# BROOKFIELD OAKTREE WEALTH SOLUTIONS LLC X-17A-5 (2023-03-01) — Broker-dealer annual report - Company: BROOKFIELD OAKTREE WEALTH SOLUTIONS LLC - Form: X-17A-5 - Filed: 2023-03-01 - Period: 2022-12-31 - Accession: 0001861548-23-000002 - CIK: 1861548 - File #: 8-70722 - Type: Broker-dealer - Material weakness: No - Auditor: Deloitte & Touche LLP - Auditor location: New York, NY - Contact: Rafael Beck - Phone: 212-897-1690 - Website: deloitte.com - Signed by: David Levi (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1861548/000186154823000002/bows22s.pdf --- {0}------------------------------------------------ #### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ## **ANNUAL REPORTS FORM X-17A-5 PART Ill** | OMB APPROVAL | | | | |---------------------------|--|--|--| | OMB Number: 3235 0123 | | | | | Expires: Oct. 31, 2023 | | | | | Estimated average burden | | | | | hours per response:
12 | | | | SEC FILE NUMER 8 **FACING PAGE** Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FILING FOR THE PERIOD BEGINNING | _______
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AND ENDING | | | |---------------------------------|-------------|----------------|----------|--| | | MM/DD/VY | | MM/DD/VY | | | A. REGISTRANT IDENTIFICATION | | | | | #### &VSSOJMIPH 3EOXVII ;IEPXL 7SPYXMSRW 00' NAME OF FIRM: TYPE OF REGISTRANT (check all applicable boxes): ~ Broker-dealer □ Security-based swap dealer □ Major security-based swap participant □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 0MFIVX] 7XVIIX VH \*PSSV | | (No. and Street) | | | | | |--------------------------------------------------------------------------------------------------------|----------------------------------------------|----------------------------|-------------------------------------------|--|--| | 2I[
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| VFIGO\$MRXIKVEXIHWSPYXMSRW | | | | | (Name) | (Area Code -Telephone Number) | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
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=SVO | 2= | | | | | (Address) | (City) | (State) | (Zip Code) | | | | | | | | | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, ifapplicable) | | | #### **FOR OFFICIAL USE ONLY** \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(e)(l)(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.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** I, David Levi , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to Brookfield Oaktree Wealth Solutions LLCas of 12/31/22 , is true and correct. I further swear (or affirm) that neither the company nor 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. *.../J* · J1 t · *I* ;· .,,.-- *l I*I/~ / **Signature** Chief Executive Officer Title Official Seal Caroline Mary Murphy Notary Public State of Illinois My Commission Expires 7/7/2026 Notary Public {2}------------------------------------------------ #### **This filing\*\* contains (check all applicable boxes):** - [El (a) Statement of financial condition. - [El (b) Notes to unconsolidated or consolidated statement of financial condition, as applicable. - □ (c) Statement of income (loss) or, if there 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) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or members' or sole proprietor's equity, as applicable. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to unconsolidated or consolidated financial statements,, as applicable. - □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ G) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (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. - □ (1) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (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, of the 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 of financial condition. - [El (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. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [El (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (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. - □ (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. - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le 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 of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - □ (z) Other: \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a- *.* 7{d}(2), as applicable {3}------------------------------------------------ **(A wholly owned subsidiary of Brookfield US Holdings Inc.) Statement of Financial Condition December 31, 2022** {4}------------------------------------------------ # Deloitte. Deloitte & Touche LLP 30 Rockefeller Plaza, New York, NY 10112-0015 USA Tel: +1 212 492 4000 Fax: +1 212 489 1687 www.deloitte.com #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Brookfield Oaktree Wealth Solutions, LLC #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Brookfield Oaktree Wealth Solutions LLC, (the "Company"), as of December 31, 2022, 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 Company as of December 31, 2022, 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 this 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 presentation of the financial statement. We believe that our audit of the financial statement provides a reasonable basis for our opinion. February 28, 2023 We have served as the Company's auditor since 2021. {5}------------------------------------------------ **(A wholly owned subsidiary of Brookfield US Holdings Inc.)** #### **Statement of Financial Condition December 31, 2022** | Assets | | |---------------------------------------|------------------| | Cash | \$
