Current Expected Credit Losses (CECL)

9 Months Ended

Sep. 30, 2022

Credit Loss [Abstract]

Current Expected Credit Losses (CECL)

Current Expected Credit Losses (CECL)

The CECL reserve reflects management’s current estimate of potential credit losses related to the receivable balances included in the Company’s unaudited Condensed Consolidated Statements of Financial Condition. See Note 3—“Summary of Significant Accounting Policies” for further discussion of the CECL reserve methodology.

As required, any subsequent changes to the CECL reserve are recognized in “Net income (loss) available to common stockholders” in the Company’s unaudited Condensed Consolidated Statements of Operations. During the three and nine months ended September 30, 2022 and 2021, the Company recorded increases in the CECL reserve as follows (in millions):

	Accrued commissions and other receivables, net		Loans, forgivable loans and other receivables from employees and partners, net		Receivables from broker-dealers, clearing organizations, customers and related broker-dealers		Total
Beginning balance, July 1, 2022	$	4.8	$	3.3	$	6.9	$	15.0
Current-period provision for expected credit losses	(0.2)		(0.1)		0.1		(0.2)
Ending balance, September 30, 2022	$	4.6	$	3.2	$	7.0	$	14.8

	Accrued commissions and other receivables, net		Loans, forgivable loans and other receivables from employees and partners, net		Receivables from broker-dealers, clearing organizations, customers and related broker-dealers		Total
Beginning balance, January 1, 2022	$	0.7	$	1.7	$	—	$	2.4
Current-period provision for expected credit losses	3.9		1.5		7.0		12.4
Ending balance, September 30, 2022	$	4.6	$	3.2	$	7.0	$	14.8

	Accrued commissions and other receivables, net		Loans, forgivable loans and other receivables from employees and partners, net		Receivables from broker-dealers, clearing organizations, customers and related broker-dealers		Total
Beginning balance, July 1, 2021	$	1.0	$	1.7	$	—	$	2.7
Current-period provision for expected credit losses	(0.1)		—		—		(0.1)
Ending balance, September 30, 2021	$	0.9	$	1.7	$	—	$	2.6

	Accrued commissions and other receivables, net		Loans, forgivable loans and other receivables from employees and partners, net		Receivables from broker-dealers, clearing organizations, customers and related broker-dealers		Total
Beginning balance, January 1, 2021	$	1.0	$	1.6	$	—	$	2.6
Current-period provision for expected credit losses	(0.1)		0.1		—		—
Ending balance, September 30, 2021	$	0.9	$	1.7	$	—	$	2.6

For the three months ended September 30, 2022, there was a decrease of $0.2 million in the CECL reserve against “Accrued commissions and other receivables, net” which reflected the downward credit rating migration of certain receivables in the portfolio. For the nine months ended September 30, 2022, there was an increase of $3.9 million in the CECL reserve against "Accrued commissions and other receivables, net" which reflected the downward credit rating migration of certain receivables in the portfolio, which included a $3.8 million reserve related to Russia's Invasion of Ukraine, bringing the CECL reserve recorded pertaining to “Accrued commissions and other receivables, net” to $4.6 million as of September 30, 2022. For the three and nine months ended September 30, 2021, there was a decrease of $0.1 million in the CECL reserve against “Accrued commissions and other receivables, net,” bringing the CECL reserve recorded pertaining to “Accrued commissions and other receivables, net” to $0.9 million as of September 30, 2021.

For the three months ended September 30, 2022, there was a decrease of $0.1 million in the CECL reserve record pertaining to “Loans, forgivable loans and other receivables from employees and partners, net” as a result of employee loan collections. There was no change in the CECL reserve recorded pertaining to “Loans, forgivable loans and other receivables from employees and partners, net” for the three months ended September 30, 2021. For the nine months ended September 30, 2022 and 2021, there was an increase of $1.5 million and $0.1 million, respectively, in the CECL reserve pertaining to "Loans, forgivable loans and other receivables from employees and partners, net" as a result of employee terminations, bringing the CECL reserve recorded pertaining to “Loans, forgivable loans and other receivables from employees and partners, net” to $3.2 million as of September 30, 2022.

For the three months ended September 30, 2022, there was an increase of $0.1 million in the CECL reserve against “Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” which reflected the downward credit rating migration of certain unsettled trades related to Russia's Invasion of Ukraine. For the nine months ended September 30, 2022, there was an increase of $7.0 million in the CECL reserve against “Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” which reflected the downward credit rating migration of certain unsettled trades related to Russia's Invasion of Ukraine, bringing the CECL reserve recorded pertaining to “Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” to $7.0 million as of September 30, 2022. There was no change in the CECL reserve recorded pertaining to “Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” for the three and nine months ended September 30, 2021.