Item 5 - Additional Compensation .......................................................................................................................... 23
Item 6 - Supervision ..................................................................................................................................................... 23
Item 7 - Requirements for State-Registered Advisors ................................................................................... 23
v
Brochure Supplement (Part 2B of Form ADV) .......................................................................... 25
Principal Executive Officer - Nicholas K. Heyer ................................................................................................ 25
Item 2 - Educational Background and Business Experience ....................................................................... 25
Item 3 - Disciplinary Information ........................................................................................................................... 25
Item 5 - Additional Compensation .......................................................................................................................... 25
Item 6 - Supervision ..................................................................................................................................................... 25
Item 7 - Requirements for State-Registered Advisors ................................................................................... 25
Brochure Supplement (Part 2B of Form ADV) .......................................................................... 27
Marc C. Hadley, CFP® .................................................................................................................................................... 27
Item 2 - Educational Background and Business Experience ....................................................................... 27
Item 3 - Disciplinary Information ........................................................................................................................... 28
Item 5 - Additional Compensation .......................................................................................................................... 28
Item 6 - Supervision ..................................................................................................................................................... 28
Item 7 - Requirements for State-Registered Advisors ................................................................................... 28
Brochure Supplement (Part 2B of Form ADV) .......................................................................... 30
Timothy S. Fahey ............................................................................................................................................................ 30
Item 2 - Educational Background and Business Experience ....................................................................... 30
Item 3 - Disciplinary Information ........................................................................................................................... 30
Item 5 - Additional Compensation .......................................................................................................................... 30
Item 6 - Supervision ..................................................................................................................................................... 30
Brochure Supplement (Part 2B of Form ADV) .......................................................................... 32
Nathan Travis .................................................................................................................................................................. 32
Item 2 - Educational Background and Business Experience ....................................................................... 32
Item 3 - Disciplinary Information ........................................................................................................................... 32
Item 5 - Additional Compensation .......................................................................................................................... 32
Item 6 - Supervision ..................................................................................................................................................... 32
Brochure Supplement (Part 2B of Form ADV) .......................................................................... 34
Susan Jalics Becker ........................................................................................................................................................ 34
Item 2 - Educational Background and Business Experience ....................................................................... 34
Item 3 - Disciplinary Information ........................................................................................................................... 34
Item 5 - Additional Compensation .......................................................................................................................... 34
Item 6 - Supervision ..................................................................................................................................................... 34
Firm Description
Nicollet Investment Management, Inc. (“Nicollet”) was established in 1971 in Minneapolis,
Minnesota. Mark C. Hoonsbeen is the Principal of Nicollet.
Nicollet's investment services and fees are charged for the work done in structuring and
managing portfolios of stocks and bonds for clients. The portfolios may be 100% individual
stocks, 100% individual bonds, 100% exchange traded funds or similar security, 100%
mutual funds, or a blend of individual stocks, bonds, exchange traded funds (or similar
security), and mutual funds. Most of our clients will have their portfolio managed using
individual stocks and bonds in some blend.
Nicollet also offers the option to do financial planning with or without investment
management. This includes cash flow, retirement, education, estate planning and financial
goal analysis.
Types of Advisory Services
Investment Management Services Offered
Nicollet has two internally managed stock strategies.
One is a large capitalization growth stock strategy that primarily invests in companies whose
market capitalization is greater than $40 Billion. This strategy is diversified by both owning
at least 20 individual companies, but more typically by holding 30 to 40 individual company
stocks. The strategy is also diversified in that we select companies in a broad range of
economic sectors and industries.
Nicollet also manages a mid-to-small capitalization growth stock strategy. This strategy
primarily invests in companies whose market capitalization is less than $40 Billion. This
strategy adheres to the same criteria on diversification (discussed above) as does our large
capitalization growth stock strategy.
Nicollet offers an alternative method for clients to have their money invested in stocks using
mutual funds or exchange traded funds. Typically the investments used in this strategy
employ an indexed approach to investing. Clients of Nicollet who prefer to have their stock
investments managed in funds are subject to a different fee structure than those investing in
individual stocks.
