Overview of Northwestern Mutual Investment Services
Northwestern Mutual is well-known for its comprehensive range of financial services, including life and disability insurance. It also offers a brokerage service with a wide variety of investment products and portfolio management within a framework of thorough financial planning. While it has strong points, there are areas where it doesn't quite meet expectations. Here's a detailed review:
Northwestern Mutual Investment Pros
Long-standing and large-scale operation: With over 160 years of history, managing more than $240 billion in assets for nearly 5 million clients.
Diverse insurance offerings: A variety of insurance products available under one roof.
Robust financial planning: Offers comprehensive money management services.
Northwestern Mutual Investment Cons
Limited for self-directed investments: Accounts can only be opened through a local agent.
Limited customer support: Traditional business hours service, not available 24/7.
Expensive: Do not expect zero-commission trading here.
Product Lineup
Northwestern Mutual Investment Services provides these investment options:
- Stocks
- Mutual funds
- Exchange traded funds
- Private credit
- Annuities
- Fixed income securities (including CDs)
- Options
- Private equity
- Hedge funds
- Private real estate
The brokerage offers various account types including individual and joint taxable accounts, Coverdell ESAs, trusts, 529 plans, charitable accounts, estate accounts, ABLE plans, business accounts, and IRAs, with both Roth and Traditional options.
Trading is considered a secondary service to Northwestern Mutual's primary focus on insurance products such as:
- Term life
- Whole life
- Disability insurance
- Long-term care insurance
Investing System
Opening a brokerage account requires visiting a local branch and working with a financial advisor. While this is a more traditional approach, accounts are still considered self-directed. Financial advisors may suggest certain investment actions but do not have complete control over the accounts.
Northwestern Mutual Wealth Management provides comprehensive portfolio management for those preferring to delegate their investment decisions to a professional.
Together, the investment branches offer a variety of services, including:
- Estate and trust planning
- Risk management
- Financial planning
- Investment strategy
- Advanced portfolio management
- Retirement and tax-efficient strategies
- Advisor coordination
- Business planning
- Multigenerational and charitable planning
- Education funding
However, the firm’s traditional approach, requiring in-person meetings to sign up for investment services, contrasts sharply with more modern automated investment options. Notably, Northwestern Mutual does not offer a robo-advisor service.
Cash Management
The brokerage offers an FDIC-sweep program for uninvested cash, providing both insurance and interest, with a competitive APY of 2.34%. The program uses multiple banks to extend FDIC insurance up to $4 million per category, providing substantial coverage.
Retirement accounts can use a service called IRA Resource Checking for those over 59½, with checkwriting as a standard feature and no annual fees.
Customer Service
While local offices manage most customer service, a national hotline is available for general inquiries. However, it only operates during business hours.
The website offers a chatbot for basic questions and hosts a FAQ section that may provide more detailed help.
Northwestern Mutual Investment Fees
The firm charges a variety of fees, but there is no management fee since accounts are self-directed. Here are some examples of the fees:
Account maintenance fee:$50 + 0.0079%
Coverdell ESA annual fee:$25 + 0.0079%
Termination or transfer out fee:$125
No-load mutual fund transaction fee:$75
Stocks and ETFs trading commissions are steep but negotiable, starting from 5% for amounts up to $1,500. Options and bond trades also have high minimum fees.
Wealth management requires at least $25,000 to start, with various other programs having different minimums. The fee structure is negotiated, with caps for certain types of accounts.
Website
The website provides account information and performance data but lacks self-directed trading capabilities. Trades must be made through advisors or a trading desk.
Mobile App
The mobile app mirrors the website's functionality, with added features such as direct calls to assigned financial advisors.
Margin
Margin trading is available under specific income and risk conditions. Interest rates are tiered based on the loan amount.
Education and Security Research
Investment research is provided with mutual fund profiles and market data up to ten years, supported by charts and fundamental data like EPS growth and dividend yield.
General market insights and more focused financial articles are available, offering strategies and advice for various stages of investing.
Recommendations
Beginners: Northwestern Mutual may not be the best option for beginners due to its complex and negotiable pricing. A simpler, more straightforward option like Webull could be more suitable.
Small Accounts: For small investors, Northwestern Mutual might be prohibitively expensive. A no-commission broker like Fidelity could offer a more accessible entry point with fractional shares and no advisory fees on smaller accounts.
ETF & Stock Trading: The lack of self-directed trading tools makes Northwestern Mutual less suitable for active traders. Charles Schwab would be a better choice with its advanced trading software.
Long-Term Investors and Retirement Savers: For those focusing on retirement, Charles Schwab offers a wider range of IRA options and clearer pricing.
Mutual Fund Trading: For mutual fund enthusiasts, Northwestern Mutual's preference for its own funds could be limiting. Firstrade offers a broad selection without transaction fees.
Free Charles Schwab Account
$0 commissions + satisfaction guarantee at Charles Schwab.
Northwestern Mutual Investment Review Verdict
While Northwestern Mutual offers a range of sophisticated investment choices and comprehensive financial services, its traditional approach and high fees may not appeal to everyone. Those seeking modern, efficient investment solutions might find better options elsewhere.
Updated on 7/19/2024.
About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.
