# HANSON MCCLAIN RETIREMENT NETWORK, LP X-17A-5 (2021-02-26) — Broker-dealer annual report - Company: HANSON MCCLAIN RETIREMENT NETWORK, LP - Form: X-17A-5 - Filed: 2021-02-26 - Period: 2020-12-31 - Accession: 0001559837-21-000002 - CIK: 1102483 - File #: 8-52250 - Material weakness: No - Auditor: Ernst Wintter & Associates LLP - Auditor location: Walnut Creek, CA - Contact: Corey Gamble - Phone: 916-475-1351 - Signed by: Corey Gamble (CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1102483/000155983721000002/HRMNPublic.pdf --- {0}------------------------------------------------ # **Hanson McClain Retirement Network, LLC dba AW Securities (SEC ID No. 8-52250)** **Annual Audit Report** **December 31, 2020** # **PUBLIC DOCUMENT** Filed Pursuant to Rule 17-A-5(H)(3) as a Public Document {1}------------------------------------------------ **UNITED ST ATES SECURITJESANDEXCHANGECOMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response ... . .. 12.00 SEC FILE NUMBER 8-52250 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | REPORT FOR THE PERIOD BEGINNING 01/01/20 | | AND ENDING 12/31/20 | ---------- | |-----------------------------------------------------------------------------------------|--------------------------------------------------------|---------------------|--------------------------------| | | MM/DD/YY | - | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER-DEALER: Hanson McClain Retirement Network, LLC | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM 1.0. NO. | | 8775 Folsom Blvd., Suite 100 | | | | | | (No. and Street) | | | | Sacramento | California | | 95826 | | (City) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Corey Gamble | | | 916-475-1351 | | | | | (Area Code - Telephone Number) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | Ernst Wintter & Associates LLP | | | | | | (Name - if individual, state last, first, middle name) | | | | 675 Ygnacio Valley Road, Suite A200 Walnut Creek | | California | 94596 | | (Address) | (City) | (State) | (Zip Code) | | CHECK ONE: | | | | | IV I
Certified Public Accountant | | | | | Public Accountant | | | | | Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL 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 of/acts and circumstances relied on as the basis.for the exemption. See Section 240.* J *7a-5(e)(2)* > **Potential 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, _c_o_r_e_y_G_a_m_b_l_e _ _ | _________
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_ _ | _______
, swear (or affirm) that. to the best of
_ | |-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | _H_a_n_s_o_n_M_c_C_la_in_R_e_ti_re_m_e_nt_N_etw_o_r_k_, L_L_C _________ | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
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_ _ _ _ _____
_ ______ , as | | of December 31 | , 20 20 | --
, are true and correct. I further swear ( or affirm) that
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- | | | classified solely as that of a customer, except as follows: | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | | Nono | | | | | cco | | | Notary Public | Title | | EJ (a) Facing Page. | This report** contains (check all applicable boxes):
E] (b) Statement of Financial Condition.
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X). | D ( c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement | | | § (d) Statement of Changes in Financial Condition.
(e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
§ (g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule l 5c3-3. | D (j) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule l 5c3-J and the | | | consolidation.
E] (I) An Oath or Affirmation.
