# HALL & ROMKEMA FINANCIAL SERVICES, LLC X-17A-5 (2021-01-25) — Broker-dealer annual report - Company: HALL & ROMKEMA FINANCIAL SERVICES, LLC - Form: X-17A-5 - Filed: 2021-01-25 - Period: 2020-12-31 - Accession: 0001218185-21-000001 - CIK: 1218185 - File #: 8-65800 - Material weakness: No - Auditor: Phillip V. George, PLLC - Auditor location: Celeste, TX - Contact: Joe A. Romkema - Phone: 517-337-8900 - Signed by: Joe A. Romkema (Member) Original filing: https://www.sec.gov/Archives/edgar/data/1218185/000121818521000001/2020auditreporthallromkema-.pdf --- {0}------------------------------------------------ **UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: 3235-0123 Expires: October 31,2023 Estimated average burden # hours per response 12.00 **ANNUAL AUDITED REPORT FORM X-17A-5 PART III** | SEC FILE NUMBER | |-----------------| | s-65800 | **FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | Securities | Exchange
Act
of
1934
and | Rule
17a-5
Thereunder | | | |----------------------------------------------------------------------|--------------------------------------------------------------|-----------------------------------|----------------------------------|--| | REPORT
FOR THE
PERIOD
BEGINNING | AND
ENDING | 12/31/2020 | | | | | 01/01/2020
MM/DD/YY | | MM/DD/YY | | | A. | REGISTRANT
IDENTIFICATION | | | | | Hall
NAME OF BROKER-DEALER: | Romkema
Financial
& | Services,
LLC | OFFICIAL USE ONLY | | | BUSINESS:
ADDRESS OF
PRINCIPAL PLACE OF
(Do
not use P.O. | | Box No.) | FIRM I.D.
NO. | | | 3495
Coolidge | | | | | | | (No. and Street) | | | | | East
Lansing | Ml | | 48823 | | | (City) | (State) | | (Zip Code) | | | NAME AND
TELEPHONE
NUMBER OF
Joe A. Romkema | PERSON
TO
CONTACT | IN REGARD
TO
THIS
REPORT | 517-337-8900 | | | | | | (Area Code -Telephone
Number) | | | B. | ACCOUNTANT
IDENTIFICATION | | | | | INDEPENDENT
PUBLIC
ACCOUNTANT | whose
opinion
is
contained | Report*
in this | | | | V.
George,
Phillip
PLLC | | | | | | | -if
individual, state last, first, middle name )
(Name | | | | | 5179
CR
1026 | Celeste | TX | 75423 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE: | | | | | | /
Certified
Public
Accountant | | | | | | Public
Accountant | | | | | | Accountant
not resident | in United
States
or any of | its possessions. | | | | | OFFICIAL
FOR
USE | ONLY | | | | | | | | | | | | | | | | | | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement offacts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)* **Potential persons who are to respond to the collection of information contained in this form are notrequired to respond** SEC 1410 **unless theform displays a currently validOMB controlnumber.** (11-05) {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | i
A.
Joe
Romkema
1
? | the
,
(or
affirm) that,
to
swear
best of | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|--| | my knowledge
and
belief
the
accompanying
financial
statement
Services,
Hall
Romkema
LLC
&
Financial | and supporting
schedules
pertaining
to the firm
of
,
as | | | ,
2O 20
Qf December
31 | and correct.
further
(or
are
true
I
swear
affirm)
that | | | proprietor,
neither
the
company
nor any
partner,
principal | ^
officer
or director
has
any proprietary
interest
in any account | | | a customer,
as follows:
classified
solely
as
of
that
except | | | | | | | | | | | | | | | | | | | | | | | | | Signature | | | TOESEAJACKSON | | | | NOTARY PUBLIC - STATE OF MICHIGAN
COUNTY OF CLINTON | Member | | | My Commission Expires December 25, 2023
Acting in the County of | Title | | | | | | | O S) &
viw
Notary
Public | | | | | | | | This
(check
boxes):
report
** contains
all applicable
[Z]
Page.
(a)
Facing | | | | [7]
Condition.
(b) Statement
of
Financial | | | | or,
(c)
Statement
is other
of
Income
(Loss)
if there
[71 | presented,
period(s)
a Statement
comprehensive
income
in the | | | of
Comprehensive
Income
(as
defined
in §210.1-02
of | S-X).
Regulation | | | 7]
(d)
Condition.
Statement
Financial
of
Changes in
(e)
Statement
of Changes in
Stockholders'
V | Capital. | | | Equity or Partners'
or
Proprietors'
Sole
(f)
Creditors.
Liabilities
Statement
of
Changes in
Subordinated
to Claims
of | | | | y
(g)
Computation
of
Net Capital. | | | | v
(h)
Computation
for
Determination
of
Reserve
Requirements | 15c3-3.
