FOCUS Report Wells Nelson & Associates, L.l.c.

X-17A-5 [Paper] - FOCUS Report

Published: 2017-03-10 11:13:02
Submitted: 2017-02-27
Period Ending In: 2016-12-31
scanned.pdf Scanned paper document


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                  Section
                                     FORM X-17A-5
                                                                                                                                 SEC FILE NUMBER
                 FEB 27 2011             PART III
                                                                                                                                 8-52490
               Washi~n1gton DC
                                         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                                01/01/16                 AND ENDING                          12/31/16
                                                              NM4MD/YY                                                    1 M/ D/YY


                                       A. REGISTRANT IDENTIFICATION


NAME OF BROKER-DEALER: WELLS, NELSON & ASSOCIATES,LLC                                                                   OFFICIAL USE ONLY

ADDRESS OF PRINCIPAL PLACE OF BUSINESS:(Do not use P.O. Box No.)
                                                                                                                                FIRM I.D. NO.
         TWO LEADERSHIP SQUARE,211 N. ROBINSON,STE. 1600
                                                             (No. and Street)

         OKLAHOMA CITY                                            OK                                                73102
                       (City)                                    (State)                                           (Zip Code)

NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
      EDWARD F. WELLS                                                                                                       405-239-9000
                                                                                                                        (Area Code — Telephone Number)


                                      B. ACCOUNTANT IDENTIFICATION


INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*

       MOSS ADAMS LLP
                                                  (Name — ifindividual, state last,first, middle name)


       8750 N. CENTRAL EXPRESSWAY STE. 300                     DALLAS                                    TX                       75231
         (Address)                                (City)                                                 (State)                   (Zip Code)


CHECK ONE:

              d Certified Public Accountant
               ❑ Public Accountant
               ❑ Accountant not resident in United States or any of its possessions.

                                                 FOR OFFICIAL USE ONLY




*Claimsfor exemptionfrom the requirement that the annual report be covered by the opinion ofan independent public accountant
must be supported by a statement offacts and circumstances relied on as the basisfor the exemption. See Section 240.17a-5(e)(2)


                                                                                                                                                i~t~


                                                                           OATH OR AFFIRMATION

1,      EDWARD F. WELLS                                                                  ,swear (or affirm) that, to the best of
my knowledge and beliefthe accompanying financial statement and supporting schedules pertaining to the firm of

                                              WELLS NELSON & ASSOCIATES LLC                                                          , as
of                                              DECEMBER 31                                16
                                                                                           1   20   ,are true and correct. I further swear
(or affirm)that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account
classified solely as that of a customer, except as follows:
        -----------------------------------
                                                ;4      JOYCE A. SANDERS
                                              SEAL
                         Notary Public        i
                      State of Oklahoma       i                                                     Signature
        Commisalon 001004352 Expires 03113117
                                                                                      President
                                                                                                       Title

                                                                      D
                                                     otary Public

This report ** contains(check all applicable boxes):
EY(a)Facing Page.
    (b)Statement of Financial Condition.
E]/(c)Statement of Income (Loss).
    (d)Statement of Changes in Financial Condition.
EY(e)Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
❑ (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
EK(g)Computation of Net Capital.
EY (h)Computation for Determination of Reserve Requirements Pursuant to Rule 150-3.
EY (i) Information Relating to the Possession or Control Requirements Under Rule 156-3.
EY 0) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 15c3-1 and the
         Computation for Determination ofthe Reserve Requirements Under Exhibit A of Rule 156-3.
❑ (k)A Reconciliation between the audited and unaudited Statements ofFinancial Condition with respect to methods ofconsolidation.
W   (1) An Oath or Affirmation.
VW       A copy of the SIPC Supplemental Report.
❑ (n)A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit.

**For conditions ofconfidential treatment ofcertain portions ofthisfiling, see section 240.17a-5(e)(3).


                                                                                               WWW.MOSSADAMS.COM




          REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board Members
Wells, Nelson,& Associates, LLC

We have audited the accompanying statement of financial condition of Wells, Nelson, & Associates, LLC
(the Company) as of December 31, 2016, and the related statements of income, changes in member's
equity, and cash flows for the then year ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. The Company is
not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Wells, Nelson, & Associates, LLC as of December 31, 2016, and the results of its
operations and its cash flows for the year then ended in conformity with accounting principles generally
accepted in the United States.

