This document describes the products and services we provide as a broker-dealer registered
with the Securities and Exchange Commission (“SEC”)
It can help you understand important
information about the recommendations we provide such as the fees we charge and how we are
paid for these services.
Specifically, this document provides information on:
• Our broker-dealer services
• The standard of conduct that applies to any recommendation (including investment strategies involving securities)
we provide for your TIAA accounts when we act as a broker-dealer as well as important considerations (including
conflicts) and limitations related to our recommendations
Regulation best interest disclosure
As of July
For over 100 years,
TIAA has served the
retirement needs
of people who work
in the academic,
medical, cultural
and research fields,
and their families.
Our goal is to
help you pursue
financial well-being
throughout your life
through a variety of
investing solutions.
TIAA provides broker-dealer services through its affiliate TIAA-CREF Individual & Institutional Services, LLC (“TC Services”) and its
registered representatives (“Financial Professionals”) We are required to provide this document to you as a retail customer
under
the SEC’s Regulation Best Interest. You may receive this document multiple times, depending on the products and services you have
with us. You should review this document (and any updates and revisions to it) when you receive any securities recommendations
(including investment strategies involving securities) from us. We refer to TC Services and its Financial Professionals collectively as
“we”“ us” “ our” throughout this document.
Retail customers are natural persons, or their legal representatives that use recommendations primarily for personal, family or household purposes. This document is
not intended for plan sponsors or non-retail customers.
• The accounts, products and services we may recommend as a broker-dealer (called “Solutions” in this document) as well as our fees and
othercompensation
• Our investment philosophy, the general basis for our recommendations and risks of investing
• Our Financial Professionals’ roles, how they are compensated and material conflicts of interest related to theircompensation
Our solutions
Most, but not all, of our clients begin their relationship with us when they enroll in an employer-sponsored retirement plan (“Plan”) at TIAA. For clients
with investing needs beyond their Plan(s) we offer a range of Solutions, such as affiliated individual retirement accounts (“IRAs”) self-directed
brokerage accounts, and variable annuities. All Solutions are described in more detail starting on page We also offer services as a registered
investment adviser and services from our affiliates (collectively, “Other Services”) which are summarized starting on page Please review all
documents and disclosures associated with Solutions and Other Services we recommend to make fully informed decisions. If you have a Plan that is
recordkept by TIAA as a service provider, we may use data from your Plan when we recommend or provide you with Solutions and Other Services. Plan
sponsors do not review or endorse any Solutions or Other Services outside of their Plans.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 2
Contents
Our broker-dealer services .....................................
Our recommendations ..........................................
The best interest standard applicable to
our recommendations ............................................
Fiduciary Acknowledgment under ERISA and
Internal Revenue Code ...........................................
Limitations on Our Recommendations: Aliated products
and related conflicts of interest ...................................
Types of aliated products and conflicts of interest ...............
Aliated funds from the TIAA-CREF and Nuveen
family of mutual funds (“Aliated Funds”) ......................
Retirement annuities issued by TIAA and CREF, including .........
Other products ................................................
Third-party products and conflicts of interest .....................
Limited buy and sell recommendations ............................
No monitoring of our recommendations ...........................
Important IRA rollover and account transfer considerations ........
Important lifetime income considerations .........................
Our solutions ...................................................
Employer-sponsored retirement plan accounts
recordkept at TIAA ................................................
TIAA IRAs ........................................................
TIAA brokerage accounts .........................................
Retail variable annuities from TIAA and its aliates ...............
Our investment philosophy and the general basis for
our recommendations ...........................................
Risks of investing ................................................
Our financial professionals and their compensation ............
National Contact Center financial services consultants ...........
Financial Consultants .........................................
Individual Financial Consultants ................................
Retirement Income Consultants ................................
Advisory Consultants .........................................
Wealth Management Advisors .................................
Managers of Financial Professionals ............................
Additional compensation from third parties .....................
Other services ...................................................
Our investment advisory services ..............................
Financial planning services ...................................
Managed account solutions ..................................
Investment management services through TIAA Trust ...........
Referrals to third parties and TIAA aliates .....................
Fixed annuities and life insurance ...............................
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 3
• Open, contribute or enroll in our Solutions, including consolidating
assets via an IRA or plan rollover or transfer
• Create a lifetime income stream by annuitizing affiliated
variableannuity holdings at TIAA (hereafter referred to as
“lifetimeincome”)
• Purchase and sell specific investments within your Plans at TIAA
(where available) and the TIAA IRAs
Recommendations to enroll in, roll over to or contribute more to a
TIAA professionally managed account are provided as registered
investment adviser services and not as broker-dealer services. You will
be provided with a separate disclosure document for managed account
recommendations. For more information about our and our affiliates’
advisory programs and offerings, see the program disclosure documents
at TIAA.org/relationshipdisclosures and the applicable client agreement.
