TIAA-CREF Advice and Planning Services is a large, fee-based financial advisor firm with well over $25 billion in assets under management (AUM). It employs 869 advisors throughout the U.S. to manage these funds, primarily for individual investors. The firm is headquartered in New York, and it also has offices in Missouri, California, Washington, Massachusetts, Virginia, North Carolina, Texas, Colorado, Pennsylvania, New Jersey, New York, Florida, Illinois, Connecticut and Washington, D.C.
TIAA-CREF Advice and Planning Services Background
Teachers Insurance and Annuity Association of America, or TIAA, was founded by legendary American industrialist Andrew Carnegie in 1918. Since then, the company has grown massively, earning the Lipper Large Fund Award from Thomson Reuters for six years running.
TIAA’s extensive team of affiliated advisors boasts a wide range of advisory certifications. Its team includes certified financial planners (CFP), accredited asset management specialists (AAMS), chartered financial analysts (CFA) and more.
What Types of Clients Does TIAA-CREF Advice and Planning Services Accept?
TIAA-CREF Advice and Planning Services has a staggering 65,000 individual clients. It works with individuals both with and without a high net worth. Although it’s safe to say that the firm primarily serves individual investors, TIAA also works with businesses, trusts, retirement plans and charitable organizations.
TIAA-CREF Advice and Planning Services Minimum Account Size
The majority of the services offered by TIAA-CREF Advice and Planning Services call for a minimum investment of $50,000. However, the firm does vary its requirements depending on the service you’re looking for. Its minimums range as low as $5,000 for its Personal Portfolio Program, which offers web-based investment management.
Services Offered by TIAA-CREF Advice and Planning Services
TIAA-CREF offers three advisory programs that focus on different styles of investment management:
- Portfolio Advisor Program
- Customized, model-based investment portfolios
- Regular rebalances
- Portfolio Manager Program
- Discretionary portfolio management
- Asset allocation models
- Regular rebalances
- Personal Portfolio Program
- Web-based investment management
- Long-term approach with customized models
The rest of the firm’s offerings revolve around financial planning and investment management. In addition to the above programs, the firm provides the following services:
- Financial planning
- Personal financial plan creation
- Insurance needs and risk management
- Estate planning
- Education funding
- Stock option and deferred compensation analysis
- Alternative cash flow analysis
- Retirement planning
- Tax planning for the future
- Life goals analysis
- Annual financial review
- Personal financial plan creation
- Investment advisory services
- Review of existing investments
- Investment planning
- Brokerage education
- Information for retirement and investment planning
- Investment type education for mutual funds, life insurance, annuities and more
- IRA rollover walkthroughs
TIAA-CREF Advice and Planning Services Investment Philosophy
In its Form ADV, TIAA-CREF Advice and Planning Services describes its investment strategy as “consistent with prudent, long-term investing.” TIAA utilizes strong diversification principles in conjunction with asset allocation modeling to form clients’ portfolios based on their risk tolerance and ultimate financial or retirement goals.
TIAA’s asset allocation models range from “very aggressive” to “very conservative.” The level of risk that you choose to adhere to will directly inform which investments are included in your portfolio, as well as your portfolio’s expected level of return. Still, the firm has a variety of investments that it typically uses in client portfolios, including fixed income, equities, cash equivalents, money market funds and guaranteed income investments.
Fees Under TIAA-CREF Advice and Planning Services
TIAA offers a number of financial advisory and management services, and it has distinct fee schedules for each. The firm has a fee schedule for each of its three portfolio programs (the Portfolio Manager Program, the Portfolio Advisor Program and the Personal Portfolio Program) and for its financial planning services.
