Description of Services and Fees
Johnson is a registered investment adviser with offices in Cincinnati, Cleveland, Columbus, and
Dayton, Ohio as well as Detroit, Michigan. We are organized as a corporation under the laws of the
State of Ohio. Johnson Investment Counsel has been providing investment advisory services since
1965. We have been providing these services since 2001 under our current corporate structure.
Current ownership consists of 48 employees with no shareholder owning more than 10% of the
company. We offer the following investment advisory services,
• Portfolio Management for Individuals or Institutions
• Financial Planning Services
• Selection of Other Advisers
• Pension Consulting Services
• Mutual Fund Services
Johnson Asset Management is a division of Johnson Investment Counsel that manages institutional
separate account portfolios for a wide variety of for-profit and non-profit organizations, public agencies,
public and private retirement plans and personal trusts of all sizes. Johnson Asset Management may
also serve as a sub-adviser for mutual funds.
The following paragraphs describe our services and fees in greater detail. Please refer to the
description of each investment advisory service listed below for information on how we tailor our
advisory services to your individual needs. As used in this brochure, the words "we", "our" and "us"
refer to Johnson and the words "you", "your" and "client" refer to you as either a client or prospective
client of our firm. Also, you may see the term Associated Person throughout this brochure. As used in
this brochure, our Associated Persons are our firm's officers, employees, and all individuals providing
investment advice on behalf of our firm.
Portfolio Management for Individuals or Institutions
We offer discretionary portfolio management services. Our investment advice is tailored to meet our
clients' needs and investment objectives. If you retain our firm for portfolio management services, we
will work with you throughout our advisory relationship to determine your investment objectives, risk
tolerance, and other relevant information (the "suitability information".) We will use the suitability
information we gather to develop a strategy that enables our firm to give you continuous and focused
investment advice and/or to make investments on your behalf. As part of our portfolio management
services, we may customize an investment portfolio for you in accordance with your risk tolerance and
investment objectives. We can also invest your assets using a predefined strategy. Once we construct
an investment portfolio for you, we will monitor your portfolio's performance on an ongoing basis, and
will re-balance the portfolio as required by changes in market conditions and/or in your financial
circumstances.
If you participate in our discretionary portfolio management services, we require you to grant our firm
discretionary authority to manage your account. Discretionary authorization will allow our firm to
determine the specific securities, and the amount of securities, to be purchased or sold for your
account without your approval prior to each transaction. Accordingly, we are also authorized to issue
instructions to the custodian for operational matters of the account and to select brokers or dealers to
execute securities transactions without your approval. Discretionary authority is typically granted by the
investment management agreement you sign with our firm, a limited power of attorney, or trading
authorization forms. You may limit our discretionary authority (for example, limiting the types of
securities that can be purchased for your account) by providing our firm with your restrictions and
guidelines in writing. If you enter into non-discretionary arrangements with our firm, we must obtain
your approval prior to executing any transactions that would violate your guidelines or restrictions.
Johnson Intelligent Portfolios Program
We also offer portfolio management services through the Johnson Intelligent Portfolios Program
(“IPP”). IPP is an automated investment program through which clients are invested in a range of
investment strategies we have constructed and manage, each of which may consist of a portfolio of
exchange-traded funds, mutual funds (“Funds”) and a cash allocation. The client may instruct us to
exclude up to three Funds from their portfolio. The client’s portfolio is held in a brokerage account
opened by the client at Schwab. We use the Institutional Intelligent Portfolios Platform (Platform”),
offered by Schwab Performance Technologies (“SPT”), a software provider to independent investment
advisors and an affiliate of Schwab to operate IPP. We are independent of and not owned by, affiliated
with, or sponsored by SPT, Schwab or their affiliates. We, and not Schwab, are the client’s investment
advisor and primary point of contact with respect to IPP. We are solely responsible, and Schwab is not
responsible, for determining the appropriateness of IPP for the client, choosing a suitable investment
strategy and portfolio for the client’s investment needs and goals, and managing that portfolio on an
ongoing basis. We have contracted with SPT to provide us with the Platform, which consists of
technology and related trading and account management services for IPP. The Platform enables us to
make IPP available to clients online and includes a system that automates certain key parts of our
investment process (the “System”). Based on information the client provides to us, we recommend a
portfolio via the System. The client may then indicate an interest in a portfolio that is one level less or
more conservative or aggressive than the recommended portfolio, but we then make the final decision
and select a portfolio based on all suitability information. The System also includes an automated
investment engine through which we manage the client’s portfolio on an ongoing basis through
automatic rebalancing and tax-loss harvesting (if the client is eligible and elects).