Nicollet also buys fixed income securities for its clients. Unlike our stock strategies where
clients using one or both of our stock strategies would typically be invested in a similar
portfolio of holdings, our bond strategy does not seek to own the same securities in each
client's portfolio. Nicollet's fixed income strategy is to customize a fixed income portfolio for
each client based on the client's circumstances, including their cash requirements, need to
preserve the value of their portfolio, income tax rates, and/or other criteria specific to the
client. In our fixed income strategy, we take into consideration general conditions in the
fixed income market that may influence our decisions on purchases or sales of fixed income
securities in all clients' accounts. Our fixed income strategy will examine and consider all
fixed income securities in the market when making decisions for clients. These securities
include: securities issued by Governmental bodies (all levels of government), securities
issued by agencies of Governmental bodies, securities issued by corporations, securities
issued by limited partnerships. Typically, we will not consider for investment any fixed
income security that is not at least of investment grade rated (BBB- or Baa) by the major
credit reporting agencies. However, in limited cases, we may have in a client’s account a
security with a rating below investment grade.
Nicollet works with each of our clients to establish the appropriate mix of stocks and bonds
in that client's portfolio. We do not charge a separate fee for this service when the client
hires us for our Investment Management Service Typically, that mix is established for the
client's entire portfolio, which includes investment accounts that Nicollet manages and the
client’s accounts that we may not manage (in those cases where Nicollet does not manage
the client's entire portfolio of accounts). The decision on the appropriate mix will establish
for the client, the amount or percentage the client will hold in subclasses of securities like
large capitalization stocks verses mid-to- small capitalization stocks. The target mix of
investments is established through discussions with the client regarding their goals and
needs for their investments and is used by Nicollet as a general guide for allocating
investments in the client's accounts.
Reviews of client holdings of stocks and bonds and comparisons to original targets are an
ongoing part of our operations. The original targeted weighting of stocks and bonds is
meant to set initial targets and we fully expect those weightings to change and
communicate this to our clients.
Some clients of Nicollet may not wish to consult with us on the mix in their investment
portfolio but instead make those decisions without consultation with Nicollet. In these
instances, the client may either have another adviser assisting them in making these
decisions or choose to make those decisions themselves. In these instances, we will
rebalance the weighting between stocks and bonds, or in other ways, whenever the client
requests.
In those cases where Nicollet is asked to assist with the determination of the mix of stocks
and bonds in the client's accounts, those choices are reviewed each time we meet with the
client, or whenever the client asks us to review those choices. Our client's accounts are also
reviewed
when individual investment decisions are being made, anytime a significant
deposit of cash or securities occurs in the client's account(s), or periodically as part of a
general review of all client accounts.
For some of our clients, they may have accounts which are too small to efficiently purchase
a portfolio of individual stocks and are accounts whose purpose is distinct from the goals of
the client's other accounts. A typical example of this is an account held for children to fund
college expenses. In these cases, we may recommend the account be managed using an
exchange traded fund (ETF) or a mutual fund where the appropriate investment strategy,
because of the small size of the account, can be implemented more cost effectively using
that type of security.
In other cases, for instance, clients who own a business and the account we are managing is
a retirement plan, we may also offer ETFs or mutual funds as investment options for the
client.
When hired for our Investment Management Service, Nicollet handles the day-to-day
management of its clients' accounts by making decisions on buying, selling, or holding
securities in our clients' accounts. Our clients' security holdings are not held at Nicollet (we
do not custody accounts). Instead, our clients custody their securities at a separate firm,
typically a broker/dealer such as Charles Schwab or TD Ameritrade (custody agent).
To perform Investment Management Services for our clients' accounts, Nicollet has the
authority through its agreement with the client, to make purchases or sales of securities in
the clients' accounts held at the custody agency. Based on its agreement with clients, we do
not contact the client prior to making a purchase or sale decision in the client's account as
the client has granted us authority to make those decisions without consultation.
