3}------------------------------------------------ # Directed Services LLC Statement of Financial Condition - Unaudited\* December 31, 2023 #### Contents | Statement of Financial Condition | | |------------------------------------------------------------------|--| | Notes to Statement of Financial Condition | | | 1. red - Beach and manager to the not of the not the not of
. | | \* The Registrant qualifies for the single issuer exemption under Paragraph (e)(1)(A) of Rule 17a-5 of the Securities Exchange Act of 1934 and therefore is not required to engage an independent certified public accountant to certify its annual reports. {4}------------------------------------------------ # Directed Services LLC Statement of Financial Condition - Unaudited December 31, 2023 | Assets | | | |------------------------------------------------|---|-----------| | Cash | S | 2,362,565 | | Distribution fee receivable | | 3,186,255 | | Prepaid expenses | | 12,818 | | Total assets | | 5,561,638 | | | | | | Liabilities and member's equity | | | | Liabilities: | | | | Commissions and concessions payable | | 830,146 | | Payable to affiliates | | 2,498,166 | | Accounts payable and other accrued liabilities | | 291,292 | | Total liabilities | | 3,619,604 | | | | | | Contingencies (Note 6) | | | | | | | | Member's equity | | 1,942,034 | | Total liabilities and member's equity | | 5,561,638 | | | | | {5}------------------------------------------------ ## 1. Nature of Business and Ownership Directed Services LLC (the "Company") operates as a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is a single member limited liability company, and the limited liability company agreement provides that neither the member nor any manager shall be liable for the liabilities of the Company is also registered as a broker/dealer with the appropriate state authorities and U.S. jurisdictions/teritories, as applicable. The Company services variable insurance products previously sold and/or serviced through FINRA third-party member firms (each a "Selling or Servicing Broker/Dealer" and together the "Servicing Brokers") with which the Company entered into a sales agreement and also had entered into, when and where appropriate, agreements with the affiliated insurance agency of each Servicing Broker. The variable insurance products were previously issued by Venerable Insurance and Annuity Company ("VIAC"), a Company affiliate, and supported by VIAC separate accounts. As of June 1, 2018, VIAC ceased offering and the Company ceased wholesaling new products. The Company is a wholly owned subsidiary of Venerable Holdings, Inc. ("Venerable Holdings" or the "Parent") and ultimately of VA Capital Company, LLC ("VA Capital"). The Company does not carry customer accounts and is not required to make the periodic computation of reserve requirements for the exclusive benefit of customers. Accordingly, the Company is exempt from Securities and Exchange Commission ("SEC") Rule 15c3-3. # 2. Summary of Significant Accounting Policies ## Basis of Presentation The accompanying financial statement has been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). # Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from those estimates. ### Cash Cash represents cash on deposit. Commissions, Concessions and Distribution Fee Receivables Commissions, concessions and distribution fee receivables are shown at their net realizable value. Uncollectible receivables are charged to operations during the period they are determined to be uncollectible. # Liabilities Subordinated to the Claims of General Creditors As of December 31, 2023, the Company had no liabilities subordinated to the claims of general creditors. {6}------------------------------------------------ # Directed Services LLC Notes to Statement of Financial Condition - Unaudited December 31, 2023 #### Subsequent Events The Company is not aware of any events occuring subsequent to December 31, 2023 that may have a material effect on the Company's financial statements. The Company evaluated subsequent events for recognition and disclosure through the date of financial statement issuance. #### Income Taxes 3 The Company is a single member limited liability company. For income tax purposes, the Company is not treated as a separate taxable entity. The Company's income, gains, losses, deductions and credits for the year ended December 31, 2023 are included in the federal income tax return of VA Capital whether or not an actual cash distribution is made during its taxable year. As such, no federal income taxes are reflected for the year ended December 31, 2023. Certain items will be deducted in different periods for tax purposes from those used for financial reporting purposes. These temporary differences are reflected at Venerable Holdings due to the Company's status as a disregarded entity for tax purposes. The Company has reviewed and evaluated the relevant technical merits of each of its tax positions in accordance with