hearing that all the cuts to staff are a strategic plan to sell the RK business and follow in the footsteps of Vanguard. cuts to areas that could have potential overlap with the new owner have been identified and is why there are cuts to seemingly very important areas (retirement services, finance, field support). it is going to be a very bumpy next few years.
20 replies (most recent on top)
If TIAA was a publically traded company it would have been merged, sold, business unit's permanently closed years ago.......
Re: Future of TIAA Wealth. Management doesn’t have the tact or experience to roll out an offering to compete with larger players that it attempts to level up to. Attempts to revive wealth have been off track for a while now. Sadly, all the moves being made in the division seem to be creating a clear path for the firm to easily package and sell wealth to the best suited/ highest bid in the years to come. I agree with the Nuveen comments, sell RK, sell wealth, keep Nuveen business as is and ramp up effort to wholesale TIAATraditional down the DCIO channel aggressively. TIAA has not evolved its business for decades; it’s a tough reality!
Let me preface with that I have no inside information on what TIAA is doing.
Having said that, I expect TIAA to continue to buy small, "boutique" firms that focus on targeted investments, like agriculture, energy, land, etc
I also think you will see the footprint in Europe and Asia grow as the firm continues to buy azure resources in those locations.
TIAA can't compete against the sure size and pricing that vanguard, Fidelity Ave Black Rock offer. You have to compete in a different space or merge with someone like Mass Mutual, which does the exact same thing we do. On the flip side, you have lpl head quartered here and you could grow that front and save both companies money combining resources and getting better pricing on IT spend
Although I agree that a sale is the most logical action, substantial financial investments in certain programs suggest that a sale is still some time away.
The Accenture deal exemplifies this situation. The contract is for a decade, and a potential buyer of TIAA would likely prefer a faster integration into their own operations. While it is true that the deal allows them to maintain their current status quo while integrating, the substantial financial spend makes me skeptical for sale being imminent. Additionally, we made this decision to offload our operating costs, and now Accenture is responsible for managing those aspects.
Furthermore, there are several comments on this page that are fundamentally incorrect about the product offered by Empower. This product is used with multiple record keepers and has been discussed in numerous town halls and “the EC and I are awesome” kickoff calls.
When considering wealth, a significant amount of money is being spent on transitioning to a new platform. This investment would be unlikely if we are likely to be acquired within a few years.
I understand everyone's frustration and why T is being blamed for this. However, the first misunderstanding is that the non-profit education space is NOT a profitable business area to be in. Think about it, when you read financial publications, how many are discussing rushing in to service Higher-Ed & Non-Profits? Zero. Thats not where the money is.
Remember, the only organizations that would want the retirement/RK business are the ones that have huge scale. That way, they can absorb it within their business without much effort.
TIAA has been way to insular. Don't get me wrong, I think the people are it's greatest asset. But so many people had been there so long, that they had no understanding that landscape had changed. Especially with technology that was 20 years behind others. I would mention this and be completely ignored.
Say you're starting out in your career and were doing your due diligence. There are 2 companies you were interested in. The first was known for its size, breadth of customer reach, enormous resources and highly adavnced technology.
The 2nd company has been around for 100 years and has a good reputation, but is not exactly ki-ling it with technology, does not have a ton of resources and has not invested in their technology to keep up with the big players. OH, and that salaries don't compare to company 1.
Which company do you choose?
100% of the TIAA wealth business came from record keeping and mostly because we had TIAA and cref money locked up so why would they go somewhere else for wealth management? With RK soon to be gone, and no new money coming to TIAA proprietary products, wealth management will die too. Nuveen is all that will be left. Last one out, turn off the lights.
Wealth is only profitable because or big company accounting and allocation moved. Would never be able to stand on its own. Nobody outside of the non profit world and most people within it give TIAA any credibility when it comes to wealth management. Chase or someone could buy it as a nice little side piece, but it just doesn’t have the scale in the marketplace to be worth much. The extent of TIAA wealth management advice is “stick your money in this annuity so that we can lock up your money forever”.
I work in Wealth and I think it's the only division that will survive. It's where TIAA is investing all of its money and resources. No layoffs. Lot's of hiring. Still spending tons of money on retreats (Several hundred going to Huntington Beach, CA in March for a celebratory retreat at a beach side resort costing millions). I know people have mentioned Chase in other postings but I do believe Chase will take the Wealth business and it'll be something like "Chase/TIAA Wealth Management". Our 100+ year old name does hold some clout even though most people outside of the non-profit and educational sector don't know who we are but put Chase in front of our name and voila, the TIAA name survives. And with Chase money and computer systems that actually work, it'll make it a lot easier to do business with us. And by us, I mean Chase TIAA will not survive on its own. I give it 5 years or less before something like this happens.
Wealth management is profitable
The trust company is profitable
What will become of these businesses?
The Higher Education business is in decline. The Fed had a report last year that predicted roughly 80 colleges could close in 2025. Many more aren’t hiring. The landscape is shifting.
TIAA is a giant company that can last for a long time due to its sheer size. It is a behemoth and the business is tough to change direction. It is similar to trying to change direction of a cruise ship. Very slow to maneuver. Change takes a lot of time.
Sadly TIAA doesn’t have the leadership needed to be successful.
Have you noticed when companies take care of their employees? Employees work harder. There are many case studies of this. TIAA doesn’t believe in that.
Adding on the previous post, let’s not forget that the TIAA client base is dying - both on the individual and institutional level. The individual clients are old. Younger participants all went to Vanguard and Fidelity mutual funds and steered away from the annuities. All we have is retirees drawing their funds out. On the institutional side, colleges and universities are in contraction, cutting staff, and in a surprising number of cases, closing their doors. Higher Ed got fat and happy and that era has come to an end.
T is not a good leader period. However, this isn’t T’s fault. The wheels have been in motion on this for the past 20 years. The Omni conversion gave the RK business a temporary life vest but this was inevitable. The RK business has been in a race to the bottom for two decades. Buying the bank, investing in wealth management, selling off TIAA life etc were all attempts to keep RK on life support. The only part of TIAA that was worth anything I was the general account. Prior leadership knew this and went out and grabbed Nuveen. TIAA is zombie - already dead, just doesn’t know it. Nuveen is where all the money is and that’s all that will be left. This script was written 20 years ago. While there are plenty of reasons to dislike T, she hasn’t been canned because she’s doing exactly what the Board hired her to do and that is preside over the last breaths of TIAA
It’s bacislly already been sold. Most work now being done by Accenture, the product is on the Empower platform, not much left but to officially transfer it to someone on paper and dump it. Only one or two providers make any more eh on record keeping and TIAA isn’t one of them. Said it before - TIAA is dead and burried within 5 years. Nuveen will exist and your RA/SRA accounts will be fine as part of Nuveen, but there will be no more TIAA. It will be Nuveen and “just” an asset management shop. Only part that is profitable and worth saving.
I am so glad I declined Frisco relocation. Now just counting down the days until my last unless if it gets changed due to this.
That said I have no clue who in their right mind would want to buy our RK business. It’s a los-lose situation for them.
Its an acquisition. More to come late 2025
T and her minions are going to run TIAA into the ground. she brought her Jamie Dimon mentality to TIAA and has destroyed a very amazing organization.
"What's RK?" = recordkeeping. they would sell the recordkeeping business because it loses money. and only be an asset manager (via Nuveen)
What's RK?
Lowering VC also reduces cost of potential future severance packages.
I also heard they are reworking the VC amounts in most areas....not looking good.