News that TIAA may have strayed from its core values has shaken the 403(b) reform community. This tight-knit group of participants and fiduciary planners have been fighting for years against truly hideous sales practices and fee structures. The TIAA news, reported by Gretchen Morgenson of the New York Times, was a bombshell. Let’s just say the comments on our Discussion Board have been spirited. They are equally pointed in a Chronicle of Higher Education discussion.
Cringeworthy stuff from the New York Times
- Former employee say the company rewards its sales personnel with bonuses when they steer customers into more expensive in-house products and services.
- “There is an incentive for consultants to refer you to, or recommend that you open, TIAA accounts, products and services,” one TIAA filing with the S.E.C. said.
- TIAA’s executive pay packages are comparable to those on Wall Street. During 2016, Mr. Ferguson, its chief executive officer, received $18.5 million in compensation, $5.1 million more than Michael Corbat, the chief executive of Citigroup, received.
Personal thoughts on TIAA
- TIAA was the first financial firm to reach out to 403(b)wise (way back in 2000)
- TIAA championed K-12 403(b) reform in California on two occasions
- TIAA was the first financial firm to sponsor 403(b)wise
- TIAA supported my teacher financial literacy initiative: Pollinate, the Teacher Financial Literacy Project
- I recently documented my experience moving money to TIAA
I still believe in TIAA. It's my personal opinion that they get much more right than wrong. It is my hope that they take this opportunity to truly live up to the ideals they taut on their website: “TIAA's mission-based approach separates us from the pack.” While I don’t speak for the 403(b) reform community, I can say the following with some confidence: it's hard to find much humor in this situation (which make this my least favorite Wisecracks article).