# THRIVENT DISTRIBUTORS, LLC X-17A-5 (2021-02-26) — Broker-dealer annual report
- Company: THRIVENT DISTRIBUTORS, LLC
- Form: X-17A-5
- Filed: 2021-02-26
- Period: 2020-12-31
- Accession: 0001637391-21-000003
- CIK: 1637391
- File #: 8-69606
- Material weakness: No
- Auditor: PricewaterhouseCoopers, LLP
- Auditor location: Minneapolis, MN
- Contact: Jeffrey D. Cloutier
- Phone: 6128446401
- Signed by: Jeffrey D. Cloutier (Chief Financial Officer)
Original filing: https://www.sec.gov/Archives/edgar/data/1637391/000163739121000003/tdl2020auditreportshortfinal.pdf
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## STATEMENT OF FINANCIAL CONDITION
Thrivent Distributors, LLC SEC File Number: 8-69606 For the Year Ended December 31, 2020 With Report of Independent Registered Public Accounting Firm
# **thrivent®**
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**L1'1TEDSTATES SECURITIESAND EXCHA 'lGEC0.\1Ml5SION Washington, D.C. 20549**
0 MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response .. .... 12 .00
# **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill**
| SEC FILE NUMBER | |
|-----------------|--|
| 8-69606 | |
**FACl:"iC PAGE** Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and l{ule I 7a-5 Thereunder
| REPORT FOR TIIE PERIOD BEGI!\J\:ING 01/01/2020
AND ENDING 12/31/2020 | | | | |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|---------|----------------------------------|--|
| | MMIDD YY | | l\!M/DD1YY | |
| | A. REGISTRANT IDE:\TIFICATJON | | | |
| NA\1E Of BROKER-DE/\LJ:.R: Thrivent Distributors, LLC | | | OFFICIAL USE ONLY | |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: ( Do not use P.O. Aux :-.lo. I
901 Marquette Avenue, Suite 2500 | | | FIRM 1.0. NO. | |
| | (:slo. and S1ree1) | | | |
| Min~~apolis | MN | | 55402-3211 | |
| (City) | (State) | | (Zip Colle) | |
| NAME AND TELEPHOl'\E !\UMBER Of PERSOJ\ TO CONTACT IN REGARD TO THIS REPORT
Jeffrey D. Cloutier | | | 612-844-6401 | |
| | | | Tclcphooc 'sumhcr)
(Arca Code | |
| | B. ACCOlJNTANT IDENTIFICATION | | | |
| INDEPENDENT PUBLIC ACCOU~TANT whose opinion is contained in 1h1s Report* | | | | |
| PricewaterhouseCoopers, LLP | | | | |
| | (Name - if indiv,dunl. stare last, first. middle name) | | | |
| 45 South 7th St, Suite 3400 | Minneapolis | MN | 55402 | |
| (Add re~~) | (City) | (State) | (Zip Code) | |
| C HECK O~E: | | | | |
| I
I
II'
Certified Public Accountant
DPublic Accouniant
A,a:ountant not resident in United States or any of its possessions.
D | | | | |
| | FOR OFFICIAL USE ONLY | | | |
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*\*Claims for exemprionfrom !he requirement* 1/u111he *tmmwl report be cu1•erc!d by the opinion oftm independent puhli,.: accountant must he supported by a statement ojfacts and circumstances relied on as the basis.for the exemption. See Section J40.* J *7a-5(e)( ])*
> Potential persons who are to respond to the collection of information contained in th is form are not required to respond unless the form displays a currently valid 0MB control number.
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### **0 .-\ TH OR .--\ FFIIOIATIO'\**
| my knowlt:dgc and bt:licf the accompanying fina ncial statement and ~upporting sche-----------
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Thrive nt Distributors, LLC
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of December 31
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neither the company nor any panncr. proprietor. principal orticcr or director has an~ proprietary interest in any account
classi tied solely as that of a customer. except as fo llows:
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Nota'y Publtc
State 01 M ,nneso 1a
My Comm,ss,on Expires
Chief Financial Officer
J anuary 3 1. 2026
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Title
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0 (a) Facing Page.
E] (bl Statement of Financial C'ondnion.
D (c)
Statement of Income (l.os~) or, ir there i<; other comprehensive income in the pennri(s) pre"ented. a ~latcmcnt
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Statement of Changes i n Financial Cond ition
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Statement of Change<; in Stockholders· Equity M Partners' or Sole Proprietors' Capital.
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S1a1emcn1 of Changes in Liabilities Subordinated to Claims of Cred11ors.
(f)
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Computation of ·e1 Capital.
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Computa11on for Dc1crmina110n orR-.scrvc Requirement:, Pursuant 10 Ruic 15c3-3.
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Information !{ elating to the Possession nr Control Kequircments Undc-r Ruic I 5c3-3.
