TIAA has joined the growing number of financial services firms adding a robo-advisor to its offerings, but with a few twists. In addition to passive investment options, TIAA Personal Portfolio will offer actively managed funds and socially responsible funds, and when customers open an account online, they will receive specific fund recommendations before they’re asked to fund the account.
“We recognize that there is no ‘one-size-fits-all’ when it comes to personal finances,” said Kathie Andrade, the CEO of TIAA’s retail financial services business, in a statement. “We are expanding the reach of our personalized financial support to more people, including younger generations, and those who value working with a mission-based organization.”
The 100-year old firm is offering the new service to accounts with a minimum of $5,000 in assets for an annual advisor fee of 0.3%.
TIAA Personal Portfolio uses a goal-oriented approach that focuses on meeting specific savings targets, offering five different risk levels, ranging from conservative to aggressive, and three different strategies: passive, active and impact.
The passive strategy, known as Basic, invests in low-cost index funds and ETFs. The active strategy, called Insight, is made up of funds that seek to outperform the market over the long term, and Impact prioritizes funds that meet socially responsible investing criteria without sacrificing returns. TIAA has been offering SRI funds since 1990.
The funds included Personal Portfolio are not limited to TIAA funds. They also include iShares ETFs as well as mutual funds from AMG, American Century, American Funds, Federated, Harding Loevner, Jensen Investment Management and USAA.
TIAA says customers can establish an account in less than 10 minutes by inputting their financial goals and risk levels and access their account “anytime, anywhere.”
The interface is designed to help “customers invest with ease and complete transparency in how their money will be invested,” said Scott Blandford, TIAA’s chief digital officer, in a statement.
TIAA Personal Portfolio will provide customers with asset allocation services and ongoing strategy research tailored to their goals, risk tolerance and investing preferences; rebalancing and daily account oversight; account summaries and detailed progress reports; and access to Personal Portfolio Consultants when more support is needed.
Consultants can answer questions about investments and retirement and, in the case of more complicated questions, they can suggest a meeting with a wealth management advisor in person or on the phone for no additional cost or obligation to invest in a managed account program, according to a TIAA spokeswoman.
The robo offering continues an expansion of services at TIAA. In 2014 it acquired asset manager Nuveen Investments; last June it bought MyVest, whose wealth management technology helped it launch the new robo offering; and last August TIAA announced a deal to buy EverBank Financial Corp. Also in early 2016 the firm rebranded itself, dropping the CREF part of the TIAA-CREF name to become just TIAA.
TIAA currently offers banking, advice, education and retirement services, and has $938 billion in assets under management as of the end of the first quarter.
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