# STIFEL INDEPENDENT ADVISORS, LLC X-17A-5 (2024-03-08) — Broker-dealer annual report - Company: STIFEL INDEPENDENT ADVISORS, LLC - Form: X-17A-5 - Filed: 2024-03-08 - Accession: 0001193125-24-063672 - CIK: 872275 - File #: 8-43514 Original filing: https://www.sec.gov/Archives/edgar/data/872275/000119312524063672/d771493dfull.pdf --- {0}------------------------------------------------ # **STIFEL INDEPENDENT ADVISORS, LLC** (A Wholly-Owned Subsidiary ofStifel Financial Corp.) Statement of Financial Condition December 31, 2023 (With Report of Independent Registered Public Accounting Firm) This Statement of Financial Condition was filed pursuant to Rule 17a-5(e)(3) as a public document. {1}------------------------------------------------ #### **STIFEL INDEPENDENT ADVISORS, LLC (A WhoUy-Owned Subsidiary of Stifel Financial Corp.)** #### Statement of Financial Condition December 31,2023 | Statement of Financial Condition | Page | |---------------------------------------------------------|------| | Report of Independent Registered Public Accounting Finn | 2 | | Statement of Financial Condition | 3 | | Notes to Statement of Financial Condition | 4 | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) Ernst & Young LLP 1828 Walnut Street Suite 04-100 Kansas City, MO, 64108 ## Report of Independent Registered Public Accounting Firm To the Stockholder and Board of Directors of Stifel Independent Advisors, LLC ## Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Stifel Independent Advisors, LLC. (the "Company") as of December 31, 2023 and the related notes (the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at December 31, 2023, in conformity with U.S. generally accepted accounting principles. ## Basis for Opinion This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's 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 the 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. 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2008. March 8, 2024 {3}------------------------------------------------ #### STIFEL INDEPENDENT ADVISORS, LLC (A Wholly-Owned Subsidiary of Stifel Finandal Corp.) #### Statement of Financial Condition December 31, 2023 | (in thousands) | | | |------------------------------------------------------|----|--------| | Assets | | | | Cash | \$ | 8,191 | | Commissions receivable from affiliated broker-dealer | | 764 | | Due from affiliated broker-dealer | | 630 | | Operating lease right-of-use assets, net | | 834 | | Prepaid expenses | | 357 | | Other assets | | 317 | | Total assets | s | 11,093 | | Liabilities and member's capital | | | | Payable to independent contractors | \$ | 3,042 | | Accrued compensation | | 960 | | Lease liabilities, net | | 929 | | Due to Parent | | 632 | | Other accrued liabilities | | 442 | | Total liabilities | | 6,005 | | Member's capital | | 5,088 | | Total liabilities and member's capital | s | 11,093 | *See accompanying Notes to Statement of Financial Condition.* {4}------------------------------------------------ ## STIFEL INDEPENDENT ADVISORS, LLC (A WhoUy-Owned Subsidiary of Stifel Financial Corp.) #### Notes to Statement of Financial Condition December 31, 2023 ## NOTE 1-Nature of Operations Stifel Independent Advisors, LLC (tbe "Company'') is an iovestment advisor and a fuUy-disclosed iotroduciog broker, which contracts witb iodependent licensed brokers to sell securities and otber iovestment products priocipally to retail (iodividual) iovestor customers. The Company is a wholly-owned subsidiary ofStifel Fioancial Corp. ("Parent''). The Company iotroduces its customers to an affiliated broker-dealer, Stifel, Nicolaus & Company, Incorporated ("Stifel") who carries such accounts on a fuUy-disclosed basis. The Company is subject to regulation and oversight by tbe Securities and Exchange Commission ("SEC'') and tbe Fioancial Industry Regulatory Autbority, Inc. ("FINRA''). ## NOTE 2- Summary of Significant Accounting Policies ## *Use of EsdmaJes* The accompanyiog statement of financial condition has been prepared io conformity witb U.S. generally accepted accountiog priociples, which require management to make certaio estimates and assumptions tbat affect tbe reported amounts. Actual results could differ from tbose estimates. #### *Stock-Based Compensation* Associates of tbe Company are eligible to participate io an iocentive stock plan sponsored by tbe Parent tbat provides for tbe grantiog of stock units and debentures. See Note 4 for additional ioformation on stock-based compensation plans. ## *Income Taxes* As a siogle member limited liability company, tbe Company is not directly liable for iocome taxes. The Company's iocome was, however, reportable by tbe Parent duriog tbe year ended December 31, 2023. Accordingly, tbe