11,933,878 | | Due from affiliates | 28,788,147 | | Fixed assets, net | 1,076,378 | | Other assets | 481,554 | | | | | Total assets | \$
42,279,957 | | | | | Liabilities and Member's Equity | | | Liabilities | | | Compensation payable | \$
17,101,610 | | Due to affiliates | 4,345,752 | | Accounts payable and accrued expenses | 1,190,136 | | Total liabilities | 22,637,498 | | | | | Member's equity | 19,642,459 | | | | | Total liabilities and member's equity | \$
42,279,957 | | | | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ **(A wholly owned subsidiary of Brookfield US Holdings Inc.)** #### **Notes to Statement of Financial Condition December 31, 2022** #### **1. Organization and Nature of Business** Brookfield Oaktree Wealth Solutions LLC (the "Company") is a limited liability company organized under the laws of the state of Delaware. The Company is a wholly owned subsidiary of Brookfield US Holdings Inc. (the "Parent"). The Company is a broker-dealer and as such is registered with the Securities and Exchange Commission (the "SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Parent is an indirect wholly owned subsidiary of Brookfield Asset Management ULC (the "Ultimate Parent" or "BAM"), a publicly listed entity. The U.S. dollar is the functional and presentation currency of the Company. The Company primarily distributes and wholesales investment funds that are managed by BAM and Oaktree Capital Management LP ("Oaktree"). The Company also serves as the dealer manager for Brookfield Real Estate Income Trust, Inc. ("BREIT"), a U.S. Securities and Exchange Commission registered real estate investment trust and Oaktree Strategic Credit Fund ("OSCF"), a perpetually offered, non-listed business development company. The liability of the Member is limited to the capital held by the Company. #### **2. Summary of Significant Accounting Policies** #### **Basis of Presentation and Use of Estimates** This financial statement was prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") which 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 statement and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. #### **Translation of Foreign Currencies** Monetary assets and liabilities denominated in foreign currencies are translated at December 31, 2022 rates of exchange. #### **Revenue Recognition** The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company follows a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. {7}------------------------------------------------ **(A wholly owned subsidiary of Brookfield US Holdings Inc.)** #### **Notes to Statement of Financial Condition December 31, 2022** #### **2. Summary of Significant Accounting Policies (continued)** #### *Service fee revenue* The Company has agreements with various affiliated entities, under which revenue earned for fundraising activities is limited to expenses incurred by the Company. This revenue is received through BAM and Oaktree. Service fee revenue is comprised of reimbursable expenses incurred by the Company during the fulfillment of services, including but not limited to compensation and benefits, and general and administrative expenses. In this arrangement, the Company is primarily responsible for fulfilling the services, has discretion in setting the price and is therefore acting as a principal for accounting purposes. As a result, the expense and related reimbursement associated with those services is presented on a gross basis. The reimbursements of such costs are paid in arrears. #### *Fund service fees and commissions*: Acting as the dealer manager for BREIT and OSCF (collectively, the "Funds"), the Company is entitled to receive commissions based on the transaction price of each applicable class of shares sold in the Offering and based on rates outlined in the offering. The Company recognizes commissions ("Commissions") upon the issuance of the Funds' shares on the trade date. Commissions earned are typically collected monthly. In accordance with its role as the dealer manager, the Company is also entitled to receive a shareholder servicing fee of 0.25% to 0.85% per annum of the aggregate net asset value ("NAV") of certain of the Funds' outstanding share classes, including certain feeder fund share classes. There is no shareholder servicing fee with respect to Class I shares. The shareholder service fees are accrued during the period in which they are earned. The shareholder service fees are variable consideration to be received in the future. This variable consideration is fully constrained since the consideration is dependent upon the future