Northwestern Mutual Wealth Management Review 2022 - MagnifyMoney
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Northwestern Mutual Wealth Management Review 2022

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Northwestern Mutual Wealth Management is a subsidiary of Northwestern Mutual, a Fortune 500 life insurer and financial services company. While Northwestern Mutual has its headquarters in Milwaukee, it is a national organization with branches across the country. Under the Northwestern Mutual Wealth Management division, the company provides financial advice, investment recommendations and trust services. The firm creates customized investment plans for each client.

The bottom line: Northwestern Mutual Wealth Management, a subsidiary of a large firm, offers investment solutions, private wealth management and financial planning and insurance services.

  • Creates customized investment plans for all clients
  • Offers referral services to outside investment advisors
  • Negotiates fees on a case-by-case basis

All information included in this profile is accurate as of February 28, 2022. For more information, please consult Northwestern Mutual’s website.

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Overview of Northwestern Mutual Wealth Management

Northwestern Mutual opened the Northwestern Mutual Wealth Management subsidiary in 1968 to oversee its broker-dealer and investment advisor services. Northwestern Mutual itself launched in 1859 out of Wisconsin. It is a mutual life insurance company, which means the company is owned by the insurance policyholders.

Northwestern Mutual Wealth Management states on its website that it has over 6,400 financial advisors and professionals across the nation. Financial advisors at the company receive the support of Northwestern’s Wealth Management Investment Team, which includes chartered financial analyst (CFA) charterholders.

Northwestern Mutual Wealth Management’s pros

  • Awards for its size and reputation: Fortune named Northwestern Mutual one of the World’s Most Admired Companies in 2022, marking the seventh consecutive year it had won this honor. Also in 2022, eight advisors at Northwestern Mutual were recognized on Forbes’ on 2022 Top Women Wealth Advisors Best-in-State List.
  • Customized investment recommendations: Northwestern Mutual Wealth Management does not offer a one-size-fits-all portfolio for all its customers. Instead, your advisor will customize their investment recommendation based on your personal financial needs and situation.
  • No performance or trading fees: Northwestern Mutual Wealth Management advisors charge an advisory fee based on your needs and investments. The firm doesn’t make commissions on trades or for your portfolio’s performance, which can drive up costs.
  • Broad service offerings besides investment management: As a large Fortune 500 company with multiple divisions, Northwestern Mutual, the parent company, offers a wide range of financial services besides investment advice, including insurance and business services. Additionally, you can find a Northwestern Mutual branch and advisor nearly anywhere in the country.

Northwestern Mutual Wealth Management’s cons

  • Not a pure investment specialist: Northwestern Mutual Wealth Management is not focused on trying to beat the market to earn above-average returns. It does not actively trade in client portfolios, as many other investment advisory firms do.
  • Potential conflicts of interest due to other services: Northwestern Mutual originally started as a life insurance company, and that’s still one of its main services. Additionally, the firm also acts as a broker-dealer. While the firm’s brochure states it does not believe these other activities interfere with its objectivity in providing advisory services, it still could mean that your advisor has other incentives and focuses beyond just managing your investments. For example, the firm could make money selling insurance.
  • Difficult to predict investment cost without a meeting: Northwestern Mutual Wealth Management does not publicly list its fees and investment minimums. It depends on each custom portfolio. This means you can’t easily compare their costs without contacting the firm first.
  • May require you to navigate multiple divisions and referral partners: Northwestern Mutual Wealth Management is just one of several subsidiaries at Northwestern Mutual. Sorting out all the different groups may get complicated.

What types of clients does Northwestern Mutual Wealth Management serve?

Northwestern Mutual Wealth Management serves:

  • Individuals
  • Pension and profit-sharing plans
  • Trusts and estates
  • Charitable organizations
  • Corporations and other business entities
  • Other investment advisors

Northwestern Mutual Wealth Management does not specify a minimum investment requirement to work with the firm. However, it does offer a high-end advisory service for clients through its Private Client Services program, and it specifies that this service is intended for those investing at least $2 million in assets with the company.

Services offered by Northwestern Mutual Wealth Management

Northwestern Mutual Wealth Management does not run investment funds itself or provide active portfolio management. The firm offers investment advisory services on a non-discretionary basis, meaning advisors do not have trading authority for client funds. Instead, the firm advises clients about potential investments, and then, if the client decides to go through with a portfolio recommendation, Northwestern Mutual Investment Services can process their trades as a broker-dealer to set things up.

If Northwestern Mutual Wealth Management cannot serve a client’s needs, it also provides referrals to other outside firms in exchange for a fee paid for by the other advisor. In addition, the firm offers a fixed-income advisory service specifically for other financial advisors.

Here is a full list of services offered by the investment advisory component of the firm:

  • Investment advisory services
  • Financial planning
    • Retirement planning
    • Trust and estate planning
    • Charitable planning
    • Education planning
    • Business planning
    • Tax planning and management
    • Cash flow forecasting
    • Spending analysis and budgeting
    • Long-term care planning
    • Debt management
    • IRA and 401(k) rollovers
  • Insurance/risk management
  • Employee benefit plan fiduciary services; 401(k) consulting; pension consulting
  • Workshops and seminars; newsletters and publications
  • Collaboration with clients’ lawyers, accountants, etc.
  • Brokerage services

Beyond the services listed above, clients of Northwestern Mutual Wealth Management could also access the broad services of Northwestern Mutual as a whole. The company sells insurance, works as a broker-dealer for investments and provides support for business owners.