federal and state iocome taxes payable by tbe Parent have not been reflected io tbe accompanyiog statement of financial condition. #### *Operating Leases* The company enters ioto operatiog leases for real estate and office equipment, substantially all of which are used io connection witb its operations. The determination of whetber an arrangement qualifies as a lease occurs at tbe ioception of tbe arrangement. The Company recognizes, for leases longer tban one year, a right-of-use asset representiog tbe right to use tbe underlyiog asset for tbe lease term, and a lease liability representiog tbe obligation to make payments. The lease term is generally determioed based on tbe contractual maturity oftbe lease. For leases where tbe Company has tbe option to terminate or extend tbe lease, an assessment of tbe likelihood of exercisiog tbe option is iocorporated ioto tbe determination of tbe lease term. Such assessment is initially performed at tbe ioception of tbe lease and is updated if events occur tbat impact tbe origioal assessment. An operatiog lease right-of-use asset is initially determined based on tbe operatiog lease liability, adjusted for initial direct costs, lease iocentives and amounts paid at or prior to lease commencement. This amount is tben amortized over tbe lease term. At December 31, 2023, tbe right-of-use assets are iocluded in operatiog lease rightof-use assets, net witb tbe corresponding lease liabilities iocluded io lease liabilities, net io tbe accompanyiog statement of financial condition. See Note 6 for additional information on operatiog leases. ## NOTE 3- Regulatory Capital Requirements The Company operates io a highly regulated environment and is subject to net capital requirements. A brokerdealer tbat fails to comply witb tbe SEC's Uniform Net Capital Rule (Rule 15c3-l) may be subject to disciplinary actions by tbe SEC and self-regulatory organizations, such as FINRA, iocluding censures, fines, suspension, or expulsion. The Company calculates its net capital under tbe aggregate iodebtedoess metbod whereby it is required to maintaio minimum net capital (as defined), equal to tbe greater of fifty tbousand dollsrs or 6 2/3% of aggregate iodebtedoess (as defined). The Company is not allowed to distribute equity capital or pay cash dividends to tbe Parent ifresultiog net capital would be less tban 120% of its minimum net capital (as defined). At December 31, 2023, tbe Company had net capital of\$3.8 million, which was \$3.4 million io excess oftbe Company's mioimum required net capital of\$0.3 million. {5}------------------------------------------------ ## STIFEL INDEPENDENT ADVISORS, LLC (A Wholly-Owned Subsidiary of Stifel Financial Corp.) #### Notes to Statement of Financial Condition December 31, 2023 ## NOTE 4 - Employee Incentive, Deferred Compensation and Retirement Plans The Parent maintains an incentive stock plan and a wealth accumulation plan that provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards, stock units, and debentures (collectively, "deferred awards") to the Company's associates. Stock awards issued under the Parent's incentive stock plan are granted at market value at the date of grant. Debentures vest ratably on an annual basis and accumulate interest. The deferred awards generally vest ratably over a one- to ten-year vesting period, with continued employment after the date of grant. In addition, the Company's associates participate in a defmed contribution plan sponsored by the Parent. All stock-based compensation plans are administered by the Compensation Committee of the Board of Directors of the Parent, which has the authority to interpret the plans, determine to whom awards may be granted under the plans, and determine the terms of each award. At December 31, 2023, there was \$0.1 million of debenture and interest payable, which is included in accrued compensation in the accompanying statement of financial condition. #### *Employee Profit Sharing Plan* Eligible associates of the Company who have met certain service requirements may participate in the Stifel Financial Profit Sharing 401(k) Plan (the "Profit Sharing Plan"). Associates are permitted within limitations imposed by tax law to make pre-tax contributions to the Profit Sharing Plan. The Company may match certain associate contributions or make additional contributions to the Profit Sharing Plan at the discretion of the Parent. ## NOTE 5 - Off-Balance Sheet Credit Risk The Company's customers' accounts are carried by Stifel. All execution and clearing services are performed by Stifel. The agreement between the Company and Stifel stipulates that all losses resulting from its customers' inability to fulfill their contractual obligations are the Company's