We also offer educational services as a broker-dealer that do not involve a
Recommendation, including:
• Information about Plan benefits and investing
• Information about Solutions available at TIAA
• Education and enrollment services, including help with
contributions, servicing and distribution needs for your TIAA
Plansand other TIAA accounts
• Various online tools and calculators available through TIAA.org
Our broker-dealer services are provided based on your needs at the time
of the service.
Investment, insurance, and annuity products are not FDIC insured,
are not bank guaranteed, are not deposits, are not insured by any
federal government agency, are not a condition to any banking
service or activity, and may lose value.
Our broker-dealer services
We act as a broker-dealer when we buy and sell securities for your TIAA accounts at your direction. From time to time, we
may also provide you with investment recommendations as part of our broker-dealer services (“Recommendations”)
Specifically, we can provide Recommendations to:
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 4
Fiduciary Acknowledgment under ERISA
and Internal Revenue Code
Recommendations to enroll in an IRA, rollover/transfer to or from a Plan or
IRA, or to begin lifetime income are “Covered Recommendations.” When
we make Covered Recommendations to you, we are fiduciaries within
the meaning of Title I of the Employee Retirement Income Security Act
(“ERISA”) and/or the Internal Revenue Code, as applicable, which are laws
governing retirement accounts. The way we make money creates some
conflicts with your interests when we make Covered Recommendations, so
we operate under a special rule that requires us to act in your best interest
and not put our interest ahead of yours. Certain Plans (like governmental
plans) are not covered by ERISA; however, our internal policies and
procedures require us to adhere to the same fiduciary standard when we
provide Covered Recommendations on non-ERISA Plan assets.
Limitations on Our Recommendations:
Affiliated products and related conflicts
of interest
Many of our Solutions include affiliated mutual funds and annuities
(“Affiliated Products”) Below are descriptions of the Affiliated Products
we offer within various Solutions, and how we and our affiliates are
compensated for them. Recommending Solutions that include Affiliated
Products to you creates a conflict of interest because we and our affiliates
receive additional compensation when you invest in them. We generally
receive more compensation for the sale of Affiliated Products than for the
sale of third-party products. You may be able to obtain similar investment
products and services from another financial institution at a lower cost.
Our recommendations
The best interest standard applicable to our recommendations
Our Recommendations are subject to a standard under the SEC’s Regulation Best Interest that requires us to act in
your best interest when making a Recommendation and without placing our financial or other interests ahead of yours.
Regulation Best Interest does not require or ensure that: ) we recommend the lowest-cost option; ) we guarantee the
performance of any investment; or ) your investment objectives will be achieved. In addition, we are not responsible
for actions you take that are different from or inconsistent with our Recommendations. You assume the risk of such
decisions. We are not responsible for your delay in implementing a Recommendation. If you delay acting upon a
Recommendation, please review the latest version of this document before taking action, as the content may have
changed, and speak with a Financial Professional about whether the Recommendations continue to be in your best
interest. Visit TIAA.org/relationshipdisclosures or call -- to request the latest version of this document.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 5
Types of affiliated products and conflicts
of interest
Affiliated funds from the TIAA-CREF
and Nuveen
family of mutual funds (“Affiliated Funds”)
We earn distribution and sub-transfer agency fees for services performed
for the Affiliated Funds, whether held directly with the Affiliated
Funds or within a TC Services account. Other TIAA affiliates also earn
compensation for providing administrative, recordkeeping and investment
management services. The compensation we and our affiliates earn is set
forth in the prospectus clients will receive at or before the mutual fund
shares are delivered. Learn more at TIAA.org/prospectuses
Retirement annuities issued by TIAA and CREF, including:
TIAA Real Estate Account variable annuity (“REA”)
We earn fees for distribution services provided for the REA. TIAA earns
fees for providing investment management and administration services
to, and for bearing mortality and expense (“M&E”) risks for, REA. Learn
more at TIAA.org/prospectuses
TIAA Access variable annuities
We earn fees for distribution services provided for the TIAA Access
annuity. TIAA earns fees for providing administrative services and
bearing M&E risks for the TIAA Access annuity. The TIAA Access
annuity includes subaccounts that may invest in TIAA-CREF funds.
See the disclosure above for more information about the compensation
we and our affiliates earn when you invest in those funds. Learn more
atTIAA.org/prospectuses
TIAA Traditional fixed annuity
TIAA Traditional is issued and distributed by TIAA. It is not a security
because it only provides guaranteed and discretionary additional interest.