The information in Schedule I has been subjected to audit procedures performed in conjunction with
the audit of Wells, Nelson, & Associates, LLC's financial statements. The information in Schedule I is the
responsibility of Wells, Nelson, & Associates, LLC's management. Our audit procedures include
determining whether the information in Schedule I reconciles to the financial statements or the
underlying accounting and other records, as applicable, and performing procedures to test the
completeness and accuracy of the information presented in Schedule I. In forming our opinion on the
information in Schedule 1, we evaluated whether the information in Schedule I, including its form and
content, is presented in conformity with 17 C.F.R. § 240.17a-S. In our opinion, the information in
Schedule I is fairly stated in all material respects in relation to the financial statements as a whole.




Dallas, Texas
February 23,2017
                                                                                                       Praxity   MEMBER.•
                                                                                                                         F
                                                                                                       SLUBAL ALLIANCE Of-
                                                                                                       INDEPENDENT FIRMS


                                         WELLS NELSON & ASSOCIATES, LLC
                                           Statement of Financial Condition
                                                 December 31, 2016

                                                        ASSETS

Cash and cash equivalents                                                                            $     341,717
Deposits with clearing broker-dealer                                                                     1,904,085
Receivable from clearing broker-dealer                                                                       8,906
Interest receivable                                                                                          5,719
Securities owned at fair value                                                                            442,082
Furniture, equipment and leasehold improvements, net                                                        85,338
Other assets                                                                                                16,473

                                                                                                     $   2,804,320

                                         LIABILITIES AND MEMBERS'EQUITY

Liabilities:
  Accounts payable                                                                                         17,262




                                                                                                     $
  Accrued expenses                                                                                        230,594
  Payable to clearing broker-dealer                                                                       452,946

    Total liabilities                                                                                     700,802

Members'equity                                                                                           2,103,518

                                                                                                     $   2,804,320




                        The accompanying notes are an integral part of these financial statements.


                                       WELLS NELSON & ASSOCIATES, LLC
                                                 Statement of Income
                                       For the Year Ended December 31, 2016



Revenues:
  Commissions                                                                                          1,998,584




                                                                                                   $
  Trading and investment gains                                                                         1,097,445
  Underwriting and advisory fees                                                                       1,442,326
  Interest                                                                                                46,724
  Other                                                                                                  105,399

                                                                                                       4,690,478

Expenses:
  Employee compensation and benefits                                                                   3,017,046
  Brokerage and clearance fees                                                                           161,982
  Communications                                                                                         138,823
  Occupancy and equipment costs                                                                          304,594
  Promotional costs                                                                                      129,735
  Interest                                                                                                10,929
  Data processing costs                                                                                   27,792
  Regulatory fees and expenses                                                                            96,902
  Errors and bad debt                                                                                        827
  Other                                                                                                  176,282

                                                                                                       4,064,912

   Net income                                                                                      $    625,566




                      The accompanying notes are an integral part of these financial statements.


                                      WELLS NELSON & ASSOCIATES, LLC
                                     Statement of Changes in Members' Equity
                                      For the Year Ended December 31, 2016



                                                                                  Number of            Members'
                                                                                    Units               Equity

Balance, January 1, 2016                                                                 1,367     $     1,552,952

Distributions                                                                                             (75,000)

Net income                                                                                                625,566

Balance, December 31, 2016                                                               1,367     $     2,103,518




                      The accompanying notes are an integral part of these financial statements.


                                          WELLS NELSON & ASSOCIATES, LLC
                                                 Statement of Cash Flows
                                          For the Year Ended December 31, 2016



Cash flows from operating activities
  Net income                                                                                        $    625,566
 Adjustments to reconcile net income to net
   cash provided (used) by operating activities:
      Depreciation and amortization                                                                       40,096
      Changes in operating assets and liabilities:
        Increase in deposits with clearing broker-dealer                                                (849,257)
        Decrease in receivable from clearing broker-dealer                                               499,249
        Increase in interest receivable                                                                   (1,840)
        Decrease in securities owned                                                                     673,467
        Increase in other assets                                                                         (11,519)
        Decrease in accounts payable                                                                     (13,040)
        Decrease in accrued expenses                                                                     (11,635)
        Decrease in payable to clearing broker-dealer                                                   (646,496)
      Net cash provided (used) by operating activities                                                  304,591