In addition to assisting clients in determining the proper mix of stocks and bonds in their
accounts and managing those accounts, we may also assist clients with advice on other
financial matters. Clients of Nicollet often ask for our opinion on matters that include: debt
and debt refinance, the need for insurance, financing decisions surrounding large
expenditures, and other financial matters that families or businesses face. We provide
advice and perspective on these matters when asked, but do not hold ourselves out to be
experts in all matters outside of structuring and managing investment portfolios. When a
client's question requires the assistance of an expert in the field in which the question is
being asked, we will suggest the client consult with an expert. If asked by the client, we
have participated with our clients in conversations on matters outside Nicollet’s expertise
solely on the client’s direction and desire that we either help them frame their questions or
provide our opinions on the expert's recommendation.
Nicollet also works with clients on matters pertaining to their potential income taxes but
does not charge a fee for this service when the client has hired Nicollet for our Services.
Typically, towards the end of each year we will contact our clients (or in some cases their
accountant) who have taxable accounts under our management. We will discuss with
those clients realized gains and losses which are taxable. To the extent that Nicollet is
directed by the client (or their accountant) to minimize gains or losses, or maximize gains
or losses, based on the client’s (or their accountant’s) assessment of their need for such
gains or losses, and to the extent there are unrealized gains or losses in the client’s taxable
accounts that allow us to comply with those instructions, we will execute sales of
securities solely for the purpose of recognizing gains or losses to assist clients in
managing their income tax liability.
Financial Advisory Service
Nicollet’s Financial Advisory Service includes advice from Certified Financial PlannerTM
Professionals on a broad scope of personal financial planning issues including retirement
planning and retirement account management strategies, investment planning and asset
allocation strategies, income tax and estate planning, college education finance planning,
and wealth transfer planning. Our advice is always tailored to meet the specific needs
and circumstances of each client. Services are offered using client consultations and
company generated written reports that may include advice about investment securities
including individual equity and debt securities, mutual funds, exchange traded funds,
fixed and variable annuities, unit investment trusts and direct participation programs.
Financial Advisory services are offered on a flat fee scale based on clients’ proximity to
retirement and complexity of their personal financial picture. These services are offered
without requirement to engage in investment management services.
ERISA PLAN SERVICES
Nicollet provides service to qualified retirement plans including 401(k) plans, 403(b) plans,
pension and profit sharing plans, cash balance plans, and deferred compensation plans.
Nicollet may act as either a 3(21) and/or 3(38) advisor:
Limited Scope ERISA 3(21) Fiduciary. Nicollet may serve as a limited scope ERISA 3(21)
fiduciary that can advise, help and assist plan sponsors with their investment decisions on a
non-discretionary basis. As an investment advisor Nicollet has a fiduciary duty to act in the
best interest of the Client. The plan sponsor is still ultimately responsible for the decisions
made in their plan, though using Nicollet can help the plan sponsor delegate liability by
following a diligent process.
1. Fiduciary Services are:
• Provide non-discretionary investment advice to the Client about asset classes and
investment alternatives available for the Plan in accordance with the Plan’s investment
policies and objectives. Client will make the final decision regarding the initial selection,
retention, removal and addition of investment options. Nicollet acknowledges that it is a
fiduciary as defined in ERISA section 3 (21) (A) (ii).
• Assist the Client in the development of an investment policy statement (“IPS”). The IPS
establishes the investment policies and objectives for the Plan. Client shall have the
ultimate responsibility and authority to establish such policies and objectives and to
adopt and amend the IPS.
• Provide non-discretionary investment advice to the Plan Sponsor with respect to the
selection of a qualified default investment alternative for participants who are
automatically enrolled in the Plan or who have otherwise failed to make investment
elections. The Client retains the sole responsibility to provide all notices to the Plan
participants required under ERISA Section 404(c) (5) and 404(a)-5.
• Assist in monitoring investment options by preparing periodic investment reports that
document investment performance, consistency of fund management and conformance
to the guidelines set forth in the IPS and make recommendations to maintain, remove
or replace investment options.
• Meet with Client on a periodic basis to discuss the reports and the investment
recommendations.
