As we continue our series on getting to know our Finance teams and all the work that they do, this week we introduce you to ESI Finance:
- Tell us about the members of your team.
Eric Kucinskas, a CPA and FINRA Series 27 licensee, is ESI’s acting Financial and Operations Principal (FinOp), as well as a Director of Financial Reporting and resident investment accounting expert. Carrie Fox and Jaired Stewart have Series 99 (Operations Professional) licenses and passed the FINRA Securities Industry Essentials (SIE) exam. They are two key members of our ESI finance team, and also support Life and Annuity financial reporting.
- Can you give us an overview of the ESI Finance function?
The primary function of the team is to provide comprehensive accounting, regulatory compliance, and financial planning and analysis support for ESI. Due to regulatory deadlines, we close the books and report financials every month, which is critical for the firm’s continued operations. We also support ESI’s business initiatives and internal and external audits.
- Who are your customers? Who do you typically work and partner with?
Internally, our primary customers are the ESI Management Team and Board of Directors, as well as Accounts Payable, Internal Audit, and Financial Reporting. Externally, we support FINRA, the primary SEC regulator of broker-dealers, PwC, our external financial auditors, and the Securities Investor Protection Corporation (SIPC).
- Broker dealers are a highly regulated business. Tell us about some of the financial regulatory requirements that ESI is subject to.
The most notable requirements are Net Capital Compliance, to ensure adequate regulatory solvency, and standardized financial information for FINRA, including monthly and quarterly FOCUS filings, quarterly Supplemental Statement of Income (SSOI), and annual audits and reports which are submitted to the SEC through the EDGAR database. The finance team requires licensures (as noted in the bios above), and ESI must be a SIPC member to protect customers.
- ESI has been an important part of our business for many years. How does it fit in?
Founded in 1968, ESI is NLG’s wholly owned introducing broker-dealer and advisor services firm. It allows licensed agents to sell security products, including managed assets, variable annuities, mutual funds, and general securities. With an ESI relationship, our licensed agents can sell multiple products to a customer. Like our Life and Annuity business, ESI is undergoing tremendous growth with March of 2022 being a record-setting month for sales!
- Tell us something about what you do that would surprise us?
ESI has a moment-to-moment net capital requirement (meaning that we must ensure ESI can continue to meet any and all obligations with a sufficient cushion on a given day). If we cannot demonstrate this to a regulator upon demand, ESI cannot sell products until it is remediated.