Cash flows from investing activities
  Purchase of furniture, equipment and leasehold improvements                                           (26,694)
      Net cash provided (used) by investing activities                                                  (26,694)

Cash flows from financing activities
  Distributions                                                                                         (75,000)
     Net cash provided (used) by financing activities                                                   (75,000)

Net change in cash and cash equivalents                                                                 202,897
Beginning cash and cash equivalents                                                                     138,820
Ending cash and cash equivalents                                                                    $   341,717

Supplemental Disclosures
  Cash paid for:
    Interest                                                                                        $    10,929




                       The accompanying notes are an integral part of these financial statements.


                                         WELLS NELSON & ASSOCIATES, LLC
                                            Notes to Financial Statements
                                                December 31, 2016


Note 1- Summary of Significant Accounting Policies

         Basis of Financial Statement Presentation
         The financial statements present the financial position and results of operations of Wells Nelson & Associates,
         LLC (the "Company"), an Oklahoma limited liability company, which was formed on February 7, 2000. Three
         individuals who are members of management and/or employees of the Company, own the majority of the
         membership interests. The Company shall terminate on February 28, 2050, unless earlier terminated. Profit and
         loss are allocated and distributions are made to members in accordance with their percentage ownership of
         outstanding units. The number of membership units authorized must be approved by the majority of the board of
         members. Each members liability is limited to its capital account balance. The Company generally makes
         distributions to its members around March of each year.

         Business Operations
         The Company is a broker-dealer in securities registered with the Securities and Exchange Commission ("SEC") under
         Rule 15c3-3(k)(2)(ii) which provides that all the funds and securities belonging to the Company's customers would be
         handled by a clearing broker-dealer. In accordance with the provisions of this rule, the Company executes all of its
         customers' transactions on a fully-disclosed basis, through an unaffiliated clearing broker-dealer, located in
         Dallas, Texas, which carries the accounts and securities of the Company's customers. Principal business
         activities are conducting principal and agency transactions and providing underwriting and advisory services for
         customers primarily located in Oklahoma.

         Underwriting and Advisory Fees
         Underwriting and advisory fees include gains, losses, and fees, net of syndicate expenses, arising from securities
         offerings in which the Company acts as an underwriter or agent. Underwriting and advisory fees also include
         fees earned from providing financial advisory services. Underwriting and advisory fees are recorded at the time
         the underwriting is completed and the income is reasonably determinable.

         Securities Transactions
         Profit and loss arising from all securities transactions entered into for the account and risk of the Company are
         determined using the specific identification method and are recorded on a trade date basis. Customer's
         securities transactions are reported on a settlement date basis with related commission income and expense
         reported on a settlement date basis. The amounts recorded for commission income and expense for customers'
         securities transactions approximate the amounts that would be recorded on a trade date basis.

         Cash and Cash Equivalents
         For purposes of the statement of cash flows, the Company has defined cash equivalents as highly liquid
         investments, with original maturities of less than ninety days, not held for sale in the ordinary course of business.


                                          WELLS NELSON & ASSOCIATES, LLC
                                             Notes to Financial Statements
                                                 December 31, 2016


Note 1- Summary of Significant Accounting Policies - continued

          Furniture, Equipment and Leasehold Improvements
          Furniture, equipment and leasehold improvements are stated at cost less accumulated depreciation.
          Depreciation is provided principally by accelerated and straight-line methods using estimated useful lives of five
          to seven years. Leasehold improvements are amortized over the lesser of the economic useful life of the
          improvement or the term of the lease.

          Income Taxes
          The Company is treated and taxed as a partnership for federal income tax purposes. Accordingly, any tax liability is
          the responsibility of the individual members.
          The Company applies FASB ASC 740-10 relating to accounting for uncertain tax positions, ASC 740-10 prescribes a
          recognition threshold and measurement process for accounting for uncertain tax positions and also provides guidance
          on various related matters such as derecognition, interest, penalties, and disclosures required. The Company does
          not have any uncertain tax positions.