responsibility. The Company manages its risks associated with the aforementioned transactions through Stifel's monitoring of positions, credit limits, and collateral. Additional collateral is required from customers and other counterparties, when appropriate. At December 31, 2023, no amounts are accrued or due to Stifel for customer losses. #### NOTE 6 - Commitments and Contingencies #### *Leases* The Company has an operating lease with a third party for office space with a remaining lease term of 2 years. In addition, the Company has an operating lease with an affiliate for office space with a remaining lease term of 4 years. At December 31, 2023, operating lease right-of-use assets were \$0.8 million and lease liabilities were \$0.9 million. The table below summarizes other information related to the Company's operating lease as of and for the year ended December 31, 2023: | Weighted-average remaining lease term (years) | 18.0 | |-----------------------------------------------|-------| | Weighted-average discount rate | 4.90% | The weighted-average discount rate represents the Company's incremental borrowing rate at the lease inception date. The table below presents information about operating lease liabilities as of December 31, 2023 *(in thousands):* | 2024 | \$ | 79 | |-----------------------------------|----|-------| | 2025 | | 80 | | 2026 | | 82 | | 2027 | | 83 | | 2028 | | 83 | | Thereafter | | 1,047 | | Total undiscounted lease payments | | 1,454 | | Imputed interest | | (525) | | Total operating lease Habilltles | s | 929 | {6}------------------------------------------------ ## STIFEL INDEPENDENT ADVISORS, LLC (A WhoUy-Owned Subsidiary of Stifel Financial Corp.) #### Notes to Statement of Financial Condition December 31, 2023 ## *Litigation* In the ordinary course of business, the Company may be a defendant or codefendant in legal proceedings. At December 31, 2023, the Company believes, based on currently available information, tbat the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's financial condition. The results of such proceedings could be material to the Company's financial condition, depending, in part, upon additional developments affecting such matters. Legal accruals have been established for potential losses that are probable and reasonably estimable. Once established, accruals are adjusted when there is more information available or when an event occurs requiring a change. ## NOTE 7- Related Party Transactions The Company conducts its securities operations as a fully-disclosed introducing broker through Stifel. Under the arrangement, the Company has a Proprietary Accounts of Broker-Dealers agreement with Stifel. At December 31, 2023, commissions receivable from affiliated broker-dealer in the accompanying statement of financial condition consists of commissions receivable, net, and due from affiliated broker-dealer in the accompanying statement of financial condition consists of service fees where Slife! acts as a pass-through from third-party mutoal funds and insurance companies. The Pareot offers transition pay, in the form ofupfront loans, to the Company's independent contractors and key members of management as part of the Company's overall growth strategy. These loans are forgiven over a tenyear period if the individual satisfies certain conditions, usually based on continued employment and certain performaoce standsrds. At December 31, 2023, due to Parent in the accompanying statement of financial condition primarily consists of amounts due to the Pareot for reimbursement of stock unit conversions and note amortization. The Company rents office space from an affiliate at the corporate headquarters. See Note 6 for additional information on operating leases. During the year ended December 31, 2023, the Company received capital contributions of\$2.0 million from the Pareot. ## NOTE 8 - Subsequent Events The Company evaluates subsequent events that have occurred after the statement of financial condition date but before the financial statements are available to be issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence about conditions that existed at the date of the statement of financial condition, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those tbat provide evidence about conditions tbat did not exist at the date of the statement of fioancial condition but arose after tbat date. The Company has evaluated subsequent events through March 8, 2024, the date the accompanying statement of financial condition was available to be issued. Based on the evaluation, the Company did not identify any recognized subsequent events that required adjustment to the statement of financial condition. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.