D (m) A copy of the SIPC Supplemental Report. | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
D (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. | \*\* *For conditions of confidential treatment of certain portions of this .filing, see section 240.* J *7a-5(e)(3).* {3}------------------------------------------------ **December 31, 2020** # **Table of Contents** | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|---| | Statement of Financial Condition | 2 | | Notes to the Financial Statement | 3 | {4}------------------------------------------------ *675 Ygnacio Valley Road, Suite A200 (925) 933-2626 Walnut Creek, CA 94596 Fax (925) 944-6333* ## **5HSRUWRI,QGHSHQGHQW5HJLVWHUHG3XEOLF\$FFRXQWLQJ)LUP** 7RWKH0HPEHURI +DQVRQ0F&ODLQ5HWLUHPHQW1HWZRUN//& ### **2SLQLRQRQWKH)LQDQFLDO6WDWHPHQW** :H KDYH DXGLWHG WKH DFFRPSDQ\LQJ VWDWHPHQW RI ILQDQFLDO FRQGLWLRQ RI +DQVRQ 0F&ODLQ 5HWLUHPHQW 1HWZRUN //& WKH ³&RPSDQ\´ DV RI 'HFHPEHU DQG WKH UHODWHG QRWHV FROOHFWLYHO\ UHIHUUHG WR DV WKH ILQDQFLDO VWDWHPHQW ,Q RXU RSLQLRQWKHVWDWHPHQWRIILQDQFLDOFRQGLWLRQSUHVHQWVIDLUO\LQDOOPDWHULDOUHVSHFWVWKHILQDQFLDOSRVLWLRQRI+DQVRQ0F&ODLQ 5HWLUHPHQW 1HWZRUN //& DV RI 'HFHPEHU LQ FRQIRUPLW\ ZLWK DFFRXQWLQJ SULQFLSOHV JHQHUDOO\ DFFHSWHG LQ WKH 8QLWHG6WDWHVRI\$PHULFD #### **%DVLVIRU2SLQLRQ** 7KLVILQDQFLDOVWDWHPHQWLVWKHUHVSRQVLELOLW\RIWKH&RPSDQ\¶VPDQDJHPHQW2XUUHVSRQVLELOLW\LVWRH[SUHVVDQRSLQLRQRQ WKH&RPSDQ\¶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¶VDXGLWRUVLQFH :DOQXW&UHHN&DOLIRUQLD )HEUXDU\ {5}------------------------------------------------ # Statement of Financial Condition December 31, 2020 | Assets | | |----------------------------------------|-----------------| | Cash | \$
842,331 | | Commissions receivable | 247,024 | | Marketing fees receivable | 58,935 | | Prepaid expenses and other assets | 46,476 | | Note receivable | 39,760 | | Total Assets | \$
1,234,526 | | | | | Liabilities and Member's Capital | | | Accounts payable and accrued expenses | \$
23,219 | | Accrued compensation and benefits | 52,279 | | Due to related parties | 3,279 | | Total Liabilities | 78,777 | | Member's Capital | 1,155,749 | | Total Liabilities and Member's Capital | \$
1,234,526 | See independent auditor's report and accompanying notes. {6}------------------------------------------------ ## **Notes to the Financial Statement** ## **December 31, 2020** ## **1. Organization** Hanson McClain Retirement Network, LLC (the "Company"), dba AW Securities was originally formed as a California limited liability company in July 1998. On July 6, 2017, the Company converted from a California limited liability company to a Delaware limited partnership and changed its name from Hanson McClain Retirement Network, LLC to Hanson McClain Retirement Network, LP. On October 27, 2020, the Company converted to Hanson McClain Retirement Network, LLC, a Delaware limited liability company. The Company is owned 100% by Allworth Financial Group, LP ("AFG"). The Company is registered as a broker-dealer with the Securities and Exchange Commission since July 2000, and is a member of the Financial Industry Regulatory Authority (FINRA). The Company provides marketing and training support to independent financial advisors. The Company earns revenue related to the sale of mutual funds, variable annuities and earns 401(k) advisory fees. ## **2. Significant Accounting Policies** ### **Cash and Cash Equivalents** For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. At December 31, 2020, the Company had no cash equivalents. ### **Commissions Receivable** The Company evaluates its accounts receivable and estimates the provision for doubtful accounts based on historical collection experience, delinquency rates, bankruptcies, and information obtained about and/or provided by the person or entity who owes the Company and other current economic conditions. Past due balances over 30 days are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company considers all accounts receivable to be fully collectable, and therefore there is no allowance at December 31, 2020. ### **Marketing Fees Receivable** The Company accrues marketing fees which resulted from trades that occurred in the year ended December 31, 2020 but which were not collected before the end of the year. The Company considers marketing fees receivable to be fully collectible, and accordingly, no allowance for doubtful accounts has been provided. ### **Financial Instruments – Credit Losses** In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes how entities assess and measure credit losses of certain financial instruments, including available-for-sale securities and accounts receivable. The Company adopted the new standard on January 1, 2020. The adoption of the standard did not have a material impact on the Company's financial statements. ### **Use of Estimates** The preparation of financial statements in accordance 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 