We charge clients a fee for our services as described below. Our fees are not set or supervised by
Schwab. IPP clients do not pay brokerage commissions or any other fees to Schwab as part of IPP.
Schwab does receive other revenues, including (i) the profit earned by Charles Schwab Bank, a
Schwab affiliate, on the allocation to the Schwab Intelligent Portfolios Sweep Program described in the
Schwab Intelligent Portfolios Sweep Program Disclosure Statement; (ii) investment advisory and/or
administrative service fees (or unitary fees) received by Charles Schwab Investment Management,
Inc., a Schwab affiliate, from Schwab ETF’s, Schwab Funds and Laudus Funds that we select to buy
and hold in the client’s brokerage account; (iii) fees received by Schwab from mutual funds in the
Schwab Mutual Fund Marketplace (including certain Schwab Funds and Laudus Funds) in the client’s
brokerage account for services Schwab provides; and (iv) remuneration Schwab receives from the
market centers where it routes ETF trade orders for execution.
If you enroll in the IPP you will receive a limited offering of our suite of services and may receive less
contact from our Portfolio Managers.
Held Away Assets
Johnson uses a third-party platform to facilitate management of held away assets such as defined
contribution plan participant accounts, with discretion. The platform allows us to avoid being
considered to have custody of Client funds since we do not have direct access to Client log-in
credentials to affect trades. We are not affiliated with the platform in any way and receive no
compensation from them for using their platform. A link will be provided to the Client allowing them to
connect an account(s) to the platform. Once Client account(s) is connected to the platform, Adviser will
review the current account allocations. When deemed necessary, Adviser will rebalance the account
considering client investment goals and risk tolerance, and any change in allocations will consider
current economic and market trends. Client account(s) will be reviewed regularly, and allocation
changes will be made as deemed necessary.
Portfolio Management Fees
Our fee for portfolio management services is based on a percentage of your assets we manage and is
set forth in the following fee schedule:
Assets under
Management
Annual
Fee
First $1,000,000 1.00%
Next $2,000,000 0.80%
Next $2,000,000 0.60%
All Funds
Thereafter
0.50%
This fee schedule became effective February 10, 2017. Some clients with established relationships
prior to that date as well as some institutional accounts and family office accounts may be subject to a
different fee schedule.
Our annual portfolio management fee is billed and payable semi-annually in arrears on June 30th and
December 31st. Fees will be calculated at an annual rate based on the appraisal of the Client’s
portfolio of assets calculated using an average daily balance method of portfolio appraisal. At the end
of each day the client’s portfolio balance will be calculated. At the end of the billing cycle the resulting
daily balances will be added together and that sum will be divided by the number of days in the billing
period to arrive at the average daily balance. The agreed upon fee schedule will then be applied to
this average daily balance. The basis of the appraisal of a Client(s) portfolio(s) will use the last trade
price or the current bid price of each portfolio item. The aforementioned billing cycle and method will
apply unless an alternative method has been mutually established.
At our discretion, we can combine the account values of family members to determine the applicable
advisory fee. For example, we can combine account values for you and your minor children, joint
accounts with your spouse, and other types of related accounts. Combining account values will
increase the asset total, which can result in your paying a reduced advisory fee based on the available
breakpoints in our fee schedule stated above. Assets held in any of the funds that are part of the
Johnson Mutual Funds Trust (“JMF”) will be included in the combined account value.
In limited circumstances, we assess a fixed fee for asset management services. Under such
arrangements, the fee is negotiated on a case-by-case basis, predicated on the size of the account
and complexity of the requested services. All fees will be clearly set forth at the beginning of the
relationship and any change in fees will be clearly communicated.
