Northern Trust Investments, Inc. (NTI) is a fee-only financial advisor firm that’s based at its flagship location in Chicago, Illinois. The firm has offices around the world -- and it even operates its own proprietary mutual funds and exchange-traded funds (ETFs).
The firm is fee-based, meaning advisors earns compensation from both client-paid fees and third-party commissions.
Northern Trust Investments Background
Northern Trust Investments is the U.S.-based arm of Northern Trust Asset Management. However, Northern Trust Asset Management is merely a branch of the entire Northern Trust Corporation, a publicly traded financial company. Northern Trust Corporation has been in business since 1889, while NTI was opened in 1988.
Northern Trust Investments Client Types and Minimum Account Sizes
More than 40,000 clients are currently enrolled in Northern Trust Investments’ services, and a large percentage of them are high-net-worth and non-high-net-worth individuals. The firm works with a multitude of other clients, though, such as businesses, pension plans, employee benefit plans, trusts, foundations, endowments, public and corporate retirement funds, insurance companies, registered and unregistered investment pools, sovereign wealth funds, government entities, banks and collective funds.
Northern Trust Investment institutes a variable minimum account size requirement. Factors that decide both if you’ll have a minimum and what it’ll be if you do include the type of client you are and what investment strategy/asset classes you choose.
Services Offered by Northern Trust Investments
Here is an overview of the services available through Northern Trust:
- Separately managed accounts (SMAs)
- Individualized discretionary investment management based on:
- Life goals
- Risk tolerance
- Liquidity needs
- Tax situation
- Wealth management
- Asset allocation planning
- Brokerage services
- Financial planning
- Retirement planning
- Retirement savings rollovers
- Cash flow maximization
- Tax minimization
- Risk management
- Philanthropic gift planning
- Business ownership planning
- Trust planning
- Estate planning
- Family wealth management
- Multigenerational planning
- Wealth protection
- Generational wealth transitions
- Educational services
- Individualized discretionary investment management based on:
- Investment management for investment pools, like:
- Mutual funds
- ETFs
- Bank common and collective funds
- Other U.S. and non-U.S. investment funds
- Multi-manager strategies
- Selection and termination of affiliated and non-affiliated investment advisors
- Wrap programs
- Proprietary and non-affiliated model investment portfolios
- Investment research and advisory services
- Overlay services
- Currency hedging
- Beta management
- Cash equitization
- Index services
- Transition management
- Restructure or reallocation of assets
It's important to note that Northern Trust Investments doesn't provide financial planning services.
Northern Trust Investments Investment Philosophy
Northern Trust Investments uses a plethora of different investment strategies to fulfill clients’ needs. For example, there are equity, fixed income, multi-manager, model portfolio, transition management and overlay services. These are chosen based on your risk tolerance, tax considerations, liquidity needs and more.
Common investments used by NTI are stocks, bonds, registered and unregistered investment companies, money market instruments, ETFs, non-U.S. issuer securities, futures, warrants, forwards, inflation-linked securities, short sales, over-the-counter (OTC) securities, real estate investment trusts (REITs), Rule 144A securities, government obligations, derivatives, debt securities, options contracts, asset-backed securities and commercial paper.
Fees Under Northern Trust Investments
The majority of Northern Trust Investments’ fee schedule is listed in the tables below. These rates are charged to your account on either a monthly or quarterly basis in arrears. All fees will be relayed to you in writing via the investment advisory agreement. You can have your fees deducted from your account’s balance automatically, but you must authorize NTI to do this. If not, you will receive a bill in the mail listing your charges.
| Separately Managed Account (SMA) Fees | |
| Portfolio Strategy | Annual Fee Range |
| Fundamental Active Equity | 0.25% - 1.00% |
| Quantitative Equity | 0.20% - 0.65% |
| Passive Equity | 0.02% - 0.30% |
| Fixed-Income | 0.02% - 0.30% |
| Multi-Asset Class | Up to 0.50% |
| Investment Pool Fees | |
| Portfolio Strategy | Annual Fee Range |
| Fundamental Active Equity | 0.40% - 1.10% |
| Quantitative Equity | 0.17% - 1.10% |
| Passive Equity | 0.005% - 0.70% |
| Fixed-Income | 0.015% - 0.80% |
| Multi-Asset Class | Up to 0.60% |
| Fees for Other Services | |
| Service/Program | Annual Fee Range |
| Model Portfolios | Up to 0.50% |
| Investment Research & Advisory Services | Negotiable |
| Multi-Manager Strategies | Negotiable |
| Outsourced chief investment officer (OCIO) | Negotiable |
| Transition Management | Negotiable |
| Index Services | Negotiable |
| Overlay Services | Negotiable |
Northern Trust Investments also charges performance-based fees to some of its clients. For the most part, these charges will be based on a percentage of your portfolio’s capital gains or capital appreciation.
What to Watch Out For
Northern Trust Investments has four disclosures present on its SEC-filed Form ADV. One of these applies to the firm directly, whereas the other three are attributed to advisory affiliates.
Clients of Northern Trust Investments may have performance-based fees included in their fee schedule. This raises a potential conflict of interest, as NTI’s advisors may be inclined to utilize riskier investment philosophies to induce higher returns, and, in turn, more compensation. The firm's advisors may also earn commissions on certain transactions, which is also a conflict of interest.
Despite these arrangements, Northern Trust and its team of advisors are fiduciaries, meaning they are legally bound to act in your best financial interest at all times.
Opening an Account With Northern Trust Investments
To get in touch with Northern Trust, visit the contact page on its website. This online resource offers a tool that will help you locate one of its branches in the U.S. or elsewhere. You can also call the firm’s general inquiries line at (312) 630-6000 to find out more information.
All information is accurate as of the writing of this article.
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