Pursuant
to Rule | | | (i)
S
Information
Relating
to the
Possession
or Control
/ | 15c3-3.
Requirements
Under
Rule | | | A Reconciliation,
(j)
including
appropriate
explanation | of the
15c3-1 and the
Computation
of
Net Capital
Under
Rule | | | Computation
for
Determination
of
the
Reserve
~
]
(k) | 15c3-3.
Requirements
Under Exhibit
A of
Rule | | | A Reconciliation
between the
audited
and unaudited Statements

consolidation. | to methods
of
Financial
Condition
with respect
of | | | (1)
or Affirmation.
An Oath | | | | _
(m)
Report.
A copy of
the
SIPC Supplemental | | | | (n)
A report
describing
any material
inadequaciesfound to exist | audit.
existed since
or found
to have
the
date
of
the
previous | | | **For conditions
of confidential
treatment
of
certain
portions | 240.17a-5(e)(3).
this
of
filing,
see
section | | | | | | | | | | ![](_page_1_Picture_2.jpeg) {2}------------------------------------------------ ### **HALL & ROMKEMA FINANCIAL SERVICES, LLC** ### **TABLE OF CONTENTS** | Report
Independent
Registered
Public
Accounting
Firm
Page
of | 1 | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------| | Financial
Statements
Statement
of
Financial
Condition
Statement
of
Income
Statement
of
Changes
in
Members'
Equity
Statement
of
Flows
Cash | 2
3
4
5 | | Notes
to
Financial
Statements
Supplementary
Information
Computation
Net
Capital
under
Rule
15c3-1
of
of | 6-8 | | the
Securities
and
Commission
Exchange | 9 | | Report
Independent
Registered
Public
Accounting
Firm
of | 10 | | Exemption
Report | 11 | {3}------------------------------------------------ # PHILLIP V. GEORGE, PLLC CERTIFIED PUBLIC ACCOUNTANT #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Members Hall & Romkema Financial Services, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Hall & Romkema Financial Services, LLC as of December 31, 2020, the related statements of income, changes in members' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Hall & Romkema Financial Services, LLC as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of Hall & Romkema Financial Services, LLC's management. Our responsibility is to express an opinion on Hall & Romkema Financial Services, LLC's financial statements 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 Hall & Romkema Financial Services, LLC 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 statements are 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 statements, 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 statements. 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 statements. We believe that our audit provides a reasonable basis for our opinion. #### **Auditor's Report on Supplemental Information** The supplemental information contained in Schedule I has been subjected to audit procedures performed in conjunction with the audit of Hall & Romkema Financial Services, LLC's financial statements. The supplemental information is the responsibility of Hall & Romkema Financial Services, LLC's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information contained in Schedule I is fairly stated, in all material respects, in relation to the financial statements as a whole. *Qlk* PHILLIP V. GEORGE, PLLC We have served as Hall & Romkema Financial Services, LLC's auditor since 2017. Celeste, Texas January 22, 2021 {4}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Statement of Financial Condition December 31, 2020** | Assets | | | |----------------------------------------------------------------------------------------------------------------------|--|---------------------------------------| | Cash
Cash
deposit
with
clearing
organization
fees
receivable
Advisory
Prepaid
expenses | | 97,640
15,047
192,359
18,332 | | Total
Assets | | 323,378 | | Members'
Liabilities
and
Equity | | | | Accounts
and
payable
accrued
expenses | | 7,322 | | Total
Liabilities | | 7,322 | | Members'
Equity | | 316,056 | | Members'
Total
Liabilities
and
Equity | | 323,378 | The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Statement of Income For the Year Ended December 31, 2020** | Revenues | | |-----------------------------------------|---------------| | Advisory
fees | \$
712,531 | | Other | 31,755 | | Total
Revenues | 744,286 | | Expenses | | | Contracted
services | 128,400 | | Clearing
charges | 32,041 | | Communications | 12,868 | | Professional
fees
and
services | 56,362 | | Occupancy
and
equipment | 6,624 | | Regulatory
fees | 7,658 | | Other
expenses | 10,403 | | Total
Expenses | 254,356 | | Net
Income | \$
489,930 | The accompanying notes are an integral part of these financial statements. {6}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Statement of Changes in Members' Equity For the Year Ended December 31, 2020** | Net
income | 489,930 | |------------------------------------------|---------------| | Members'
distributions | (490,000) | | 31,
Balance
at
December
2020 | \$
316,056 | {7}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Statement of Cash Flows For the Year Ended December 31, 2020** | Cash
Flows
from
Operating
Activities
Net
income
Adjustments
to
reconcile
net
income
to
net
cash
activities:
operating
provided | \$
489,930 | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------| | by
Depreciation | 253 | | Changes
in
assets
and
liabilities
Increase
in
cash
deposit
with
clearing
organization
Increase
in
advisory
fees
receivable
Decrease
in
prepaid
expenses
in
Increase
accounts
payable
and
accrued
expenses | (4)
(441)
581
1,059 | | cash
Net
provided
by
operating
activities | 491,378 | | Cash
Flows
from
Financing
Activities
Members'
distributions
Net
cash
used
in
financing
activities | (490,000)
(490,000) | | Net
Increase
in
Cash | 1,378 | | of
Cash,
Beginning
Year | 96,262 | | Cash,
