Northwestern Mutual is a financial services company that provides fiduciary and fee-based financial planning, investment management and advisory services through its subsidiary Northwestern Mutual Wealth Management, a federal savings bank. It offers investment products and retirement plans through another subsidiary, Northwestern Mutual Investment Services, which is a registered investment advisor and broker-dealer.
The Milwaukee-based company currently has $125.1 billion in assets under management and more than 6,400 financial advisors and professionals across the nation. Northwestern Mutual has more than 4.5 million clients. It serves individuals and high-net-worth individuals, pension and profit-sharing plans, trusts, estates, charitable organizations and corporations. The firm is licensed in all 50 states, plus Washington, D.C.
Northwestern Mutual Background
Northwestern Mutual as a whole was founded as a life insurance company in 1857 in the state of Wisconsin, which at the time had been in existence for just nine years. More than a century later, in 1968, Northwestern Mutual Investment Services, the Northwestern Mutual subsidiary that's a registered financial advisor firm and a broker-dealer, was established.
In its current form, Northwestern Mutual offers insurance, investment products and financial planning and investment management services.
What Types of Clients Does Northwestern Mutual Accept?
Northwestern Mutual works with investors across the country. Its clients include individuals and high-net-worth individuals, pension and profit-sharing plans, trusts, estates, charitable organizations and corporations. It can help people save for retirement, buy a home, plan for a growing family, protect their family, save for college and protect their income.
Northwestern Mutual Minimum Account Sizes
The minimum investment required to open an investment advisory account is $25,000.
Services Offered by Northwestern Mutual
Northwestern Mutual as a whole offers investing, financial planning and insurance services and products:
- Planning services
- Financial planning
- Retirement planning
- College savings planning
- Private client services
- Estate planning
- Long-term care planning
- Business services
- Life insurance (whole life insurance, universal life insurance, term life insurance)
- Disability insurance
- Long-term care
Certain subsidiaries of Northwestern Mutual provide certain services.
Northwestern Mutual for High-Net-Worth Individuals
Northwestern Mutual’s private client services are directed at clients who have at least $1 million to invest. The program is designed to address the more diverse and challenging needs that can arise from having substantial wealth. In this program, clients work with a team of financial advisors who specialize in handling these unique needs, whether that means distributing your wealth, making your portfolio as tax efficient as possible or merging investment accounts.
Northwestern Mutual Investment Philosophy
Northwestern Mutual develops a long-term investment strategy for its clients based on their risk tolerance, time horizon and goals. The firm believes that identifying an investor’s level of risk tolerance is key to determining a suitable portfolio. Its portfolio models range from conservative to moderate to aggressive, with more conservative portfolios having a much higher ratio of bonds to stocks and aggressive portfolios having a much higher ratio of stocks to bonds. In addition to stocks and bonds, Northwestern Mutual can manage IRAs, mutual funds, 401(k) plans, ETFs, 529 college savings plans, annuities and certificates of deposit (CDs).
Northwestern Mutual manages risk in clients' portfolios by diversifying through asset allocation. To maximize your portfolio's success, it recommends diversifying across industries, asset classes and companies. It believes that it’s also crucial to take inflation and taxes into account when making investment decisions. To overcome these impacts, the firm recommends a larger allocation to stocks or tax-deferred investment vehicles.
Once a client's portfolio is created, Northwestern will periodically rebalance it and review the client's goals and asset allocation strategies. Northwestern Mutual discourages attempting to time the market, instead espousing starting early and staying the course with a chosen investing strategy.
Fees Under Northwestern Mutual
Northwestern Mutual negotiates advisory fees on a case-by-case basis. Fees vary depending on the services that the company provides to clients. According to its Form ADV (SEC-filed paperwork), Northwestern Mutual Investment Services may earn fixed fees and referral fees.
Northwestern Mutual Awards and Recognition
Northwestern Mutual, which currently ranks No. 97 on the Fortune 500 list, has been recognized numerous times in recent years. In 2017, Fortune ranked Northwestern Mutual No. 1 for "Quality of Products and Services" and "Financial Soundness." Also in 2017, Financial Planning magazine and Financial Advisor magazine both recognized Northwestern Mutual Investment Services as a top 10 biggest independent broker-dealer. In 2016, Northwestern Mutual was awarded an Eye on Innovation prize by Gartner, Inc. for "Most Innovative Digital Business Model in Financial Services."
The company has also been lauded for its workplace environment, including being named one of the best companies for diversity by Black Enterprise and one of the best places to work for LGBT equality by the Human Rights Campaign.
What to Watch out For
Northwestern Mutual has a complex structure that prospective clients should be aware of, as the company has a number of interconnected subsidiaries that work together and may have referral agreements. All Northwestern Mutual financial advisors and wealth management advisors are registered representatives of Northwestern Mutual Investment Services, a broker-dealer and registered investment advisory, and they can also provide advisory services as Northwestern Mutual Wealth Management representatives. They also may be licensed life insurance agents.
Northwestern Mutual Investment Services has a brokerage services agreement with Northwestern Mutual Wealth Management, and it offers support for its investment advisory services. Though Northwestern Mutual Investment Services refers investors to advisors, it does not offer advice on certain investments, instead screening and selecting sponsors who then use their own investment strategy. However, some Investment Services advisory representatives may also be Wealth Management financial advisors.
Northwestern Mutual does have disclosures -- see more below.
According to FINRA, Northwestern Mutual Investment Services (NMIS) has a total of seven disclosures, all of which were regulatory events. The division's most recent disclosure was in 2009, when FINRA fined NMIS $200,000 for failing to properly supervise procedures surrounding its sales and marketing of auction rate securities.
Opening an Account With Northwestern Mutual
Northwestern Mutual guides prospective clients through a questionnaire in order to match them with an advisor. The question asks the person's age, zip code, biggest financial goal, annual household income, first and last name, phone number and email address. You can also search for a specific advisor on the site, or search for advisors by zip code.
Where Is Northwestern Mutual Located?
Northwestern Mutual is headquartered in Milwaukee, where it’s located in the East Town area on East Wisconsin Avenue between North Jackson Street and North Van Buren Street. The company has more than 330 offices across the nation though, and it’s licensed to work with investors in all 50 states, plus the District of Columbia.
Tips for Finding a Financial Advisor
- Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
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