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Revenue Recognition | 12 Months Ended
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Dec. 31, 2019
Revenue Recognition [Abstract] |
Revenue Recognition | 12. Revenue Recognition The primary sources of revenue for the Company are as follows: Margin Interest, Marketing and Distribution fees Margin interest, marketing and distribution fees consists of two components: margin interest and 12b1 fees. Margin interest is the net interest charged to customers for holding financed margin positions, and 12b1 fees are fees paid to the Company related to trailing payments from mutual funds as a result of prior sales of mutual funds to customers. Margin interest, marketing and distribution fees are recorded as earned. Commissions and Fees The Company earns commission revenue for executing trades for clients in individual equities, options, insurance products, futures, fixed income securities, as well as certain third-party mutual funds and ETFs. Commission revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, is recognized at a point in time on the trade date when the performance obligation is satisfied. The performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. Principal Transactions Principal transactions primarily represent riskless transactions in which the Company, after executing a solicited order, buys or sells securities as principal and at the same time buys or sells the securities with a markup or markdown to satisfy the order. Principal transactions are recognized at a point in time on the trade date when the performance obligation is satisfied. The performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. Advisory Fees The Company earns advisory fees associated with managing client assets. The performance obligation related to its revenue stream is satisfied over time; however, the advisory fees are variable as they are charged as a percentage of the client’s total asset value, which is determined at the end of the quarter. Interest and Other Income The Company earns interest from generated in clients’ accounts and on the Company’s bank balances and is recorded as earned. The Company earns miscellaneous income from various sources which is also recorded as earned. The following table presents the major revenue categories and when each category is recognized:
|  | Year Ended December 31, |  |  |
Revenue Category |  | 2019 |  |  | 2018 |  |  | Timing of Recognition
Trading Execution and Clearing Services |  |  |  |  |  |  |  |
Commissions and fees |  | $ | 8,302,000 |  |  | $ | 9,504,000 |  |  | Recorded on trade date
Principal transactions |  |  | 8,061,000 |  |  |  | 9,020,000 |  |  | Recorded on trade date
Advisory fees |  |  | 801,000 |  |  |  | 478,000 |  |  | Recorded as earned
Total Trading Execution and Clearing Services |  |  | 17,164,000 |  |  |  | 19,002,000 |  |  |
Other Income |  |  |  |  |  |  |  |  |  |
Margin interest, marketing and distribution fees |  |  |  |  |  |  |  |  |  |
Margin interest |  |  | 8,134,000 |  |  |  | 7,663,000 |  |  | Recorded as earned
12b1 fees |  |  | 2,987,000 |  |  |  | 3,265,000 |  |  | Recorded as earned
Total Margin interest, marketing and distribution fees |  |  | 11,121,000 |  |  |  | 10,928,000 |  |  |
Interest and other income |  |  | 308,000 |  |  |  | 106,000 |  |  | Recorded as earned
Total Other Income |  |  | 11,429,000 |  |  |  | 11,034,000 |  |  |
Total Revenue |  | $ | 28,593,000 |  |  | $ | 30,036,000 |  |  |
The following table presents each revenue category and its related performance obligation:
Revenue Stream | Performance Obligation
Commissions and fees, Principal transactions, Advisory fees | Provide security trading services to customer and act as agent
Margin interest, marketing and distribution fees, Interest and other income | n/a
Disaggregation of Revenue The following table presents a breakdown of the Company’s revenue between the amounts attributed to the retail customer accounts that were originally part of Siebert (“Legacy Siebert”) vs. the retail customer accounts the Company acquired from StockCross as part of the transaction that closed in December 2017 (“StockCross Retail Assets”):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Revenue from Margin interest, marketing and distribution fees |  |  |  |  |  |
Margin interest, marketing and distribution fees – Legacy Siebert |  | $ | 9,723,000 |  |  | $ | 9,674,000 |
Margin interest, marketing and distribution fees – StockCross Retail Assets |  |  | 1,398,000 |  |  |  | 1,254,000 |
Total Revenue from Margin interest, marketing and distribution fees |  | $ | 11,121,000 |  |  | $ | 10,928,000 |
Revenue from Principal transactions |  |  |  |  |  |  |  |
Principal transactions – Legacy Siebert |  | $ | 2,154,000 |  |  | $ | 1,894,000 |
Principal transactions – StockCross Retail Assets |  |  | 5,907,000 |  |  |  | 7,126,000 |
Total Revenue from Principal transactions |  | $ | 8,061,000 |  |  | $ | 9,020,000 |
Revenue from Commissions and fees |  |  |  |  |  |  |  |
Commissions and fees – Legacy Siebert |  | $ | 7,037,000 |  |  | $ | 7,792,000 |
Commissions and fees – StockCross Retail Assets |  |  | 1,265,000 |  |  |  | 1,712,000 |
Total Revenue from Commissions and fees |  | $ | 8,302,000 |  |  | $ | 9,504,000 |
Additional Revenue: |  |  |  |  |  |  |  |
Advisory fees – Legacy Siebert |  |  | 801,000 |  |  |  | 478,000 |
Interest – Legacy Siebert |  |  | 308,000 |  |  |  | 106,000 |
Total Revenue |  | $ | 28,593,000 |  |  | $ | 30,036,000 |
Soft Dollar Arrangement As a result of the acquisition of Weeden Prime, the Company has soft dollar and commission sharing arrangements with customers that fall both within, and outside of, the safe harbor provisions of Rule 28(e) of the Securities Exchange Act of 1934 ("Rule 28(e)"), as amended. These soft dollar arrangements were determined to be a separate performance obligation that should be allocated a portion of the transaction price. Under these arrangements, the Company charges additional dollars on customer trades and uses these fees to pay third parties for research, brokerage services, market data, and related expenses (“research services”) on behalf of clients. The Company is an agent in this arrangement, as it does not control the research services before they are transferred to the customer. As such, the revenue from these agreements are recognized net of cost in the statement of income on the line item titled “Commissions and fees.” For every other revenue transaction, the Company is the principal and there are no agents involved in providing the services; therefore, the revenue is recognized gross. The Company paid client expenses approximately $48,000 for December 2019 and had an outstanding receivable and payable of approximately $31,000 and $158,000, respectively, as of December 31, 2019. The receivable and payable are within the line items titled “Other receivables” and “Accounts payable and accrued liabilities,” respectively, on the statement of financial condition. As of December 31, 2019, no allowance for uncollectible commissions was necessary as management believes all commissions receivable and prepaid research services expenses will be realized.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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