New York

Surely all the returns are in now that TIAA-CREF has weighed in on the side of the financial advisor “movement.”

Of late, the giant financial services organization and pension system has been taking its first tentative steps in the direction of the planners, attorneys, accountants and other fee-based and fee-only financial intermediaries who serve its own customers.

The steps may be early and tentative, but this evolving “outreach” to advisors marks a major strategic departure for an 83-year-old company that has traditionally worked not from the outside in, but from the inside out–selling and servicing its products directly, through salaried CSRs (or “consultants,” as it prefers to call them).

As Dennis Foley explains it, the new strategy was fueled by some eye-opening research that showed significant numbers (25%-30%) of TIAA-CREF clients seek the help of financial intermediaries.

“That clued us in that this was a segment that was going to grow in prominence over time,” says Foley, who is vice president for annuities and mutual funds.

And no wonder, he says, when you consider the proliferation of complex savings, investing and insurance products that are out there. “It’s all very confusing,” he says, “bewildering to both the advisor and the consumer.”

According to Foley, TIAA-CREF aims first to interest targeted advisors in its products, then educate them in how best to use them–the latter on the theory that many of these products, depending on the advisor’s specialty, are likely to be unfamiliar.

The lure, says Foley, is products that are high in quality and low in cost (TIAA-CREF is a not-for-profit organization) and the payoff, the company hopes, is increased share of existing customers and access to the advisors’ other clients.

It’s spreading the news in various ways:

There’s the TIAA-CREF Institute, which provides studies and articles of interest to the advisor community on subjects like the value of Morningstar ratings, exchange-related funds and self-annuitization. These are posted on the corporate Web site and a few have been published in the Journal of Financial Planning.

There’s the board of financial advisors, to keep tabs on their needs. The group’s early interest in how annuities work brought an early lesson: the knowledge base is quite a bit lower than anybody expected and teaching the advisors how to use annuities is going to take longer than anticipated.

There’s a new “advisors-only” newsletter mailed quarterly to 18,000 fee-only and fee-based advisors. By 2002, according to plan, it will feature analyst interviews, articles on practice management and tax law, product and services updates, information on TIAA-CREF investment philosophy, and perhaps a forum on practice management issues and mentoring.

And then there’s the Web site, the focal point of the strategy, where advisors can get information on products and services as well as access to information about shared clients. The company promotes the site in its advisor newsletter and in all the ads it runs in advisor publications. It also invites its customers, through participant publications, to have their advisors visit the Web site and register for online account access.

To date, Foley acknowledges, the strategy has met with modest success, though the Web site just went live this past February.

“We’ve targeted about 500-600 advisors we know have existing relationships with our clients,” he says. Of these, only 100 have gone through the full registration process for the Web site to date. That means they’ve signed a master agreement and have been authorized by their clients to peruse and download their TIAA-CREF client information and to transact business on their behalf.

“We now get over 1,000 authorizations every month that are unsolicited,” says Foley. “So it gives you a sense of how many advisors we do have. We don’t really know the precise number, but we do know it’s quite significant,” he says.

“The world has gotten more complex, and while we think we provide a lot of good, useful information direct to the customer, there’s always the need for that personalized, one-on-one touch,” says Dennis Foley, reaching out.


Reproduced from National Underwriter Life & Health/Financial Services Edition, September 3, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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