TIAA to Pay Fine for Encouraging Higher-Fee Accounts

Filbrandt & Company
Jul 21, 2021

TIAA has been a primary investment provider in university retirement plans since 1918. Their reputation as a trusted adviser has led them to servicing the accounts of numerous educators and nonprofit employees nationwide. Recently, the firm’s sales practices have been called into question, particularly regarding encouraging rollovers. TIAA is taking action to correct this practice and improving supervisory controls.

Some financial planners may recommend investors roll their employer-sponsored retirement accounts over to an Individual Retirement Account or IRA. While a common practice, at Filbrandt & Company this option is weighed against the fiduciary responsibility to serve in the client’s best interest. Read our report on “How to Avoid the ‘Rollover Trap’” here.

Effectively, the rollover can save clients thousands in taxes and can positively impact cash flow while providing equally valuable or better investment opportunities. Investors (or their advisers) can direct investments themselves, widening the array of options and, indefinitely, the earning potential.

When not effected in a fiduciary capacity, the rollover can result in unnecessarily high fees and product investments whose sole purpose is to earn commissions for brokers.

Many of our clients hold accounts through TIAA and will continue to do so insofar as it serves their best interests. If you are with a university and have concerns regarding your retirement accounts, reach out to or by submitting your concerns here


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