Johnson Mutual Funds held in portfolios will never be subject to both an advisory fee and the expense
ratio of the fund. We will rebate a fee amount equivalent to the expense ratio on any portfolio assets
that are invested in the Johnson Mutual Funds Trust as a credit to the investment advisory fee.
Notwithstanding the foregoing, any Portfolio Assets managed through PowerAgent or a similar system
that are invested directly in the Johnson Mutual Funds Trust (the “Fund Direct Assets”) will be subject
to the expense ratio of the Johnson Mutual Funds Trust. However, the Fund Direct assets invested
directly in the Johnson Mutual Funds Trust through PowerAgent or a similar system will not be subject
to the Advisor’s fees. Mutual fund shares managed by other Advisors held in portfolios may be
charged advisory fees as well as the expenses charged by the mutual fund themselves.
We will send you an invoice for the payment of our advisory fee, or we will deduct our fee directly from
your account with the qualified custodian holding your funds and securities. We will deduct our
advisory fee only when you have given our firm authorization permitting the fees to be paid directly
from your account. Further, the qualified custodian will deliver an account statement to you at least
quarterly. These account statements will show all disbursements from your account. You should review
all statements for accuracy. We will also have the ability to review a duplicate copy of the information
reflected on your custodial account statement, to help assure all transactions are proper.
You may terminate the portfolio management agreement upon written notice to our firm. You will incur
a charge for services rendered prior to the termination of the portfolio management agreement, which
means you will incur advisory fees only in proportion to the number of days for which you were a client.
We encourage you to reconcile our invoices with the statement(s) you receive from the qualified
custodian. If you find any inconsistent information between our invoice and the statement(s) you
receive from the qualified custodian, please call our main office number located on the cover page of
this brochure.
Financial Planning Services
We offer consultative financial planning services. Financial planning will typically involve providing a
variety of advisory services to clients regarding the management of their financial resources based
upon an analysis of their individual
needs. If you retain our firm for financial planning services, we will
meet with you to gather information about your financial circumstances and objectives. We may also
use financial planning software to analyze your current financial position and to define and quantify
your long-term goals and objectives. Once we understand your long-term objectives (both financial and
non-financial), we will develop shorter-term, targeted objectives. We will review and analyze the
information you provide to our firm and the data derived from our financial planning analysis. Upon
completion of the review and analysis, we will communicate our conclusions to you, which are
designed to help you achieve your stated financial goals and objectives.
Financial plans are based on your financial situation at the time we present the plan to you, and on the
financial information you provide to our firm. You must promptly notify our firm if your financial
situation, goals, objectives, or needs change. Clients are advised that certain assumptions may be
made with respect to interest and inflation rates, past trends, performance of the market and economy.
Past performance is in no way an indication of future performance. We cannot offer any guarantees or
promises that your financial goals and objectives will be met.
You are under no obligation to act on our financial planning recommendations. Should you choose to
act on any of our recommendations, you are not obligated to implement the financial plan through any
of our other investment advisory services. If you do choose to implement the plan using our services,
we may, at our sole discretion, offset a portion of, or waive the cost of, the financial planning services.
Fees are due upon completion of services rendered. You may terminate the financial planning
agreement by providing written notice to our firm. You will incur a pro rata charge for services rendered
prior to the termination of the agreement.
Selection of Other Advisers
As part of our investment advisory services, we may recommend that you use the services of a third
party investment adviser ("TPA") to manage your entire, or a portion of, your investment portfolio. After
gathering information about your financial situation and objectives, we may recommend that you
engage a specific TPA or investment program. Factors that we take into consideration when making
our recommendation(s) include, but are not limited to, the following: the TPA's performance, methods
of analysis, fees, your financial needs, investment goals, risk tolerance, and investment objectives. We
will periodically monitor the TPA(s)' performance to ensure its management and investment style
remains aligned with your investment goals and objectives.