value of the shares and the length of time an investor retains the shares, both of which are outside of the Company's control. Therefore, the revenue related to the shareholder service fees is recognized when the Company can determine the fees monthly. The Company has entered into agreements with the selected dealers distributing the Funds' shares in the Offering, which provide, among other things, for the re-allowance of the full amount of the selling commissions and all or a portion of the shareholder service fees received by the Company to such selected dealers. Such re-allowance is recognized in the Commission income - affiliates line item on the Statement of Operations. Service fee revenue and service fee expense are recognized over the time in which the performance obligations are simultaneously provided by the Company and consumed by the customer. {8}------------------------------------------------ **(A wholly owned subsidiary of Brookfield US Holdings Inc.)** #### **Notes to Statement of Financial Condition December 31, 2022** #### **2. Summary of Significant Accounting Policies (continued)** #### **Allowance for Credit Losses** ASC Topic 326, Financial Instruments – Credit Losses ("ASC 326") impacts the impairment model for certain financial assets by requiring a current expected credit loss ("CECL") methodology to estimate expected credit losses over the entire life of the financial asset. The Company records the estimate of expected credit losses as an allowance for credit losses. For financial assets measured at an amortized cost basis the allowance for credit losses is reported as a valuation account on the statement of financial condition that is deducted from the asset's amortized cost. Changes in the allowance for credit losses are reported in credit loss expense. The Company identified fees and other receivables (including, but not limited to, receivables related to securities transactions, and advisory fees) as impacted by the guidance. The allowance for credit losses is based on the Company's expectation of the collectability of financial assets including fees receivable and due from affiliates utilizing CECL framework. The Company considers factors such as historical experience, credit quality, age of the balances and economic conditions that may affect the Company's expectation of the collectability in determining the allowance for credit losses. The Company's expectation is that credit risk associated with the receivables is not significant until they reach 90 days past due based on the contractual arrangement and expectation of collection. As of December 31, 2022, and for the period then ended the Company did not provide for or experience any credit losses. #### **Cash** All cash deposits are held by one financial institution and therefore are subject to the credit risk at that financial institution. The Company has not experienced any losses in such accounts and does not believe there to be any significant credit risk with respect to these deposits. #### **Income Taxes** The Company is a single member limited liability company and is treated as a disregarded entity for federal income tax reporting purposes. The Internal Revenue Code provides that any income or loss is passed through to the ultimate taxpaying entity for federal, state and certain local income taxes. Accordingly, the Company has not provided for federal, state or local income taxes. Additionally, any tax benefit that the Parent may receive is not remitted to the Company. At December 31, 2022, management determined that the Company had no uncertain tax positions that would require financial statement recognition. This determination will be subject to ongoing reevaluation as facts and circumstances may require. Interest and penalties assessed, if any, are recorded as income tax expense. The Parent's federal and state income tax returns are generally open for examination for years subsequent to 2018. #### **Stock Compensation** The Ultimate Parent provides compensation to certain key employees of the Company in the form of share-based awards with an option to settle in cash or shares. The expense for these share-based awards is recognized based on the grant date fair value and expensed on a proportionate basis consistent with the vesting features over the vesting period. {9}------------------------------------------------ **(A wholly owned subsidiary of Brookfield US Holdings Inc.)** #### **Notes to Statement of Financial Condition December 31, 2022** #### **2. Summary of Significant Accounting Policies (continued)** #### **Fixed Assets** The Company's fixed assets are stated at cost. Since the fixed assets are not yet in use, the accumulated depreciation is \$0. Repairs and maintenance are charged to expense as incurred. Upon disposition of fixed assets, if any, the related assets, and accumulated depreciation are removed from the accounts and any gain or loss credited or charged to income. For financial reporting, fixed assets are depreciated using the straight-line method over a period of 3-7 years for fixed assets. #### **3. Transactions with related parties** The Company maintains administrative services agreements with affiliates. Costs shared between affiliates are allocated based on factors specific to the respective services agreement. The following is a summary, at December 31, 2022, of balances owed to or from related parties: | Due from affiliates | | |-----------------------------------------|------------------| | Due from Brookfield US Inc. | \$
