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Author Topic: TIAA article in the New York Times  (Read 4746 times)
brixton
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« on: October 23, 2017, 3:53:40 pm »

This isn't a chronicle article, but was in the NYT.  Article is on TIAA.  Some things were surprises to me.  Others weren't.

https://www.nytimes.com/2017/10/21/business/the-finger-pointing-at-the-finance-firm-tiaa.html

Discuss.
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hibush
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« Reply #1 on: October 23, 2017, 5:53:52 pm »

The story in the Times is fairly consistent with my experience with a TIAA advisor this past year. He was candid that they were offering extensive retirement advice and support so that I would be comfortable leaving my funds with TIAA after I retired. They clearly saw the money moving elsewhere is a significant problem.

The advisor made a big point about being salaried rather than commissioned, but also disclosed that there were bonuses involved. The linked story makes it clear that there is no practical difference between these performance bonuses and commissions. I had reached that conclusion myself.

The company offers an active-management service, and there was clearly an interest in getting me involved with that. This is the service that has the higher fees. I sensed significant disappointment when I didn't bite.

Overall, I'm quite happy with TIAA as a retirement plan. They offer good products at low fees. If one recognizes that they are a financial services firm rather than a kindly and altruistic uncle, there shouldn't be any big problems.

It's also important, as a customer, to recognize whether you're dealing with an advisor who has a fiduciary duty to you. It's a real problem that some don't have that duty try to imply that they do.
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prof_twocents
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« Reply #2 on: October 23, 2017, 7:17:02 pm »

I left TIAA earlier this year and switched to Fidelity. Three things made me switch.
#1. Wider selection of funds (Fidelity has some 300 funds for me to choose from vs. about 12 or so for TIAA)
#2. Better performance/lower fees. Equivalent funds at Fidelity (like a S&P500 index fund) performed as good or better as TIAA for less of a yearly fee. Fidelity also has some really good actively managed funds that have beaten the market every year for a decade.
#3. In 12 years with TIAA, not a single person from TIAA had ever contacted me to ask me anything or offer me any advice.
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ckos8783
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« Reply #3 on: October 27, 2017, 8:46:26 am »

Prior to retirement, I had been with TIAA for 37 years.  As a life-long investor, I had made the decision to move all of my TIAA funds to an IRA with my brokerage house upon retirement.  TIAA's behavior was outrageous when told I wanted to close out my account.  They did everything possible to make it difficult and employed scare tactics that were misleading and, perhaps, illegal.   The amount of paperwork they required was simply daunting.  At my wit's end, I finally found the number of a VP of TIAA and called her to complain.  Following that contact, I did manage to withdraw all my CREF funds and start the 10yr. process of getting my TIAA funds transferred out.
In my opinion, they have become a predatory, unethical company that lives on it's historic reputation to retain business.
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aandsdean
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« Reply #4 on: October 27, 2017, 9:53:59 am »

Prior to retirement, I had been with TIAA for 37 years.  As a life-long investor, I had made the decision to move all of my TIAA funds to an IRA with my brokerage house upon retirement.  TIAA's behavior was outrageous when told I wanted to close out my account.  They did everything possible to make it difficult and employed scare tactics that were misleading and, perhaps, illegal.   The amount of paperwork they required was simply daunting.  At my wit's end, I finally found the number of a VP of TIAA and called her to complain.  Following that contact, I did manage to withdraw all my CREF funds and start the 10yr. process of getting my TIAA funds transferred out.
In my opinion, they have become a predatory, unethical company that lives on it's historic reputation to retain business.

Basically every other brokerage will allow you to transfer out an account very easily--I tried to get my rollover IRA out of TIAA and finally sort of gave up because of the hassle, though when I'm feeling strong I may try again.

I agree that this behavior is really problematic.
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polly_mer
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« Reply #5 on: October 28, 2017, 8:21:45 am »

Prior to retirement, I had been with TIAA for 37 years.  As a life-long investor, I had made the decision to move all of my TIAA funds to an IRA with my brokerage house upon retirement.  TIAA's behavior was outrageous when told I wanted to close out my account.  They did everything possible to make it difficult and employed scare tactics that were misleading and, perhaps, illegal.   The amount of paperwork they required was simply daunting.  At my wit's end, I finally found the number of a VP of TIAA and called her to complain.  Following that contact, I did manage to withdraw all my CREF funds and start the 10yr. process of getting my TIAA funds transferred out.
In my opinion, they have become a predatory, unethical company that lives on it's historic reputation to retain business.

Basically every other brokerage will allow you to transfer out an account very easily--I tried to get my rollover IRA out of TIAA and finally sort of gave up because of the hassle, though when I'm feeling strong I may try again.

I agree that this behavior is really problematic.

My current broker insisted we do a conference call with TIAA to do the rollover.  My broker was great and the process took only an hour because the hoops on the TIAA side were absurd.  However, my broker knew the words to say related to the exact laws so we didn't get a runaround, just the foolishness of TIAA's process.  I don't know what TIAA thinks they are protecting when I can call and get the password reset using easily available information to then log into the electronic system to confirm the transfer instead of using the email I had on file.
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