The TPA(s) will actively manage your portfolio and will assume discretionary investment authority over
your account. We will assume discretionary authority to hire and fire TPA(s) and/or reallocate your
assets to other TPA(s) where we deem such action is in your best interest.
The advisory fee you pay to the TPA is established and payable in accordance with the brochure
provided by each TPA to whom you are referred. We do not share in the advisory fee you pay directly
to the TPA. A separate fee is payable to us for advisory services as outlined earlier in this brochure.
You will be required to sign an agreement directly with the recommended TPA(s). You may terminate
your advisory relationship with the TPA according to the terms of your agreement with the TPA. You
should review each TPA's brochure for specific information on how you may terminate your advisory
relationship with the TPA and how you may receive a refund, if applicable. You should contact the TPA
directly for questions regarding your advisory agreement with the TPA.
Pension Consulting Services
We offer pension consulting services to employee benefit plans and their fiduciaries based upon the
needs of the plan and the services requested by the plan sponsor or named fiduciary. In general, these
services may include an existing plan review and analysis, plan-level advice regarding fund selection
and investment options, education services to plan participants, investment performance monitoring,
and/or ongoing consulting. These pension consulting services will generally be non-discretionary and
advisory in nature. The ultimate decision to act on behalf of the plan shall remain with the plan sponsor
or other named fiduciary.
We may also assist with participant enrollment meetings and provide investment-related educational
seminars to plan participants on such topics as:
• Diversification
• Asset allocation
• Risk tolerance
• Time horizon
Our educational seminars may include other investment-related topics specific to the particular plan.
Johnson will be compensated at a rate negotiated between the firm and the client on a case-by-case
basis. The fees and terms will be clearly set forth in an executed agreement for services. The amount
of the fees charged to the client will be based on the scope and complexity of the qualified plan and the
requested services. An estimate of the total cost will be determined at the start of the advisory
relationship. The final fee shall be directly dependent upon the facts and circumstances of the client's
financial situation and the complexity of the pension consulting services provided.
We may also provide additional types of pension consulting services to plans which may be at the
plan-level or participant-level. These services shall be detailed in a written agreement and be
consistent with the parameters set forth in the plan documents. Our advisory fees for these customized
services will be negotiated with the plan sponsor or named fiduciary on a case-by-case basis.
Either party to the pension consulting agreement may terminate the agreement upon written notice to
the other party. The pension consulting fees will be prorated for the quarter in which the termination
notice is given. Refunds are not applicable since fees are payable in arrears.
General - Advisory Services to Retirement Plans and Plan Participants
Discretionary Investment Advisory Services to Plans: When serving in a discretionary investment
advisory capacity for a Plan, Johnson is typically in the status defined by section 3(38) of the Employee
Retirement Income Security Act of 1974 (“ERISA”). As a discretionary investment advisor to qualified
retirement plans (“Plans”), Johnson assumes the fiduciary responsibility for the selection, monitoring
and replacement of the investment options of the Plan. As an initial action step, Johnson seeks to
obtain the investment policy statement for the Plan that details the methodologies and criteria utilized
to define the style universe of investment options, the specific investment options to be utilized and the
ongoing criteria for monitoring and replacing investment options. If the Plan does not have an
investment policy statement, Johnson may assist the Plan sponsor/trustees of the Plan in drafting an
investment policy statement. In instances where an investment policy statement is not available,
Johnson will collect information from the Plan sponsor/trustees determined necessary for Johnson’s
provision of services to the Plan.
In its role as a 3(38) fiduciary, Johnson is only responsible for those Plan investments selected by
Johnson and Johnson has no responsibility for any other Plan investments maintained in the Plan by
direction of the Plan sponsor/trustees or any other person or entity. As an example, employer
securities and investments held in a directed brokerage account are not subject to any fiduciary
responsibility or duty on the part of Johnson. Furthermore, the Plan sponsor/trustees should be aware
that when Johnson assumes the investment responsibilities by serving as a 3(38) fiduciary, the Plan
sponsor/trustees still retain all of their other fiduciary duties, obligations and responsibilities pursuant to
applicable law.