2. Non-fiduciary Services are:
• Assist in the education of Plan participants about general investment information and
the investment alternatives available to them under the Plan. Client understands
Nicollet’s assistance in education of the Plan participants shall be consistent with and
within the scope of the Department of Labor’s definition of investment education
(Department of Labor Interpretive Bulletin 96-1). As such, Nicollet is not providing
fiduciary advice as defined by ERISA 3(21)(A)(ii) to the Plan participants. Advisor will
not provide investment advice concerning the prudence of any investment option or
combination of investment options for a particular participant or beneficiary under the
Plan.
• Assist in the group enrollment meetings designed to increase retirement plan
participation among the employees and investment and financial understanding by the
employees.
Nicollet may provide these services or, alternatively, may arrange for the Plan’s other
providers to offer these services, as agreed upon between Advisor and Client.
3. Nicollet has no responsibility to provide services related to the following types of assets
(“Excluded Assets”):
• Employer securities;
• Real estate (except for real estate funds or publicly traded REITs);
• Stock brokerage accounts or mutual fund windows;
• Participant loans;
• Non-publicly traded partnership interests;
• Other non-publicly traded securities or property (other than collective trusts and
similar vehicles); or
• Other hard-to-value or illiquid securities or property.
ERISA 3(38) Investment Manager. Nicollet may also act as an ERISA 3(38) Investment Manager in
which it has discretionary management and control of a given retirement plan’s assets. Nicollet
would then become solely responsible and liable for the selection, monitoring and replacement of the
plan’s investment options.
1. Fiduciary Services are:
• Nicollet has discretionary authority and will make the final decision regarding the
initial selection, retention, removal and addition of investment options in accordance
with the Plan’s investment policies and objectives.
• Assist the Client with the selection of a broad range of investment options consistent
with ERISA Section 404(c) and the regulations thereunder.
• Assist the Client in the development of an investment policy statement (“IPS”). The IPS
establishes the investment policies and objectives for the Plan.
• Provide discretionary investment advice to the Plan Sponsor with respect to the
selection of a qualified default investment alternative for participants who are
automatically enrolled in the Plan or who have otherwise failed to make investment
elections. The Client retains the sole responsibility to provide all notices to the Plan
participants required under ERISA Section 404(c) (5).
2. Non-fiduciary Services are:
• Assist in the education of Plan participants about general investment information and
the investment alternatives available to them under the Plan. Client understands that
Nicollet’s assistance in education of the Plan participants shall be consistent with and
within the scope of the Department of Labor’s definition of investment education
(Department of Labor Interpretive Bulletin 96-1). As such, Nicollet is not providing
fiduciary advice as defined by ERISA to the Plan participants. Nicollet will not provide
investment advice concerning the prudence of any investment option or combination of
investment options for a particular participant or beneficiary under the Plan.
• Assist in the group enrollment meetings designed to increase retirement plan
participation among the employees and investment and financial understanding by the
employees.
Nicollet may provide these services or, alternatively, may arrange for the Plan’s other
providers to offer these services, as agreed upon between Nicollet and Client.
3. Nicollet has no responsibility to provide services related to the following types of assets
(“Excluded Assets”):
• Employer securities;
• Real estate (except for real estate funds or publicly traded REITs);
• Stock brokerage accounts or mutual fund windows;
• Participant loans;
• Non-publicly traded partnership interests;
• Other non-publicly traded securities or property (other than collective trusts and
similar vehicles); or
• Other hard-to-value or illiquid securities or property.
Excluded Assets will not be included in calculation of Fees paid to Nicollet on the ERISA
Agreement. Specific services will be outlined in detail to each plan in the 408(b)2 disclosure
Client Tailored Services and Client Imposed Restrictions
The goals and objectives for each Client are documented in our Client files. Investment
strategies are created that reflect the stated goals and objectives. Clients may impose
restrictions on investing in certain securities or types of securities. Agreements may not be
assigned without written Client consent.
Wrap Fee Programs
Nicollet does not sponsor any wrap fee programs.
Client Assets under Management
Nicollet has the following assets under management:
Discretionary Amounts: Non-discretionary Amounts: Date Calculated:
$430,713,545 $0 06/30/2023