Item 1: Introduction
Northwest Investment Counselors, LLC is an investment adviser registered with the Securities and Exchange Commission. We are not a broker-dealer. Brokerage and investment advisory services, as well as the fees associated with each, differ and it is important you understand the differences. There are free and simple tools available to research firms and financial professionals at investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing. This document will give you a summary of the types of services we offer and the fees we charge.
Item 2: Relationships and Services
Questions to ask us: Given my financial situation, should I choose an investment advisory service? Why or why not? How will you choose investments to recommend to me? What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?
What investment services and advice can you provide me? Our firm primarily offers investment management (we develop an investment allocation using a risk assessment and conversations with you to compose a portfolio of stocks and bonds), financial & retirement planning (we assess your financial situation and provide advice to meet your goals), and trust services (we manage your trusts and serve as point of contact for your family) to our retail clients. As part of our standard services, we monitor your account continuously. Our firm has discretionary management, but you may impose reasonable restrictions on our management. We limit the types of investments we add to your account to those approved by our Chartered Financial Analysts (CFAs). Our firm has a minimum relationship size of $500,000. Please also see our Form ADV Part 2A (“Brochure”), specifically Items 4 & 7.
Item 3: Fees, Costs, Conflicts, and Standard of Conduct
Questions to ask us: Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me? What are your legal obligations to me when acting as my investment adviser? How else does your firm make money and what conflicts of interest do you have? How might your conflicts of interest affect me, and how will you address them?
What fees will I pay? Our advisory fees are asset-based, charged quarterly in advance, and are determined by the level of assets in your portfolio and your investment allocation. The greater the assets in your portfolio, the more you will pay in fees, though your marginal rate may decrease. You pay our fees even if you do not have any transactions and the advisory fee can vary based on the type of investments selected. You will pay a lower rate for an all fixed income portfolio and higher for an all stock portfolio. Please also see Items 4, 5, 6, 7 & 8 of our Brochure. Clients may incur additional fees related to our investment services but not paid to us. Certain investments (e.g., exchange traded funds or mutual funds, etc.) impose additional fees (e.g., management fees and/or have transactional fees) that reduce the value of your investments over time. You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying. You can refer to our investment advisory agreement for your specific fee schedule. Additional details are available in our Brochure.
What are your legal obligations to me when providing recommendations? How else does your firm make money and what conflicts of interest do you have? When we act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are some examples to help you understand what this means.
Conflicts of interest: We earn fees based on the amount of assets in your portfolio, thus we have an incentive to increase the assets you have with us to increase the fees we receive. We have an incentive to recommend our highest fee-paying strategies to clients since conservative or all bond strategies are subject to lower fees. We have numerous safeguards in place to ensure clients receive an investment strategy in their best interest. Our participation in the Schwab Advisor Network (SAN) presents a similar conflict of interest. We pay Schwab a Participation Fee on all referred client accounts. The fee, which is typically 0.25% per annum, creates the incentive to recommend our highest fee-paying strategies for SAN referrals. For further discussion on conflicts of interest please reference our ADV Part 2A.
How do your financial professionals make money? We and our financial professionals are compensated in the form of a salary, bonus, and profit-share from the fees earned by the advisory services we provide to you. Our financial professionals earn quarterly bonuses related to the amount of client assets they service, for their role in new client assets, and for exceeding a primary benchmark. None of our financial professionals receive referral fees or commissions from third parties, nor are they compensated based on the time and complexity of meeting your needs or from commissions on products sold.
Item 4: Disciplinary History
Questions to ask us: As a financial professional, do you have any disciplinary history? For what type of conduct?
Do you or your financial professionals have legal or disciplinary history? No, our firm and financial professionals do not have legal or disciplinary history to disclose. Visit https://www.investor.gov/ for a free, simple search tool to research us and our financial professionals.
Item 5: Additional Information
Questions to ask us: Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?
For additional information on our advisory services, access our Brochure at https://adviserinfo.sec.gov/firm/summary/107953 or please call us at 800-685-7884 if you would like a copy of our Brochure or another copy of this Client Relationship Summary.
Exhibit A – Material Changes to Client Relationship Summary
We have updated the Client Relationship Summary to include additional language under Item 3, Fees, Costs, Conflicts, and Standard of Conduct and more specific language in Item 4, Disciplinary History.