TIAA Receives New York Subpoena on Sales Practices
On the company’s website and in memos to employees, TIAA’s top management has characterized the allegations reported by The Times as “misleading.” The executives highlight the company’s “trusted reputation
and track record” and its “commitment to putting our clients first.”
Current and former employees who spoke with The Times said TIAA assigned its sales representatives outsize goals that were difficult to meet.
Two of these people said TIAA had a saying about creating fear among clients to generate sales: “If they cry, they buy.”
“In more than 10 years at TIAA, I have never heard such language, which is certainly not in
keeping with our values or approved materials,” said Mr. Peterson, the TIAA spokesman.
That complaint, obtained by The Times, was filed by former TIAA employees who contend they were pressured to sell products
that generated more revenue for the firm but were more costly to clients while adding little value.
The push to place clients in more costly asset-management accounts, annuities or in-house
mutual funds escalated after the firm began losing institutional accounts.
Another former employee provided sales materials that TIAA had given to its representatives
suggesting how to probe their clients to get them to act on an investment recommendation.
One page in the materials carried a headline: “The Probing Sequence, Making the Client ‘Feel the Pain.’”
This page was among sales training materials used by TIAA employees to prepare them for meetings with clients.