          The Company's income tax returns are subject to examination over the statutes of limitations, generally three years
          from the date of filing.

          Use of Estimates
          The preparation of financial statements in conformity with accounting principles generally accepted in the United
          States of America ("U.S. GAAF) requires the Company 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 statements. Actual results could differ from those estimates.

Note 2 - Deposits with and Receivable from Clearing Broker-Dealer

          Deposits with clearing broker-dealer include cash required to be maintained at the clearing broker-dealer for
          clearing and trading activities. Receivable from clearing broker-dealer is comprised of commissions, trading profits,
          and other items. Such amounts are normally collected between five and thirty-five days after month end.


Note 3 - Receivable from Other Broker-Dealer

          Receivable from other broker-dealers include underwriting fees from securities offerings in which the Company acts
          as an underwriter. Such amounts are normally collected within thirty days after month end. There were no such
          receivables at December 31, 2016.


                                            WELLS NELSON & ASSOCIATES, LLC
                                               Notes to Financial Statements
                                                   December 31, 2016


Note 4 - Securities Owned

         Securities owned at fair value as of December 31, 2016 are considered trading securities and consist of state and
         municipal obligations. In accordance with U.S. GAAP,the Company categorizes its financial instruments recorded at
         fair value into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in
         active markets for identical assets or liabilities (Level 1)and the lowest priority to unobservable inputs (Level 3). If the
         inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based
         on the lowest level input that is significant to the fair value measurement of the instrument.

         Financial assets and liabilities recorded on the Statement of Financial Condition are categorized based on the inputs
         to the valuation techniques as follows:

         Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has
         the ability to access.

         Level 2 - Financial assets and liabilities whose value are based on quoted prices in markets that are not active or
         model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

         Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs
         that are both unobservable and significant to the overall fair value measurement. These inputs reflect managements
         judgment about the assumptions a market participant would use in pricing the asset or liability.

         State and municipal obligations consist of debt securities that are valued based on quotations received from dealers
         who make markets in such securities or by independent pricing services. These pricing services generally utilize
         matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as
         dealer supplied prices.

         The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a
         recurring basis as of December 31, 2016.



                                                                                             Securities Owned
                                                                                     Level         Level      Level

                          State and municipal obligations                            $80,338       $361,744



                                    Total                                            $80,338        317           $


         The Company did not hold any financial liabilities at fair value at December 31, 2016.


                                         WELLS NELSON & ASSOCIATES, LLC
                                            Notes to Financial Statements
                                                December 31, 2016



Note 5 - Furniture, Equipment and Leasehold Improvements

         A summary of furniture, equipment and leasehold improvements at December 31, 2016 is as follows:

             Furniture and fixtures                                                            $ 296,931
             Equipment                                                                           208,106
             Leasehold improvements                                                              125,353
                                                                                               $ 630,390

             Less: accumulated depreciation and amortization                                     545,052
                                                                                               $ 85,338

Note 6 - Leases

         The Company's facilities and certain equipment are leased under various operating leases with initial noncancelable
         terms in excess of one year. Rental expense related to facilities and equipment amounted to $215.225 during 2016.

         The following are the minimum lease payments that will have to be made in each of the years indicated based on
         operating leases in effect as of December 31, 2016:

                     Year Ending
                     December 31,
                         2017                                                                  $ 217,779
                         2018                                                                    150,447
                         2019                                                                     66,500

                          Total minimum lease payments                                            434 6 6



Note 7 - Net Capital Requirements and Exemptive Provisions

         The Company is subject to the SEC Uniform Net Capital Rule(SEC Rule 15c3-1), which requires the maintenance of
         minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not
         exceed 15 to 1. At December 31, 2016, the Company had net capital of $1,977,271, which was $1,877,271 in excess
         of its required net capital of $100,000. The Company's ratio of aggregate indebtedness to net capital ratio was 0.13 to
         1.

         The Company is exempt from the Securities and Exchange Commission Customer Protection Rules(SEC Rule 15c3-
         3), which relate to reserves and custody of securities, under section (k)(2)(ii) of this rule.