For the Portfolio Advisor Program, which offers model-based investment portfolios, the firm charges an annual fee that ranges from 0.40% to 1.15% of assets under management. Your exact rate will depend on how much money you’ve invested with TIAA. The firm’s Portfolio Manager Program, which offers discretionary portfolio management and asset allocation models, is slightly cheaper. For each of these programs, the firm charges clients a wrap fee, meaning that all of its service fees are bundled into one comprehensive rate.
|Portfolio Advisor Blended Fees|
|Portfolio Value||Annual Fee|
|Next $150,000 - $300,000||1.00%|
|Next $300,001 - $750,000||0.85%|
|Next $750,001 - $1,000,000||0.75%|
|Next $1,000,001 - $1,500,000||0.70%|
|Next $1,500,001 - $3,000,000||0.65%|
|Next $3,000,001 - $4,000,000||0.60%|
|Next $4,000,001 - $5,000,000||0.50%|
|Portfolio Manager Program Fees|
|Portfolio Value||Annual Fee|
TIAA’s web-based investment management program, the Personal Portfolio Program, has a set annual fee of 0.30% of assets under management. This rate is divided and charged on a quarterly basis. A client’s rate is calculated based on the value of his or her account over the preceding quarter.
TIAA offers all of its financial planning services free of charge. However, should you decide to enact your financial plan and invest in one of the products it recommends, TIAA and its affiliates will likely receive compensation.
Check out the table below to see how TIAA’s fees compare. Fee calculations for TIAA are based on the Portfolio Advisor Blended fee schedule that it provides in its Form ADV. Note that these fees are only estimates and actual costs may vary depending on various factors.
|*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount. **All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.|
|Estimated Fee Comparison*|
|Your Assets||TIAA-CREF Advice and Planning Services Portfolio Advisor Blended||National Median Advisory Fees**|
|$1MM||$8,925||$8,500 - $10,000|
|$5MM||$33,700||$25,000 - $32,500|
What to Watch Out For
As a fee-based financial advisor firm, TIAA-CREF Advice and Planning Services has compensatory conflicts of interest. TIAA advisors who recommend clients to one of the firm’s affiliated insurance agencies have the opportunity to earn additional compensation depending on how long the client remains with the firm and what the client’s premiums are.
Additionally, potential and current clients should note that advisors at TIAA are paid in two separate ways: through a salary and a discretionary annual variable bonus. The bonus amount depends on the monetary value of the advisor’s policy and account sales, as well as the length of time that the advisor’s clients remain financially engaged with the firm.
Each of the above arrangements could incentivize employees to make recommendations that may not be in line with clients’ needs. However, the firm is a fiduciary, so it is legally bound to act in clients’ best interests.
In addition to these potential conflicts of interest, TIAA also has a few disclosures that prospective and current clients should note. More information is provided below.
TIAA-CREF Advice and Planning Services has three disclosures noted on its Form ADV. This paperwork details a number of fines levied against the firm, with largest being a $275,000 fine in 2016. The Financial Industry Regulatory Authority (FINRA) fined the firm for this amount after determining that it had not sent immediate transaction confirmations to clients. FINRA also fined the firm $100,000 in 2009 for failing to report customer complaints.
Opening an Account With TIAA-CREF Advice and Planning Services
If you live near a TIAA-CREF Advice and Planning Services branch, you can stop by and speak to an advisor to learn about the firm’s services. On the firm’s website, there’s an advisor locator tool that will show you TIAA’s advisors nearest to your address.
Another option is to call TIAA to discuss becoming a client. You can call the firm at (866) 842-3519 on weekdays from 8 a.m. to 10 p.m. and on Saturdays from 9 a.m. to 6 p.m.
Where Is TIAA-CREF Advice and Planning Services Located?
TIAA-CREF Advice and Planning Services has numerous offices across the country. Its main office is in New York, near Grand Central Terminal in midtown Manhattan. You’ll also find branches in North Carolina, Texas, Colorado, Pennsylvania, Florida, Illinois, Connecticut, New Jersey, New York, Missouri, California, Washington, D.C., Massachusetts, Virginia and Washington.
Tips for Your Retirement
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