ASC Topic 740, Income Taxes, and determined that there are no uncertain tax positions that would have a material impact on the financial statements of the Company. The Company is not under examination by any taxing authorities. ### 4. Related Party Transactions The Company acts as the principal underwriter (as defined in the Securities Act of 1933 and the Investment Company Act of 1940, as amended) of the products previously issued by VIAC, an affiliate of the Company. As of December 31, 2023 the net amount due to VIAC for these activities of \$2,275,916 is reported in Payables to affiliates in the Statement of Financial Condition. The Company is allocated a portion of general administrative expenses from its affiliates based on volume, number of personnel, and activity. As of December 31, 2023, accrued expenses of \$222,251 are reported in Payables to affiliates in the Statement of Financial Condition. Amounts reported in the Statement of Financial Condition related to transactions and agreements with affiliates may not be the same as those incurred if the Company was not a wholly-owned subsidiary of its Parent. Receivables and payables with affiliates are settled in cash on a regular basis. ### 5. Employee Benefit Plans The employees of affiliated companies providing services to the Company are covered by employee benefit plans that are administered by affiliates. The different plans have various eligibility standards, and guidelines for matching. The Company had no separate employee benefit plans in 2023 and relied on its affiliated companies to cover all eligible employees. All benefits paid by these affiliates are charged back to the Company for reimbursement. {7}------------------------------------------------ # Directed Services LLC Notes to Statement of Financial Condition - Unaudited December 31, 2022 #### Contingencies 6. The Company is from time to time party to claims, lawsuits, and/or arbitrations arising in the course of its normal business activities. While it is not possible to forecast the outcome of such lawsuits/arbitrations, in light of existing insurance and established reserves, it is the opinion of management that the disposition of such lawsuits/arbitrations will not have a materially adverse effect on the Company's operations or financial position. The Company and its affiliates periodically receive informal requests for information from various state and federal governmental agencies and self-regulatory organizations in comection with inquiries and investigations of the products and practices of the Company, its affiliates or the financial services industry. Such investigations and inquiries could result in regulatory action against the Company. The potential outcome of any such action is difficult to predict but could subject the Company or its affiliates to adverse consequences, including, but not limited to, settlement payments, penalties, fines and other financial liability. It is not currently anticipated that the outcome of any such action will have a material adverse effect on the Company. For some matters, the Company is able to estimate a possible range of loss. For such matters in which a loss is probable, an accrual is made. For matters where the Company, however, believes a loss is reasonably possible, but not probable, no accrual is required. For matters for which an accrual is made, but there remains a reasonably possible range of loss in excess of the amounts accrued or for matters where no accrual is required, the Company develops an estimate of the reasonably possible range of losses in excess of reserves. For other matters, the Company is currently not able to estimate the reasonably possible loss range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantifications of a damage demand from plaintiffs, discovery from plaintiffs and other parties, investigation of factual allegations, rulings by a court on motions or appeals, analysis by experts and the progress of settlement discussions. On an ongoing basis, the Company reviews relevant information with respect to litigation and regulatory contingencies and updates the Company's accruals, disclosures and reasonably possible losses or ranges of loss. As of December 31, 2023 the Company was not a party to any littgation or arbitration, nor was it involved in any informal or formal governmental or self-regulatory inquiry or investigation. #### Net Capital Requirements / The Company is subject to the SEC Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. Rule 15c3-1 also provides that equity may not be withdrawn or cash dividends paid if the resulting ratio of aggregated indebtedness to net capital would exceed 12 to 1. As of December 31, 2023, the Company had net capital of \$1,929,216 which was \$1,687,909 in excess of its required net capital of \$241,307. The Company's ratio of aggregate indebtedness to net capital as of December 31, 2023 was 1.88 to 1. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.