                                          WELLS NELSON & ASSOCIATES, LLC
                                             Notes to Financial Statements
                                                 December 31, 2016


Note 8 - Defined Contribution Plan

         The Company adopted a 401(k) profit sharing plan covering all eligible employees, effective January 1, 2003.
         Participants may make deferral contributions up to the annual maximum amount allowed by the Internal Revenue
         Code. The Company may also make discretionary contributions and safe harbor matching contributions. The
         Company incurred administrative fees and made matching contributions of $1,522 and $65,587, respectively.

Note 9 - Commitments and Contingent Liabilities

         The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-
         dealers, banks and other financial institutions. In the event counterparties do not fulfill their obligations, the Company
         may be exposed to risk. The risk of default depends on the credit worthiness of the counterparty or issuer of the
         instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty.

         The Company is required to indemnify its clearing broker/dealer if a customer fails to settle a securities transaction,
         according to its clearing agreement. Management was neither aware, nor had it been notified of any potentially
         material indemnification loss at December 31, 2016.

         The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. The
         Company has not experienced any losses in such accounts and does not believe it is exposed to any significant




                                                                                                                             risk.


Supplemental Information Pursuant to Rule 17a-5
  ofthe Securities Exchange Act of 1934, as of
              December 31,2016


                                                      Schedule I

                                        WELLS NELSON & ASSOCIATES, LLC
               Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission
                                              As of December 31, 2016



Computation of Net Capital

Total members'equity qualified for net capital                                                    $     2,103,518

Deductions and/or charges
  Non-allowable assets:
    Furniture, equipment and leasehold improvements                          $        85,338
    Other assets                                                                      16,473            (101,811)

Net capital before haircuts on securities positions                                                     2,001,707

Haircuts on securities (computed, where applicable,
  pursuant to Rule 15c3-1(f)):
      Debt securities                                                                                    (24,436)

Net capital                                                                                       $     1,977,271



Aggregate Indebtedness

Items included in statement of financial condition
  Accounts payable                                                                                $       17,262
  Accrued expenses                                                                                       230,594
  Payable to clearing broker-dealer                                                                       10,864

Total aggregate indebtedness                                                                      $      258,720


                                                 Schedule I (continued)

                                        WELLS NELSON & ASSOCIATES, LLC
               Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission
                                              As of December 31, 2016



Computation of Basic Net Capital Requirement



Minimum net capital required (6 2/3% of total                                                                 17,248




                                                                                                     $
    aggregate indebtedness)

Minimum dollar net capital requirement of                                                                    100,000




                                                                                                     $
    reporting broker or dealer

Minimum net capital requirement(greater of two                                                               100,000




                                                                                                     $
    minimum requirement amounts)

Net capital in excess of minimum required                                                                  1,877,271




                                                                                                     $
Net capital less greater of 10% of aggregate indebtedness or 120% of minimum net capital                   1,857,271

                                                                                                     $
Ratio: Aggregate indebtedness to net capital                                                              0.13 to 1




Reconciliation with Company's Computation

There were no material differences in this computation of net capital and the corresponding computation
prepared by the Company and included in the unaudited Form X-17A-5 Part II FOCUS Report filing as of
the same date


                                                                                            WWW.MOSSADAMS.COM




         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board Members
Wells, Nelson,& Associates, LLC

We have reviewed management's statements, included in the accompanying Wells, Nelson, &
Associates, LLC's Exemption Report, in which (1) Wells, Nelson, & Associates, LLC (the Company)
identified provision 17 C.F.R. §156-3(k)(2)(ii) (the "exemption provisions") under which the
Company claimed an exemption from 17 C.F.R. §240.15c3-3 and (2) the Company stated that the
Company met the identified exemption provisions throughout the most recent fiscal year without
exception. The Company's management is responsible for compliance with the exemption provisions
and its statements.

Our review was conducted in accordance with the standards of the Public Company Accounting
Oversight Board (United States) and,accordingly, included inquiries and other required procedures to
obtain evidence about the Company's compliance with the exemption provisions. A review is
substantially less in scope than an examination, the objective of which is the expression of an opinion
on management's statements. Accordingly, we do not express such an opinion,

Based on our review, we are not aware of any material modifications that should be made to
management's statements referred to above for them to be fairly stated, in all material respects, based
on the conditions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of
1934.