End
of
Year | \$
97,640 | #### **Supplemental Disclosures of Cash Flow Information:** There was no cash paid during the year for interest or income taxes. {8}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Notes to Financial Statements December 31, 2020** ## **Note A - Nature of Operations and Summary of Significant Accounting Policies:** #### **Nature of Operations** Hall & Romkema Financial Services, LLC (the Company), was organized in August 2002 as a Michigan limited liability company. The Company is a broker/dealer in securities registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC). The Company is also a registered investment advisor with the state of Michigan. The Company operates pursuant to section (k)(2)(ii) exemptive provisions of Rule 15c3-3 of the Securities Exchange Act of 1934, and accordingly, is exempt from the remaining provisions of that Rule. The Company, does not hold customer funds or securities, but as an introducing broker or dealer, will clear transactions on behalf of customers on a fully disclosed basis through a clearing broker/dealer. The clearing broker/dealer carries accounts of the customers and maintains and preserves all related books and records as are customarily kept by a clearing broker/dealer. The Company's operations consist primarily of providing investment advisory services to individuals located in Michigan. #### **Revenue Recognition** *Advisory fees.* The Company provides investment advisory services on a daily basis. The Company believes the performance obligation for providing advisory services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fee arrangements are based on a percentage applied to the customer's assets under management. Fees are received quarterly in arrears. Fees are recognized as revenue monthly as they relate specifically to the services provided in that period, which are distinct from the services provided in other periods. *Other Revenue.* Other revenue consists of revenue earned related to customer accounts held at the clearing firm and is recorded on the trade date. #### **Fair Value of Financial Instruments** Substantially all the Company's financial asset and liability amounts reported in the Statement of Financial Condition are short term in nature and approximate fair value. #### **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. {9}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Notes to Financial Statements December 31, 2020** ### **Note A - Nature of Operations and Summary of Significant Accounting Policies (Continued):** #### **Income Taxes** The Company is treated as a partnership for federal income tax purposes. Consequently, federal income taxes are not payable by, or provided for, the Company. Members are taxed individually on their share of the Company's earnings. The Company's net income or loss is allocated among the members in accordance with their ownership interest in the Company. The Company is subject to state income taxes. The Company's federal and state income tax returns for 2017 through 2019 are subject to examination by the applicable tax authorities, generally for three years after the later of the original or extended due date. #### **Note B - Transactions with Clearing Broker/Dealer:** The Company has a clearing agreement with a national clearing broker/dealer to provide clearing, execution and other related services for its advisory service clients and accounts. The clearing agreement requires minimum monthly charges of \$1,000. The clearing agreement requires the Company to maintain a minimum of \$15,000 in an account with the clearing broker/dealer. #### **Note C - Related Party Transactions / Economic Dependency/ Concentration of Services:** The three members of the Company, who are also registered securities representatives and officers of the Company, generated substantially all of the Company's revenue for the year ended December 31, 2020. In lieu of compensation, the members received distributions totaling \$490,000 during the year. The Company is economically dependent upon the members due to the concentration of services provided by them. Two of the Company's members are also owners of Coolidge Road Leasing, Inc., an employee leasing company (the leasing company). The Company leases administrative staff from the leasing company. A total of \$128,400 was incurred and paid by the Company to the leasing company for the year ended December 31, 2020, which is recorded as contracted services in the accompanying Statement of Income. Two of the Company's members are also owners of Hall & Romkema PLC, a certified public accounting firm (the accounting firm). The accounting firm shares its office space with the Company. A total of \$6,624 was incurred and paid by the Company to the accounting firm for office usage and occupancy expenses for the year ended December 31, 2020. The Company incurred expenses for professional advisory, accounting, insurance and postage totaling \$24,202 provided by the accounting firm during the year ended December 31, 2020. These expenses are recorded as professional fees and services in the accompanying Statement of Income. In addition, the Company has a prepaid asset of \$3,363 related to insurance costs paid to the accounting firm at December 31, 2020. {10}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Notes to Financial Statements December 31, 2020** ## **Note D - Concentration of Credit Risk:** The Company has cash, commissions receivable, and a clearing deposit held by and due from its clearing broker-dealer totaling \$105,882, or approximately 33% of total assets, at December 31, 2020. The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its advisory fees receivable