TIAA Changes Advisors’ Sales Materials Following Allegations of Improper Practices
Following the 2018 reports in the New York Times that the Teachers Insurance and Annuity Association engaged in improper sales practices, the organization has revised training materials for its advisors, its CEO tells Barron’s.
In 2017, two separate lawsuits accused TIAA of engaging in aggressive sales practices and encouraging its financial advisors to steer clients into more expensive investment options than what was available to them, the Times wrote at the time.
Ten former employees also told the paper that TIAA’s management encouraged its sales representatives to play on customers’ “pain points.” One of the headlines in TIAA’s sales materials reported by the Times was “Making the Client ‘Feel the Pain,’” according to Barron’s.
TIAA conducted an internal review that took about a year and opted to update some of the training materials for its advisors, TIAA chief executive Roger Ferguson tells the publication.
“That material came from an outside book,” Ferguson tells Barron’s. “It doesn’t really reflect the way we want our advisors to act or to interact with our clients. That kind of phraseology, for example, has to be excised from the materials.”
As for the Times reporting about TIAA incentivizing its representatives to push in-house products and putting clients into complex products such as annuities, Ferguson tells the publication that they were “one-off examples of things that had crept into the organization.” The company’s investigation found no “systemic support for the central allegations of those articles,” Ferguson tells Barron’s.
The Times also reported that the SEC and the Commodity Futures Trading Commission were reviewing a whistle-blower complaint against TIAA while the New York Attorney General subpoenaed TIAA for more information, Barron’s writes.
The SEC, the New York AG and the CFTC all declined comment to the publication. Ferguson told Barron’s in late 2018 that regulators were “undertaking their own review and … may come to a different point of view. They continue to make inquiries of us. They ask for documents and to talk to our people. And we continue, most importantly, to give them our full cooperation.”