# WEALTH ENHANCEMENT BROKERAGE SERVICES, LLC X-17A-5 (2024-04-01) — Broker-dealer annual report - Company: WEALTH ENHANCEMENT BROKERAGE SERVICES, LLC - Form: X-17A-5 - Filed: 2024-04-01 - Period: 2023-12-31 - Accession: 0001275351-24-000004 - CIK: 1275351 - File #: 8-66305 - Type: Broker-dealer - Material weakness: No - Auditor: BDO USA, P.C. - Auditor location: MINNEAPOLIS, MN - Contact: Amy Schlangen - Phone: 7634171414 - Email: aschlangen@wealthenhancement.com - Website: wealthenhancement.com - Signed by: KELLY WINDORSKI (CHIEF MANAGER) Original filing: https://www.sec.gov/Archives/edgar/data/1275351/000127535124000004/publicreport.pdf --- {0}------------------------------------------------ # Wealth Enhancement Brokerage Services, LLC Financial Statement (Public Document) December 31, 2023 {1}------------------------------------------------ | | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549 | 0MB APPROVAL
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12 | | | | | | |------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|------------------------------|--|--|--|--| | PUBLIC | ANNUAL
REPORTS | | SEC FILE NUMBER | | | | | | | FORM
X-17A-5 | | 8-66305 | | | | | | | PART
Ill | | | | | | | | Information
Required Pursuant | FACING PAGE
to
Rules 17a-5, 17a-12,
and 18a-7 under the | Securities | Exchange Act
of 1934 | | | | | | t
FILING FOR THE PERIOD | e
<
Ao
GN
01/01/23
12/31/23
ENDo
n | | | | | | | | | MM/00/YY | | MM/00/YY | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | | | Wealth
NAME
OF FIRM: | Enhancement
Brokerage | | Services,
LLC | | | | | | (check
all
TYPE OF REGISTRANT
[S] Broker-dealer
D Check here if
respondent
is also | applicable
boxes):
[]Security-based
□
Major
swap
dealer
an OTC derivatives
dealer | security-based | participant
swap | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not
Highway
505
N | use a P.O. box no.)
169,
Suite
900 | | | | | | | | | (No. and Street) | | | | | | | | Plymouth | MN | | 55441 | | | | | | (City) | (State) | | (Zip Code) | | | | | | PERSON TO CONTACT WITH REGARD | TO THIS FILING | | | | | | | | Amy
Schlangen | 417-1414
(763) | aschlangen@wealthenhancement.com | | | | | | | (Name) | (Area Code -Telephone
Number) | | (Email Address) | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | PUBLIC ACCOUNTANT whose
INDEPENDENT
USA,
P.C.
BDO | contained
reports
are | in this
filing* | | | | | | | | (Name -if
individual, state
last,
first,
and middle name) | | | | | | | | Suite
Nicollet
Mall,
800 | Minneapolis
600 | MN | 55402 | | | | | | (Address)
10/08/2003 | (City) | (State)
243 | (Zip Code) | | | | | | T"
of Reg;matloo
w;th PCAO BJ(lf appijcableJ | | (PCAOB n,g;,trntloo | N,mb'"
, ;f applicableI I | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | for exemption
from the
* Claims | requirement
the
that
be covered by the
annual reports | of
reports | an independent
public | | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis ofthe exemption. See 17 CFR 240.17a-5(e)(1)ii), if applicable. **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, Kelly Windorskl | | | | | | | that,
to
the
of
affirm)
best
swear
knowledge
(or
my | and belief, | the | |--------------------|--------|------------|----|-----|------|------|------------------------------------------------------------------------------------------|----------------|-------| | financial | report | pertaining | to | the | firm | of | Wealth Enhancement Brokerage Services, LLC | | as of | | 12/31 | | | | | 2 | 9_,i | neither
and correct.