credit risk exposure is limited. ### **Note E - Net Capital Requirements:** The Company is subject to the SEC Uniform Net Capital Rule (SEC 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 capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. At December 31, 2020, the Company had net capital of \$105,504, which was \$100,504 in excess of its net capital requirement of \$5,000. The Company's net capital ratio was 0.07 to 1. # **Note F - Off-Balance-Sheet Risk:** As discussed in Note A, the Company's customers' securities transactions are introduced on a fully disclosed basis with its clearing broker/dealer. The clearing broker/dealer carries the accounts of the customers of the Company and is responsible for execution, collection and payment of funds, and receipt and delivery of securities relative to customer transactions. Off-balance-sheet risk exists with respect to these transactions due to the possibility that customers may be unable to fulfill their contractual commitments wherein the clearing broker/dealer may charge any losses it incurs to the Company. The Company seeks to minimize this risk through procedures designed to monitor the credit worthiness of its customers and that customer transactions are executed properly by the clearing broker/dealer. #### **Note G - Statements of Changes in Liabilities Subordinated to Claims of General Creditors:** For the year ended December 31, 2020, the Company did not have any subordinated liabilities subject to claims of general creditors. Therefore, no statement is required. #### **Note H - Subsequent Events:** The Company has evaluated subsequent events through January 22, 2021 the date on which the financial statements were available to be issued. The Company made distributions to members totaling \$130,000 during January 2021. #### **Note I - Uncertainty Related to Coronavirus:** The effects of the pandemic resulting from the novel coronavirus, known as COVID-19, has had significant effects on all aspects of the economy. The ultimate impact of the outbreak to the Company's financial results and operations cannot be determined at this time; however, management is taking actions to mitigate the impact of the outbreak to the Company. The Company has been able to continue operations during the pandemic as a result of its industry and nature of the Company's work performed. {11}------------------------------------------------ # **HALL & ROMKEMA FINANCIAL SERVICES, LLC Computation of Net Capital under Rule 15c3-1 of the Securities and Exchange Commission As of December 31, 2020** #### **Net Capital** | members' equity
Total
qualified
for
net
capital | \$
316,056 | |---------------------------------------------------------------------------------------------------------------------------|-----------------| | Deductions
and/or
charges
Non-allowable
assets: | | | fees
Advisory
receivable | 192,220 | | Prepaid
expenses | 18,332 | | Total
deductions
and/or
charges | 210,552 | | Net
Capital | \$
105,504 | | Aggregate
Indebtedness | | | Items
Included
in
Statement
of
Financial
Condition
Accounts
and
accrued
payable
expenses | \$
7,322 | | Total
Aggregate
Indebtedness | \$
7,322 | | of
Computation
Basic Net Capital
Requirement | | | Net
Minimum
Capital
Required | \$
5,000 | | Excess
Net
Capital | \$
100,504 | | Excess
Net
at
1000%
Capital | \$
99,504 | | Ratio:
Aggregate
Indebtedness
to
Net
Capital | 0.07
to
1 | #### **Reconciliation of Computation of Net Capital** The above computation does not differ from the computation of net capital under Rule 15c3-1 as of December 31, 2020 as filed by Hall & Romkema Financial Services, LLC on Form X-17A-5. Accordingly, no reconciliation is deemed necessary. #### **Statement Regarding the Reserve Requirements and Possession or Control Requirements** The Company operates pursuant to section (k)(2)(ii) exemptive provisions of Rule 15c3-3 of the Securities Exchange Act of 1934. Under these exemptive provisions, the Computation for Determination of Reserve Requirements and Information Relating to the Possession and Control Requirements are not required. See accompanying report of independent registered public accounting firm. {12}------------------------------------------------ ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Members Hall & Romkema Financial Services, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which ( 1 ) Hall & Romkema Financial Services, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which Hall & Romkema Financial Services, LLC claimed an exemption from 17 C.F.R. §240.15c3-3:(2)(ii) (exemption provisions) and (2) Hall & Romkema Financial Services, LLC stated that Hall & Romkema Financial Services, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Hall & Romkema Financial Services, LLC's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Hall & Romkema Financial Services, LLC's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. />140 PHILLIP V. GEORGE, PLLC Celeste, Texas January 22, 2021 {13}------------------------------------------------ # **Hall & Romkema Financial Services, LLC.** **3495 Coolidge / East Lansing, Ml 48823 517-337-8900** #### **Exemption Report** **Hall & Romkema Financial Services, LLC.** (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(l) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the following provisions of 17 C.F.R. § 240.15c3-3 (k):(2)(ii). (2) The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3-3(k) throughout the most recent fiscal year without exception. #### **Hall & Romkema Financial Services, LLC.** I,Joe A. Romkema,swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. k JooATRomkema^ lvIember January 19, 2021 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.