Additional amounts may be established on a period-by-period basis by the
TIAA Board of Trustees. The additional amounts, when declared, remain in
effect through the “declaration period,” which begins each March for TIAA
Traditional accumulating annuities and January for payout annuities.
TIAA’s earnings on TIAA Traditional come from any General Account
investment earnings above the combination of minimum guarantees
(and any additional amounts) it pays holders of TIAA Traditional plus the
amounts set aside in reserves to meet future guarantees and expenses. Any
excess earnings or reserves are eventually paid to clients or reinvested in the
business for additional client services and not held as profit to TIAA. TIAA’s
charter obligates it to offer retirement products and services to our core
nonprofit constituency on terms as advantageous as shall be practicable, all
without profit to TIAA. Certain TIAA Traditional contracts, are designed to
provide lifetime income or installment payments over time, and therefore, do
not offer full and immediate withdrawals or transfers. TIAA is able to invest
in long-term assets, and therefore, provide a higher crediting rate than would
be possible through fully liquid investments.
CREF variable annuities
CREF variable annuities are issued by CREF. We earn fees for distribution
services provided for CREF. TIAA earns fees for providing administrative
services. Another TIAA affiliate earns fees for providing investment
management services for CREF. Learn more at TIAA.org/prospectuses
Other products
Cash sweep options: TC Services and its affiliates receive compensation
when uninvested cash in your brokerage account is swept into an omnibus
deposit account at EverBank
or are swept into a limited selection of other
cash sweep options.
Deposit: TIAA Trust, N.A. (“TIAA Trust”) receives compensation when you
invest in deposits of EverBank as an investment option available in your
IRA. The cash sweep and deposits create a conflict of interest, as we/our
affiliates receive compensation when you use them. We have an incentive
As of May all funds in the TIAA-CREF family of mutual funds will be rebranded as “Nuveen Funds.”
TIAA sold its wholly owned bank subsidiary, TIAA, FSB, to investors who will each own a non-controlling interest in the bank (“the Transaction”) TIAA retained less than voting ownership interest in the bank,
in addition to controlling a board seat. Pursuant to the Transaction, nearly all the bank’s current assets and business lines have been acquired by the new ownership, with the exception of the bank’s trust business,
which was retained by TIAA. The bank under new ownership changed its name to EverBank, N.A. and rebranded as EverBank (“EverBank”) The trust business retained by TIAA maintains a separate national trust
bank charter under the name TIAA Trust, N.A. As part of the Transaction, TC Services will continue to use the TIAA Sweep Product provided by EverBank.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 6
to recommend our accounts (e.g., IRAs) to you even when other deposit
and cash sweep options elsewhere generate a higher yield for you.
After-tax annuities: We also make available and may recommend various
after-tax annuities issued by TIAA and TIAA Life Insurance Company
(“TIAA Life”) as stand-alone Solutions. These annuities are described
under “Our Solutions.”
Third-party products and conflicts
of interest
Third-party securities products, including mutual funds, exchange traded
funds (“ETFs”) and other investment options are currently available only
through certain Solutions as described below.
• Brokerage accounts provide access to third-party mutual funds,
ETFs, stocks, bonds and other investment options.
• Third-party mutual funds may also be available as part of the
designated investment options for your Plan(s) at TIAA, depending
on the options selected by the Plan sponsor.
We usually receive payments from third-party mutual funds and ETF
sponsors (or their affiliates) when you buy these products. We, therefore,
have an incentive and a conflict of interest when making third-party
products available for which we are paid more than third-party products
for which we are not paid or are paid less. The compensation we earn
depends on the distribution arrangement we and (where applicable) our
clearing firm have in place with the product issuer.
Limited buy and sell recommendations
We currently provide Recommendations to buy and sell specific securities
only in the following instances:
• For Plans, our Recommendations are limited to the funds and
annuity investment options that your Plan sponsor makes available
within your Plan, provided the Plan sponsor has authorized us to
provide this advice to you.
• For TIAA IRA and its predecessor, the Investment Solutions (“IS”)
IRA, our Recommendations are limited to Affiliated Products
including our affiliated mutual funds, affiliated annuities and bank
deposits with EverBank.
We currently do not provide Recommendations on the investment options
available in self-directed brokerage accounts. We also do not provide
Recommendations on how to invest assets not held with TIAA.
No monitoring of our recommendations
Our Recommendations are provided at a specific point in time and are not
ongoing. We do not monitor your investments unless we state otherwise
in writing, nor do we monitor any previously provided Recommendations
to determine whether you implemented them in a timely way or whether
the Recommendation remains appropriate for you. Recommendations are
non-discretionary, meaning you make the ultimate decision to purchase or
sell the investments.