26,595,287 | | Due from Oaktree Capital Management LLC | 2,000,000 | | Other | 192,859 | | | \$
28,788,146 | | Due to af:ftliates | | Included in | | | | | | | |------------------------------------------------|--------------|-------------|---------|--------------|--|---------------|--|-------| | | Compensation | | | Due to | | | | | | | | | Payable | | | Affiliates | | Total | | Due to Brookfield Public Securities Group LLC | \$ | 2,375,444 | \$ | 587,413 | | \$ 2,962,857 | | | | Due to Brookfield Singapore PTE. LTD. | | 1,160,199 | | 1,687,886 | | 2,848,085 | | | | Due to BIM Canada ULC | | 1,416,386 | | 764,436 | | 2,180,822 | | | | Due to Brookfield Private Capital (UK) Ltd | | 907,996 | | 140,537 | | 1,048,533 | | | | Due to Brookfield Advisors (Hong Kong) Limited | | 202,766 | | 763,705 | | 966,471 | | | | Other | | 419,689 | | 401,775 | | 821,464 | | | | | \$ | 6,482,480 | | \$ 4,345,752 | | \$ 10,828,232 | | | All transactions with related parties are settled in the normal course of business. The terms of any of these arrangements may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties. #### **4. Employee deferred compensation awards** #### **Cash-settled deferred compensation** Deferred compensation awards were granted to select executives and senior employees (the "grantee"). The value of each award is tied to a Reference Investment, the hypothetical performance of an investment in a specific security or fund. The awards vest over periods of up to five years and are payable to the grantee in cash or shares of the Reference Investment, at the discretion of the Company, in accordance with the terms of the specific award agreements. {10}------------------------------------------------ **(A wholly owned subsidiary of Brookfield US Holdings Inc.)** #### **Notes to Statement of Financial Condition December 31, 2022** #### **4. Employee deferred compensation awards (continued)** At any time, the value of the liability for an award corresponds to the vested portion of the fair market value of the corresponding Reference Investment. At each reporting date, the Company marks to market a liability in respect of the vested portion of the awards. The total deferred compensation liability related to these awards at December 31, 2022 was \$1,819,780, and is included in compensation payable on the statement of financial condition. #### **Equity-settled share-based restricted stock plan – BAM** The Restricted Stock Plan awards executives with BAM Class A shares purchased on the open market ("Restricted Shares"). Under the Restricted Stock Plan, Restricted Shares awarded vest over a period of up to five years, except for Restricted Shares awarded in lieu of a cash bonus which may vest immediately. Vested and unvested Restricted Shares must be held until the fifth anniversary of the award date. Holders of vested Restricted Shares are entitled to vote Restricted Shares and to receive associated dividends. Employee compensation expense for the Restricted Stock Plan is charged against income over the vesting period. Prior to the commencement of operations of the Company, Restricted Shares were awarded by former employers. The obligations associated with these awards commenced for the Company upon employment for applicable employees. #### **5. Regulatory Requirements** The Company is subject to SEC Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934 and has elected to compute its net capital requirements in accordance with the Alternative Net Capital Method. As of December 31, 2022, the Company had net capital of \$4,344,580 which exceeded the required net capital by approximately \$4,091,580. The Company does not hold customers' cash or securities and, therefore, has no obligations under SEC Rule 15c3-3 under the Securities Exchange Act of 1934. #### **6. Financial risk management** The Company is exposed to credit risk as substantially all the cash of the Company is held by a single major money center bank. The Company manages its credit risk through careful selection of the financial institutions through which it conducts its business and clients to whom it provides services. The Company has minimal liquidity, foreign exchange, and market risk. #### **7. Subsequent events** Management of the Company has evaluated events or transactions that may have occurred since December 31, 2022, and determined that there are no material events that would require recognition or disclosure in the Company's financial statement except for the below. On February 24, 2023, the Company paid approximately \$15,400,000 of the compensation payable accrued as of December 31, 2022. \*\*\*\*\*\*\* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.