Non-Discretionary Investment Advisory Services to Plans: When serving in a non-discretionary
investment advisory capacity for a Plan, Johnson is typically in the status defined by section 3(21) of
ERISA. In this capacity, Johnson assumes no fiduciary responsibility for the completion of an
investment policy statement or any aspect of the definition, selection, maintenance or replacement of
any Plan investment options. In this non-discretionary role, Johnson provides information to the Plan
sponsor/trustees regarding investment option style parameters and performance reporting. Johnson
may make recommendations, but the Plan sponsor/trustees exercise full authority over the selection of
Plan investment options and may, or may not, utilize the information provided by Johnson as part of
their decision making process.
Other Services for Plans: As part of providing the discretionary or non-discretionary investment
services to Plans, Johnson may provide certain information and services to the Plan and the Plan
sponsor/trustees. These other services are designed to assist the Plan sponsor/trustees in meeting
their management and fiduciary obligations to the Plan. The other services may consist of the
following:
• Assist with platform provider search and Plan set-up;
• Plan review;
• Plan fee and cost review;
• Acting as third party service provider liaison;
• Plan participant education and communication;
• Plan benchmarking;
• Assist with Plan conversion to new vendor platform; and
• Assistance in Plan merger.
As detailed above, Johnson is a fiduciary under ERISA with respect to investment management
services and investment advice provided to ERISA plan clients, including ERISA plan
participants. Johnson also acts as a fiduciary when providing investment advice to individual retirement
account owners. As such, Johnson is subject to specific duties and obligations under ERISA and the
IRC, that include, among other things, prohibited transaction rules which are intended to prohibit
fiduciaries from acting on conflicts of interest. When a fiduciary gives advice in which it has a conflict
of interest, the fiduciary must either avoid or eliminate the conflict or rely upon a prohibited transaction
exemption (a “PTE”).
Mutual Fund Services
We provide investment advisory services to the Johnson Mutual Funds Trust. We are paid fees at an
annual rate of 0.90% of the average daily net assets of the Johnson Opportunity Fund, 0.75% of the
Johnson Equity Income Fund, 1% of the Johnson International Fund, 0.30% of the Johnson Municipal
Income Fund, 0.45% of the Johnson Core Plus Bond Fund, 0.35% of the Johnson Enhanced Return
Fund, and 0.30% of the Johnson Institutional Bond Funds, a portion of which has consistently been
waived. The Institutional Bond Funds also have a share class that includes a 12b-1 distribution plan.
The Johnson Opportunity Fund, the Johnson Equity Income Fund, and the Johnson Institutional Core
Bond Fund also have a share class that includes a shareholder servicing fee.
Wrap Fee Program(s)
We serve as a portfolio manager to various brokers who offer wrap fee programs ("Programs"), which
are a type of investment program that provides clients with access to several money manager or
mutual fund allocation models for a single fee. The broker charges a single fee which includes money
management fees, certain transaction costs, custodial and other administrative costs. We receive a
portion of the wrap fee for our services. The overall cost you will incur if you participate in the wrap fee
program may be higher or lower than you might incur by separately purchasing the types of securities
available in the program. To compare the cost of the wrap fee program with non-wrap fee portfolio
management services, you should consider the frequency of trading activity associated with
investment strategies and the brokerage commissions charged by the aforementioned broker-dealers,
and the advisory fees charged by investment advisers.
Types of Investments
We offer advice on equity securities, warrants, corporate debt securities, commercial paper, certificates
of deposit, municipal securities, investment company securities, US Government securities, options
contracts on securities and commodities, futures contracts on securities and commodities, and interest
in real estate, master limited partnerships, and other partnerships. We also offer guidance on private
fund investment opportunities.
Additionally, we may advise you on any type of investment that we deem appropriate based on your
stated goals and objectives. We may also provide advice on any type of investment held in your
portfolio at the inception of our advisory relationship.
You may request that we refrain from investing in particular securities or certain types of securities.
You must provide these restrictions to our firm in writing.
Assets Under Management
As of December 31, 2023, we provide continuous management services for $18,383,478,704 in client
assets on a discretionary basis, and $ 225,579,264 in client assets on a non-discretionary basis.