Important IRA rollover and account
transfer considerations
Before rolling over or transferring assets from one account to another
(for example, from your Plan account to an IRA) consider all of your
options. You may be able to leave money in your current Plan or account,
withdraw cash or roll over the assets to your new employer’s Plan if
one is available and rollovers are permitted. Compare the differences
ininvestment options, services, fees and expenses, withdrawal options,
required minimum distributions, other Plan and account features,
and tax treatment. Your current account or Plan may have different
investment choices, features and higher or lower costs than the new
account or Plan you are considering. Also, consider whether you are
rolling over or transferring assets into accounts that have surrender
charges or do not give you access to lower-cost share classes that may be
available in your current account or Plan. Speak with one of our Financial
Professionals and your tax advisor regarding your situation. Learn more
atTIAA.org/public/pdf/Know_Your_Options_from_TIAA.pdf
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 7
If we recommend that you roll over or transfer assets out of a Plan or IRA
external to TIAA into a Plan or IRA at TIAA, we have a financial interest,
and therefore, a conflict of interest in making such a Recommendation
because we and our affiliates will earn compensation (for example,
through fees we receive in connection with your subsequent investments
and account maintenance and advisory fees, where applicable) as
described more fully in the “Our Solutions” section. Our Financial
Professionals are compensated when their customers roll over or transfer
assets into TIAA accounts as described more fully under “Our Financial
Professionals and their compensation.” Therefore, they have a conflict of
interest and an incentive to recommend a rollover or transfer or refer you
to a Financial Professional who can recommend a rollover or transfer.
Important lifetime income considerations
• Fixed annuities are insurance contracts that allow you to convert
your retirement assets (full or partial) into a guaranteed stream of
payments at regular intervals, usually beginning when you retire
and lasting for your entire life, depending on the payout option
youselect.
• Variable annuities are insurance contracts, the value of which
fluctuates based on the market performance of the underlying
sub account to which it is tied. Variable annuities can generally be
converted into a lifetime income stream or converted to a fixed
annuity after the accumulation period, pursuant to the terms of
the contract. Variable Annuities do guarantee that you will receive
income for the individual’s life during the distribution period, but will
fluctuate in value when annuitized, though the number of annuity
units held do not.
• Guarantees of fixed annuities are subject to the issuing company’s
long-term financial strength and claims-paying ability.
• Selecting lifetime income through annuitization is just one of many
payout options available under our annuities, including the TIAA
Traditional fixed annuity, the CREF variable annuities, TIAA Access
annuities, and the REA variable annuity.
–
We may recommend lifetime income to you if appropriate. Once
you have elected to annuitize with lifetime income, your election
is irrevocable, and you cannot change the income option.
However, you may be eligible to move the source of your annuity
payments from one annuity account to another, for example,
variable annuity to fixed annuity.
TIAA and its affiliates have a financial interest, and therefore, a conflict of
interest in recommending the purchase of annuities and lifetime income
for both our variable and fixed annuities.
• For variable annuities, during the lifetime income period TIAA
affiliates may receive a portion of the account’s management
expense fees, which are deducted from your annuity units and
therefore, impact the value of your annuity payment.
• For our fixed annuities, TIAA and TC Life invest the amounts you
have converted to lifetime income to support guaranteed lifetime
income amounts. Excess earnings are used to support client
services and the company’s financial strength for the benefit of
all contract owners. For TIAA Traditional, excess earnings also
may be used to provide increases to annuity income amounts
throughout retirement. Moreover, as discussed later, our Financial
Professionals are compensated when you elect to receive
lifetime income, following a Recommendation. The compensation
payable to the Financial Professional is part of his or her overall
compensation calculation and is not a direct “fee.” Therefore, these
Financial Professionals have a conflict of interest and an incentive
to recommend lifetime income or to refer you to a Financial
Professional who can recommend lifetime income.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 8
Employer-sponsored retirement plan
accounts recordkept at TIAA
You may be eligible to participate in an employer-sponsored retirement
plan recordkept at TIAA. There is generally no account minimum to enroll
in an employer-sponsored retirement plan.
Account description and important limitations
Employer-sponsored retirement plans are established by employers
for the benefit of eligible employees and participants, beneficiaries
and alternate payees with an account balance.
Plan services If you are eligible to participate in an employer-sponsored
retirement plan recordkept at TIAA, the plan sponsor has engaged TIAA
to provide services to the plan that may include:
• Education and Recommendations on plan enrollment, contribution
and distribution needs, including lifetime income. Before
contributing more to a plan, consider obtaining guidance on how
those additional contributions should be invested.