affirm)
s true
I further
that
the
swear
(or | nor
company | any | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. ![](_page_2_Picture_3.jpeg) Title': Chief Manager Notary Public # **This filing contains (check all applicable boxes):** i (a) Statement offinancial condition. - - i (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (loss) or, ifthere is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in§ 210.1-02 of Regulation S-X). - D (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - L] (i) Computation oftangible net worth under 17 CFR 240.18a-2. - 0) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 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. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, ofthe 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 240.18a-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 offinancial condition. - ~ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - L] (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - **i** (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. - D (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 ofthe exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (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 ofthe previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). D (z) Other: \_ *To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5{e}(3} or 17 CFR 240.180-7(d)(2), as applicable.* {3}------------------------------------------------ ## Page(s) | of
Accounting
Firm
Report
Independent
Registered
Public | 2 | |---------------------------------------------------------------------------|---| | Statement:
Financial | | | of
Condition
Statement
Financial | 3 | | Statement
Notes
to
Financial
4-6 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Tel: 612-367-3000 Fax: 612-367-3001 www.bdo.com 800 Nicollet Mall, Suite 600 Minneapolis, MN 55402 #### **Report of Independent Registered Public Accounting Firm** Board of Governors and Member Wealth Enhancement Brokerage Services, LLC Plymouth, Minnesota #### **Opinion on Financial Statement** We have audited the accompanying statement of financial condition of Wealth Enhancement Brokerage Services, LLC (the "Broker-Dealer") as of December 31, 2023, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Broker-Dealer at December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. # **Basis** for Opinion This financial statement is the responsibility of the Broker-Dealer's management. Our responsibility is to express an opinion on the Broker-Dealer'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 Broker Dealer 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 presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Broker-Dealer's auditor since 2013. March 29, 2024 BDO USA, P.C., a Virginia professional corporation, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BOO network and for each of the BOO Member Firms. {5}------------------------------------------------ ### **Assets** | Cash
Receivables
from
Financial)
broker
(LPL
Prepaid
expenses | \$
4,302,122
2,519,847
64,184 | |------------------------------------------------------------------------------------|----------------------------------------| | assets
Total | \$
6,886,153 | | | | | Liabilities
Member's
Equity
and | | | Liabilities: | | | Accounts
payable | \$
66,338 | | expenses
Other
accrued | 25,440 | | affiliates
Payable
to | 1,737,533 | | broker
Payable
to | 131,314 | | notes
Broker
payable | 1,657,213 | | liabilities
Total | 3,617,838 | | Commitments
contingencies
and | | | equity:
Member's | | | capital
Additional
paid-in | 435,000 | | Retained
earnings | 2,833,315 | | | | | member's
Total
equity | 3,268,315 | | liabilities
Total
member's
equity
and | \$
6,886,153 | See accompanying notes to the financial statement. {6}------------------------------------------------ #### **1. Nature of Business and Significant Accounting Policies** #### Nature of Business Wealth Enhancement Brokerage Services, LLC (the "Company") is a privately held Minnesota limited liability company operating as a registered securities broker-dealer with the U.S. Securities and Exchange Commission (the "SEC") and is a member of the Financial Industry Regulatory Authority, Inc. The Company is a wholly owned subsidiary of Wealth Enhancement Group, LLC (the "Parent"), which is ultimately owned by WEG Consolidated, LLC ("WEG Consolidated"). The Parent has agreed to contribute capital, as needed, to fund the operations of the Company. The Company does not receive customer funds. The Company has a brokerage services agreement with Linsco/Private Ledger Corp. (also known as LPL Financial) whereby LPL Financial is the Company's Clearing Broker and the Company's advisors act as LPL Financial registered representatives. #### Basis of Preparation The financial statements have been prepared on an accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP"). #### Concentration of Major Customer Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of receivables from its clearing broker, LPL Financial. The Company believes its broker is a high-quality institution and there is no significant credit risk with respect to these amounts. #### Cash Deposits in Excess of Federally Insured Limits The Company often maintains cash balances at financial institutions in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limits. Management believes the financial risk to be minimal. At December 31, 2023, the Company had deposits in excess of federally insured amounts totaling **\$4,052,122.