Dallas, Texas
February 23, 2017




                                                                                                     Praxity~: A+f~3fRFR
                                                                                                     GLOBAL ALLIANCE OF
                                                                                                     INDEPENDENT FIRMS


                                I N V E S -1' Al E N                  1       8 A 1 K I N G




                                            EXEMPTION REPORT
                                              DECEMBER 31, 2Q 16

  Comes now the firm and makes the following statements that we believe are true and accurate to
  the best ofour knowledge and belief-
                                elief


         1. The firm is exempt from Rule 156-3 under Section (k)(2)(ii), in which all transactions
            are cleared through another broker-dealer on a fully disclosed basis.

         2. The finn met the identified exemption provision throughout the most recent fiscal year
            without exception.




                                                                          Fek--~'
                                                                          Edward F. Wells
                                                                          President




211   NoRT11 RonINSON. Two LEADERSHIP SQUARE, SUITE     1600, OKLAHOMA CITY, OKLAIIOINA     73102 TEL(405)239-9000 FAX (405)228-1062
                                         DALLAS • LITTLE ROCK • OKLAHOMA CITY • TULSA
           11'ellsNelson & Associates, G.L.C. is a registered Investment Advisor, a registered R►aker/Dcaler and member FINRk'SIPC


INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING
          AGREED-UPON PROCEDURES
             DECEMBER 31,2016


                                                                                              WWW.M0SS ADAMS.COM




        REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
                     APPLYING AGREED-UPON PROCEDURES

To the Board Members
Wells, Nelson,& Associates, LLC

In accordance with Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and with the SIPC Series
600 Rules, we have performed the procedures enumerated below, which were agreed to by
Wells, Nelson, & Associates, LLC (the Company) and the Securities Investor Protection Corporation
(SIPC) with respect to the accompanying General Assessment Reconciliation (Form SIPC-7) of the
Company for the period from January 1, 2016 to December 31, 2016,solely to assist you and the SIPC in
evaluating the Company's compliance with the applicable instructions of the General Assessment
Reconciliation (Form SIPC-7). Management is responsible for the Company's compliance with those
requirements. This agreed-upon procedures engagement was conducted in accordance with attestation
standards established by the Public Company Accounting Oversight Board (United States). The
sufficiency of these procedures is solely the responsibility of those parties specified in this report.
Consequently, we make no representation regarding the sufficiency of the procedures described below
either for the purpose for which this report has been requested or for any other purpose. The
procedures we performed and our findings are as follows:

1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement
   records entries noting no differences;

2. Compared the total revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III
   for the period from January 1, 2016 to December 31, 2016 with the amounts reported in Form
   SIPC-7 for the period from January 1, 2016 to December 31,2016, noting no differences;

3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers
   noting no differences;

4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related
   schedules and working papers supporting the adjustments noting no differences; and,




                                                    1                                                  Praxity,':
                                                                                                               MENBER.
                                                                                                       fNDBPFNOEN7FIRMS


                                                                                             WWW.MOSSADAMS.COM




MOSS ADAMS                 LLP




    S. We were unable to compare the amount of any overpayment applied to the current assessment
       with the Form SIPC-7 on which it was originally computed as there was no such overpayment
       amount stated on Form SIPC-7 and management represented to us that no such overpayment
       exists.

We were not engaged to, and did not conduct an examination, the objective of which would be the
expression of an opinion on compliance with the applicable instructions of the Form SIPC-7. Accordingly,
we do not express such an opinion. Had we performed additional procedures, other matters might have
come to our attention that would have been reported to you.

This report is intended solely for the information and use of the specified parties listed above and is not
intended to be and should not be used by anyone other than these specified parties.