How Northwestern Mutual Wealth Management invests your money

When you contact Northwestern Mutual Wealth Management, it will partner you with a local financial advisor. The advisor will go over your portfolio size, risk tolerance, financial goals and time horizon.

With that information, the advisor will select one of the firm’s Signature Advisory Programs, which are curated by its Wealth Management Investment team, that they believe align with your needs. Your advisor will then actively manage your account with your goals in mind.

Advisors at the firm are permitted to determine their own methods of analysis and investment strategies, though there is generally more of a focus on long-term strategies as opposed to those that are short-term. The firm’s advisors do receive support from Northwestern Mutual’s Investment team through ongoing thought leadership, though. This team also regularly provides market commentary to clients.

Fees Northwestern Mutual Wealth Management charges for its services

Northwestern Mutual Wealth Management charges clients for its investment management services based on the value of their assets. Fees are owed on a quarterly basis. The exact amount you’ll owe depends on which investments and services you sign up for, so you’d need to consult with an advisor to find out the costs involved and negotiate your rate. Northwestern Mutual Wealth Management does not offer standard fee charts as some firms do.

According to its Form ADV, Northwestern Mutual Wealth Management can also make money through referral fees, when it sends your account to another advisor through its referral service. Advisors at the firm do not earn performance-based fees or charge commissions for making trades, which the firm believes helps it focus on long-term performance.

Northwestern Mutual Wealth Management disciplinary disclosures

Northwestern Mutual Wealth Management does have a disciplinary track record, with events involving the firm, its affiliates or its employees occurring within the last 10 years. However, this is not necessarily unusual for a company of its size.

In April 2020, for instance, the company entered into a Letter of Acceptance, Waiver and Consent with the Financial Industry Regulatory Authority (FINRA). Without admitting or denying wrongdoing, the firm consented to entry of of the FINRA’s investigative findings that, between 2005 and 2017, it failed to establish, maintain and enforce a supervisory system that was reasonably designed to review and monitor the transmittals of funds from the accounts of customers to third-party accounts and outside entities, in violation of applicable National Association of Securities Dealers (NASD) and FINRA supervisory rules. The firm agreed to sanctions including a censure, a $350,000 fine and certification that the firm had enhanced its supervisory systems and written supervisory procedures.

You can find more information about the firm and its disciplinary history on its Investment Adviser Public Disclosure (IAPD) page.

Northwestern Mutual Wealth Management’s onboarding process

  1. Set up an appointment: If you are interested in learning more about Northwestern Mutual Wealth Management, you can set up an appointment with one of the firm’s financial advisors. Through its website, you can fill out a short questionnaire, providing your contact information as well as details on your top financial goals and your current income. You can also look up specific advisors, or try contacting a local Northwestern Mutual branch to schedule a meeting.
  2. Get paired with a local advisor: The firm will then pair you with a local advisor who is a match for your needs. Northwestern Mutual’s website notes that it will ensure the advisor you’re matched with has the right expertise for your goal, works with other people like you and understands the area in which you live.
  3. Review your information to get an investment plan: During the first appointment, the advisor will get to know your:
    • Financial situation
    • Risk tolerance
    • Investment needs
    • Timeline

    They will use this information to put together a customized investment plan for you, using the Northwestern Mutual resources and assets.

  4. Launch your portfolio: If you’re happy with the plan, you can transfer over your money to launch the portfolio using the firm’s broker-dealer, Northwestern Mutual Investment Services.
  5. Receive regular updates: From there, Northwestern Mutual notes your advisor will regularly update your plan and meet with you to make sure your portfolio continues to stay on track. However, the advisor themselves will not have discretionary trading authority for your portfolio, so you’ll need to approve any changes yourself.

Where Northwestern Mutual Wealth Management is located

Northwestern Mutual Wealth Management has offices in the Wisconsin cities of Milwaukee and Franklin, plus New York City. The firm has jurisdiction to work with investors in all U.S. states, except Virginia and Wyoming.

Is Northwestern Mutual Wealth Management right for you?

If your goal is to create a long-term, uncomplicated investment plan that’s customized to your needs, Northwestern Mutual Wealth Management could be a good fit. The firm could also be worth checking out if you’re looking for services on top of investment management, such as insurance and general financial planning. Plus, the firm doesn’t limit itself to working with high net worth individuals, and has broad geographical reach.

On the other hand, if you’re bringing in a large portfolio and want a more sophisticated trading approach, you may want to consider a more investment-specialized registered investment advisor (RIA). This type of firm may be more focused on generating above-market returns and could have advisors actively trade your portfolio, rather than just giving you general advice as Northwestern Mutual Wealth Management does. Be sure to research multiple firms to ensure you find the right advisor for you.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.