** #### Receivables from Broker The Company evaluates the collectability of its receivables based on a combination of factors using the current expected credit loss ("CECL") framework. The Company considers factors such as historical experience, credit quality, age of balances and current and future economic conditions that may affect the Company's expectation of the collectability in determining the allowance for credit losses. As of December 31, 2023, no allowance for uncollectable accounts has been reflected on the accompanying statement of financial condition. If circumstances change, the Company's estimates of collectability could be reduced by a material amount. {7}------------------------------------------------ #### Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. #### **2. Broker Notes Payable** In connection with the transition of new registered representatives, LPL Financial provided financing to the Company in the form of forgivable notes. The notes are structured as full recourse forgivable notes, with principal and accrued interest forgiven annually over a three to seven year period. Should the Company or the registered representative terminate their agreements with LPL Financial, or another Event of Default (as defined) occurs, the forgiveness of the notes will cease and amounts outstanding will be payable upon maturity date or earlier based on the terms of the note agreements. Provided no Event of Default occurs, interest shall accrue on the forgivable notes at the minimum federal rate published by the IRS as of the issuance date. Future maturities of broker notes payable are as follows at December 31: | Ended December
Year
31, | | |-------------------------------|-----------------| | 2024 | \$ | | 2025 | | | 2026 | 35,896 | | 2027 | 464,902 | | 2028 | 144
86, | | Thereafter | 1,070,271 | | | \$
1,657,213 | #### **3. Regulatory Requirements** The Company is subject to the SEC's Uniform Net Capital Rule ("Rule 15c3-1"), which requires the maintenance of minimum net capital and requires the ratio of aggregate indebtedness to regulatory net capital, both as defined under such provisions, shall not exceed 15 to 1. The rule also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. The Company has at all times maintained its net capital above the SEC's required level during the year ended December 31, 2023. At December 31, 2023, the Company's net capital of \$1,681,508 was \$1,440,319 in excess of its required net capital of \$241,189. The Company's ratio of aggregate indebtedness to net capital was 2.15 to 1 at December 31, 2023. The Company does not claim an exemption from Securities Exchange Act ("SEA") Rule 15c3-3 in reliance on footnote 74 to SEC Release 34-70073. The Company does not and will not, (1) directly or indirectly, receive, hold or otherwise owe funds or securities for or to customers, (2) does not and will not carry accounts of or for customers and (3) does not and will not carry PAB accounts. {8}------------------------------------------------ #### **4. Related-Party Transactions** The Company and its Parent have a cost sharing agreement for certain shared expenses. Under the agreement, the Parent incurs services and costs and allocates to the Company its applicable share of these costs. During 2023, the Parent allocated compensation expense and other cost of revenue fees to the Company. In addition, certain other expenses, including occupancy, employee compensation including commissions, promotional fees and other administrative costs, are paid by the Parent or its affiliates, and allocated to the Company. At December 31, 2023, \$1,728,903 was payable to the Parent related to these expenses and is reflected as a payable to affiliates on the accompanying statement of financial condition. The Company is significantly reliant on the operating services provided by the Parent. #### Affiliate From time to time, the Company receives payments from LPL Financial or incurs direct expenses on behalf of an affiliated entity, Wealth Enhancement Advisory Services, LLC ("WEAS"), which is a registered investment advisor and wholly owned subsidiary of the Parent. Those transactions are recorded as payables and receivables and are settled periodically. At December 31, 2023, \$8,630 was payable to WEAS and was reflected as a Payable to Affiliate in the accompanying statement of financial condition. #### **5. Subsequent Events** The Company has evaluated subsequent events through March 29, 2024, which is the date the financial statements were available to be issued. Management has determined that there are no material events that would require adjustments to, or disclosures in the Company's financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.