Dallas, Texas
February 23, 2017




                                                     2


                              SECURITIES INVESTOR PROTECTION CORPORATION
  SIPC-7                                  P.O. Box 92185 Washington, D.C, 20090-2185
                                                         202-371-8300                                                                          SIPC-7
(33-REV 7/10)                                  General Assessment Reconciliation                                                           (33-REV 7/1 0)
                                                     For the fiscal year ended 12/31/2016
                              (Read carefully the instructions in your Working Copy before completing this Form)

                            TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS
1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for
purposes of the audit requirement of SEC Rule 17a-5:
         ~Note:                                                If any of the information shown on the
         F 19„19,,. ,,f                                  mailing label requires correction, please e-mail
                                       MIXEpAAgC220      any corrections to form@sipc.org and so
           52490 FINRA DEC                               indicate on the form filed.
           WELLS NELSON 8 ASSOCIATES LLC
           TWO LEADERSHIP SQ 211 N ROBINSON S`Ta i61OO-S Name and telephone number of person to
           OKLAHOMA CITY OK 73102                        contact respecting this form.
                                                            Rark3all Nelson
         L~




2. A. General Assessment (item 2e from page 2)                                                                         $ 10,871

   B. Less payment made with SIPC-6 filed (exclude interest)                                                       (       5,172
       07/26/2016
               Date Paid
   C. Less prior overpayment applied                                                                                   (          0                         )

   D. Assessment balance due or (overpayment)                                                                              5,699

   E. Interest computed on late payment (see instruction E) for------days at 20% per annum                                        0
                                                                                                                       $   5,699
   F. Total assessment balance and interest due (or overpayment carried forward)

   G. PAYMENT: ~ the box
      Check mailed.to P.O. Box :1 Funds Wired                             5,699
      Total (must be same as F above)                                 8

   H. Overpayment carried forward

3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number):




The SIPC member submitting this form and the
person by whom it is executed represent thereby                       Wells Nelson & Associates, LLC
that all information contained herein is true, correct                    /J        (Name of Corporation, Partnership OF other organization)
and complete.                                                                                            `
                                                                                                    (Authorized signature)
                            January            2017                   Eduard F. Wells, President
Dated the 27 day of
                                                                                                             (Title)

This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place.



 W Dates:
               Postmarked           Received              Reviewed
 W
 _— Calculations                                          Documentation                                                       Forward Copy
 w
c.D Exceptions:
a
cn Disposition of exceptions:
                                                                      1


                                 DETERMINATION OF "SIPC NET OPERATING REVENUES"
                                            AND GENERAL ASSESSMENT
                                                                                                                     Amounts for the fiscal period
                                                                                                                     beginning 1/1/2016
                                                                                                                     and ending 12/31/2016

                                                                                                                             Eliminate cents
Item No.
                                                                                                                          4,690,478
2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030)

2b. Additions:
        (1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
            predecessors not included above.

       (2) Net loss from principal transactions in securities in trading accounts.

       (3) Net loss from principal transactions in commodities in trading accounts.

       (4) Interest and dividend expense deducted in determining item 2a.

       (5) Net loss from management of or participation in the underwriting or distribution of securities.

       (6) Expenses other than advertising; printing, registration fees and legal fees deducted in determining net
           profit from management of or participation in underwriting or distribution of securities.

       (7) Net loss from securities in investment accounts.

                 Total additions

2c. Deductions:
       (1) Revenues from the distribution of shares of a registered open end investment company or unit
           investment trust, from the sale of variable annuities, from the business of insurance; from investment
           advisory services rendered to registered investment companies or insurance company separate                      183,781
           accounts, and from transactions in security futures products.

       (2) Revenues from commodity transactions.

       (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
           securities transactions.
                                                                                                                            147,298

       (4) Reimbursements for postage in connection with proxy solicitation.

       (5) Net gain from securities in Investment accounts.

       (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
           (ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
           from issuance date.

       (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
           related to the securities business (revenue defined by Section 16(9)(L) of the Act).

       (8) Other revenue not re!ated either directly or indirectly to the securities business.
          (See Instruction Cl:


             (Deductions in excess of $100,000 require documentation)



       (9) (i) Total interest and dividend expense (FOCUS Line 221PART IIA Line 13;
                Code 4075 plus line 2b(4) above) but not in excess           10,929
                of total interest and dividend income.                   $

           (ii) 40% of margin interest earned on customers securities
                accounts (40% of FOCUS line 5, Code 3960).
                                                                                                                               10,929
               Enter the greater of line (i) or (ii)

               Total deductions                                                                                              342,008

2d. SIPC Net Operating Revenues                                                                                       $ 4,348,470

2e. General Assessment @ .0025                                                                                        $        10,871
                                                                                                                       (to page 1. line 2.A.)
                                                                             2



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