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 and may have an impact on future periods. {7}------------------------------------------------ ## **Notes to the Financial Statement** ## **December 31, 2020** ## **2. Significant Accounting Policies (Continued)** ### **Fair Value of Financial Instruments** Unless otherwise indicated, the fair values of all reported assets and liabilities that represent financial instruments (none of which are held for trading purposes) approximate the carrying values of such assets and liabilities. The Company has no financial instruments required to be reported at fair value on a recurring basis. ### **Income Taxes** The Company is a single member limited liability company and it is treated as a disregarded entity for tax purposes. In lieu of income tax, the Company passes 100% of its taxable income and expenses to is sole member. Therefore, no provision or liability for federal or state income taxes is included in these financial statements. The Company is, however, subject to the annual California LLC tax of \$800 and a California LLC fee based on gross revenue. The Company is no longer subject to examinations by major tax jurisdictions for years before 2016. ## **3. Risk Concentration** At December 31, 2020, the Company held cash deposits at a financial institution which were in excess of applicable federal insurance limits by \$592,409. ### **4. Postretirement Plan** The Company maintains a pension plan consistent with provisions under section 401(k) of the Internal Revenue Code. Under this plan employees may make an elective deferral to reduce their taxable gross wages. ### **5. Net Capital Requirements** The Company is subject to the Securities and Exchange Commission's uniform net capital rule (Rule 15c3-1) which requires the Company to maintain a minimum net capital equal to or greater than \$50,000 and a ratio of aggregate indebtedness to net capital not exceeding 15 to 1, both as defined in Rule 15c13-1. At December 31, 2020, the Company's net capital was \$1,010,578 which exceeded the requirement by \$960,578. ### **6. Related Party Transactions** Under an overhead sharing agreement, AFG, the Company and the Company's related party by common ownership, Allworth Financial, LP ("AWF"), share certain administrative services, primarily, human resource management and accounting services. In addition, the Company reimburses related party and is reimbursed by related party for various payments made to vendors by one related party on behalf of the other*.* At December 31, 2020, \$3,279 was the payable to AWF for these services and reimbursements. The Company's results of operations and financial position could differ significantly from those that would have been obtained if these entities were unrelated. {8}------------------------------------------------ ## **Notes to the Financial Statement** ## **December 31, 2020** ## **7. Revenue from Contracts with Customers** ### **Contract Costs** The Company records commissions and related clearing expenses on the trade date under ASU No. 2014-09. The Company believes that the performance obligation is satisfied on the trade date as that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. ## **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 has receivables related to revenue from contracts with customers of \$329,574 at January 1, 2020 and \$305,959 at December 31, 2020. The Company had no deferred revenue as of December 31, 2020 and January 1, 2020. ## **8. Note Receivable** On April 15, 2019, the Company entered into a note receivable upon the termination of a joint marketing agreement with a former marketing partner. The terms of the agreement require the marketing partner to pay the Company \$54,670 (the "Tail"), payable in 22 equal quarterly payments of \$2,485 each until the Tail is paid in full. The note receivable balance was \$39,760 at December 31, 2020. Future principal receivable under the note: | Year | Amount | |-------|---------------| | 2021 | 9,940 | | 2022 | 9,940 | | 2023 | 9,940 | | 2024 | ----
9,940 | | Total | \$39,760 | ### **Risks and Uncertainties** The global pandemic caused by COVID-19 developed rapidly in 2020 and resulted in a high level of uncertainty and volatility that impacted businesses in all sectors. At this stage, the impact to the Company's business and financial results has not been significant based on the type of business conducted. Based on management's experience to date, management expects this to remain the case. The Company has taken certain health and safety operational measures and continues to follow government policies and advice. While there has not been a material impact thus far, the timeframe and outcome of the pandemic are uncertain. ### **Subsequent Events** The Company has evaluated subsequent events through February 2, 202, the date on which the financial statements were issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.