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in:mt'nts Umkr Exhihit A of Ruic I Sc~-,.
D <"> ~ Re,·onciliation hcLween the audited and unaudited Statement,, of Finan.:1al Condition with rc pect 10 mc:tlwds or
con,;o I i(I) An Oath or Affirmation.
(m) •\ copy of the SIP<. Supplcmenial Report.
ln) A repurt describing an} materi al madequacies found 10 e\ i~t or found 10 ha, e existed ~mce the d;ne td the pre\ iou~ audit. | I. Jeffrey D. Cloutier | . swear (or affirm) that. to !he best of |
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Thrivent Distributors, LLC Statement of Financial Condition For the year ended December 31, 2020
## **Contents**
| Report of Independent Registered Public Accounting f irm 1 | |
|--------------------------------------------------------------|--|
| Statement of financial Condition 2 | |
| Notes to Statement of Financial Condition 3 | |
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## **Report of Independent Registered Public Accounting Firm**
To the Board of Managers and Member of Thrivent Distributors, LLC
## *Opinion* **on** *the Financial Statement* **-** *Statement of Financial Condition*
We have audited the accompanying statement of financial condition of Thrivent Distributors, LLC (the "Company") as of December 31, 2020, including 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 Company as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.
## *Basis for Opinion*
The 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 of this financial statement 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.
February 25, 2021
We have served as the Company's auditor since 2016.
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| Cash and cash equivalents
\$
Receivables:
Distribution fees from Thrivent Mutual Funds
Due from affiliates
Due from other entities
Deferred tax assets
Other assets
Total assets
\$ | 11,223
2,929
3,073
178
461
84 |
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| | 17,948 |
| Liabilities and members' equity | |
| Due to affiliates
\$ | 5,480 |
| Other accrued liabilities | 559 |
| Income taxes due to affiliates | 97 |
| Total liabilities | 6,136 |
| Commitments and contingencies (see note 5) | |
| Member's equity: | |
| Additional paid - in capital | 10,850 |
| Retained earnings | 962 |
| Total member's equity | 11,812 |
| Total liabilities and member's equity
\$ | |
*The accompanying notes are an integral par/ of this financial statement.*
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#### **Note 1. Nature of Operations and Significant Accounting Policies**
#### **Nature of Operations**
Thrivent Distributors, LLC (the "Company") is organized under the laws of the State of Delaware and was incorporated in the State of Delaware on the 23rd of February 2015. The Company is a wholly owned subsidiary of Thrivent Financial Holdings, Inc. ("Holdings"). Holdings is a wholly owned subsidiary of Thrivent Financial for Lutherans ("Thrivent" ), a fraternal benefit society and registered investment adviser. The Company is a limited purpose broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The company conducts business in various states and is registered with the applicable regulatory agencies in those states. The company is a member of the Securities Investor Protection Corporation ("S!PC"). The Company provides underwriting and distribution services for the Thrivent Mutual Funds (the "Funds"), a Massachusetts business trust, Thrivent Church and Income Fund, a Delaware statutory trust, the Thrivent Series Funds, Inc., a Minnesota Corporation, Thrivent Cash Management Trust, a Massachusetts business trust and Thrivent Core Funds, a Delaware statutory trust. The Company's distribution services are performed pursuant to distribution agreements.
#### **Basis of Financial Statement Presentation**
The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. These accounting estimates reflect the best judgment of management and actual amounts could differ significantly from those estimates.
#### **Significant Accounting Policies**
The accompanying statement of financial condition has been prepared in accordance with U.S. generally accepted accounting principles ("GAAP").
The significant accounting practices used in preparation of the statement of financial condition are summarized as follows:
#### *Cash and Cash Equivalents*
Cash and cash equivalents consist of cash and investments in a money market mutual fund, of which \$10,979 was invested in registered money market funds as of December 31, 2020. The Company considers all highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are carried at fair value. The fair value of cash equivalents is based on quoted daily net asset values of the invested fund and are classified as Level I (uses quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date).
#### *Receivables*
Receivables for distribution fees include **l** 2b-I distribution and servicing fees from the Funds for which the Company has satisfied its obligations prior to year-end and expects to receive payment for those services performed after year end. Receivables due from the affiliates include marketing and administrative support services for which the company has satisfied its obligations prior to the year end and expects to receive payment for those services performed after year end from Thrivent Asset Management, LLC ("TAM") under a contractual revenue sharing agreement that contain both a fixed and variable portion calculated as a percentage of net assets of the Thrivent Mutual Funds. The Company also has receivables due from other entities which are front-end sales load for which the Company has satisfied its obligations prior to the year end and expects to receive payment for those services performed after year end.
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#### *New Accounting Guidance*
#### Credit Losses
Effective January 1, 2020, the Company adopted ASU 2016-13 {Topic 326 - Financial Instruments--Credit Losses) which updated the accounting for certain types of financial instruments by replacing the current incurred loss model for estimating credit losses with a new model that requires an entity to estimate the expected credit losses over the life of its financial assets as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The standard was adopted and did not have an impact lo the Company's financial statement as there are no material receivables with credit losses due to their short term nature of being settled monthly.
#### **Note 2. Income Taxes**
The Company is a single member LLC owned by Holdings. As such, it is a disregarded entity for Federal income tax purposes. Nonetheless, its operations are included in the consolidated federal income tax return of Holdings and Holdings' wholly owned subsidiaries. Consolidated federal income tax liabilities or credits, including utilization of loss carryforwards, are allocated among the affiliated members in accordance with a tax-sharing agreement with Holdings and are settled quarterly. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be serried or realized. The deferred tax amounts are settled when the amounts are included in the consolidated tax return. Uncertain tax positions are recognized if they are more likely than not to be sustained upon examination, based on the technical merits of the position. The amount of tax benefit recognized is the largest amount of benefit that is greater than 50% likely of being realized upon settlement. A valuation allowance is recognized, if based on the weight of available evidence, it is more-likely-than-not (likelihood of more than SO percent) that some portion, or all, of the deferred tax asset will not be realized.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax assets as of December 31, 2020 were as follows:
| \$
406 |
|-----------|
| 55 |
| \$
461 |
| |
Al December 31, 2020 the Company had no federal or state net operating loss carryforwards.
The Company is required to establish a valuation allowance for any portion of the deferred income tax assets that management believes will not be realized. In the opinion of management, it is more likely than not that the Company will realize the benefit of the deferred income tax assets, and therefore, no such valuation allowance has been established.
There are no unrecognized or uncertain tax positions at December 31, 2020. Tax years 2020, 2019, 2018 and 2017 are open under the statute of limitations are subject to examination by the Internal Revenue Service.
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#### **Note 3. Net Capital Provisions and Regulatory Requirements**
As a registered broker dealer, the Company is subject to the SEC's uniform net capital rule (Rule I 5c3-I) which requires the Company to maintain minimum net capital. The Company computes its net capital requirements under the basic method provided for in Rule I Sc3-I, which requires the Company to maintain net capital equal to the greater of five thousand dollars or 6 2/3% of aggregate indebtedness to net capital.
Advances to affiliates, member distribution payments and other equity withdrawals are subject to certain notification and other provisions of the net capital rule or the SEC and other regulatory bodies.
At December 31, 2020, the Company's net capital of \$5,046 was \$4,637 in excess of the amount required to be maintained and the ratio of aggregate indebtedness to net capital was l :22 to l.
The Company claims exemption from Rule l 5c3-3 of the Securities and Exchange Commission under paragraph (k)( 1) of that rule.
#### **Note 4. Related-Party Transactions**
The amounts of revenue earned from afft.liates may not be reflective of revenues that could have been earned on similar levels of activity with unrelated third parties.
Receivables due from affiliates on the Statement of Financial Condition as of December 31, 2020, primarily rel are to revenue sharing from TAM of \$2,996.
Payables due to affiliates on the statement of financial condition as of December 31, 2020, primarily relates to 12b-I fees of \$2,904 and other distribution fees of \$1,628 to TIMI and \$948 to Thrivent for allocated expenses and costs under an intercompany services agreement.
#### **Note S. Commitments and Contingencies**
The Company may be involved in legal proceedings from time to time arising out of their business operations, including arbitrations and lawsuits involving private claimants, subpoenas, investigations and other actions by government authorities and self-regulatory organizations. These include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industry in which it operates. Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that regulators increase the scope or frequency of examinations of the Company or the financial services industry generally.
As witl1 other financial services Finns, the level of regulatory activity and inquiry concerning the Company's businesses remains elevated. From time to time, the Company receives requests for information from, and/or may be subject to exan1iuation or claims by the SEC, FINRA and other government authorities concerning the Company's business activities and practices. The number of reviews and investigations has increased in recent years with regard to many firms in the financial services industry, including the Company. The Company has cooperated and will continue to cooperate with the applicable regulators regarding their inquiries.
In view of the inherent difficulty of predicting tlie outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, the Company cannot estimate what the possible loss or range of loss related to such matters will be. The Company recognizes a liability with regard to a legal proceeding when it believes it is
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#### **Note S. Commitments and Contingencies** (cont.)
probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within tl1e range is a better estimate tlian any oilier amount, tlie Company accrues the minimum amount in tlie range. The Company maintains insurance coverage, including general liability, directors and officers, errors and omissions, excess entity errors and omissions and fide lity bond insurance. At December 31, 2020, the Company has not recorded an accrual for commitments and contingencies.
#### **Note 6. Subsequent Events**
As of February 25, 2021, whjch is the date the financial statement was available to be issued, the Company has evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure. No events or transactions were identified requiring further recogn ition or disclosure.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.