• How to allocate your current and future contributions among the
investment options offered by your plan at TIAA if your plan allows
these Recommendations. These Recommendations are sourced
from a third party. Additionally, the Plan sponsor, and not TIAA,
is responsible for selecting the investments available within the
Plan, including associated share classes of mutual funds available
through the Plan.
In some cases, the Plan sponsor may make available an optional
self-directed brokerage window to the Plan, which may provide access
to a variety of mutual funds and potentially other securities, including
different share classes (some of which may be cheaper than the share
classes available within the Plan investment line up selected by the
Plan sponsor) We do not provide Recommendations on investments
in the optional brokerage window.
Fees you pay
Ask your Plan sponsor about the fees and expenses associated with
your Plan and Plan account, which can include:
• General administrative expenses that can be charged to or deducted
from Plan balances to pay service providers like TIAA for Plan
administrative services, which may offset in whole or in part by
compensation paid to the provider by plan investments and plan
services expense fees
Our solutions
We only recommend Solutions that are available through TIAA. These Solutions include a range of account types,
products and services to meet a variety of investing needs. The types of Solutions we offer, the types of fees you pay and
the types of compensation we and our affiliates earn are described in this section. You will pay fees and costs whether
you make or lose money on your investments. Fees and costs, including expenses associated with the investments you
hold, will reduce any amount of money you make on your investments over time. We reserve the right to change the
available investments, including available share classes of particular funds over time and at our discretion as well as
fees and costs. We will notify you through a separate communication if you have an account or product subject to the
fee changes.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 9
• Expenses associated with the investment options within your Plan
(Refer to other disclosure documents such as prospectuses you
receive from us for information on expenses.)
–
Some types of Plans such as (k) and certain (b) Plans
also provide an annual Participant Fee Disclosure statement
that discloses general and individual plan expenses as well
as investment fund expenses. For more information, go to
TIAA.org/pro and enter your plan number.
TIAA Traditional is a guaranteed insurance contract. Unlike a variable
annuity, it does not include an identifiable “expense ratio” or “fee.”
Other compensation we and our affiliates earn and related conflicts
TIAA and its affiliates earn compensation in connection with
investments offered within your Plan. See the sections above
titled “Types of affiliated products and conflicts of interest” for
additionalinformation.
TIAA receives compensation for recordkeeping services, which can
be paid through indirect or direct fees charged to plan participants
or they could pay the expense out of pocket. TIAA may charge a plan
participant a plan service expense fee, though TIAA may not receive
the entire fee.
In limited instances a Plan sponsor may make annuities offered by
third parties available. We or our affiliates could receive service fees in
connection with these annuities.
TIAA IRAs
TIAA IRAs are available to retail investors who meet age and residency
requirements. There is no account minimum to open a TIAA IRA.
Account description and important limitations
The TIAA IRA and the IS IRA (collectively, “the IRAs”) offer Traditional
IRA, Roth IRA and Simplified Employee Pension IRA options.
Investment and account options: The investment and savings
options within the IRAs include:
• A menu of Affiliated Funds and retirement annuities issued by
TIAA and CREF (“Menu”) This limits the type of investment
recommendations that can be made to you through the IRA itself.
• An optional brokerage window account, which offers a broader
arrayof investments
including non-proprietary investments (see
“TIAA brokerage accounts” below for more information)
• A bank deposit account option that allows contributions to your
IRAs to be placed in one or more interest-bearing bank deposit
accounts with EverBank. If you fail to select an investment option
for the TIAA IRA, you will be defaulted into the bank deposit
account option. Learn more at TIAA.org/BankTerms
Limitations of the IRAs
• There are share class limitations with respect to the Affiliated
Funds and CREF variable annuities available within the Menu of
IRAs. Specifically:
–
We limit the share classes of the Affiliated Funds available
through the Menu to those that pay us compensation. Retail
investors may be able to purchase lower cost share classes
directly or through your Plan account(s) TIAA managed
accounts, and accounts at other financial institutions. TIAA and
its affiliates benefit from offering more expensive share classes
because we receive additional compensation for record-keeping
and administrative share classes when you invest using these
share classes.
This excludes managed accounts.
Affiliated Funds are not available as investment options for the optional brokerage window account.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 10
–
Mutual fund expenses have an adverse impact on investment
returns. Expenses decrease the total value of the mutual fund
assets, which reduces the mutual fund’s return. Share classes
with higher expenses (such as retail and retirement share
classes) therefore, result in lower returns than share classes
with lower expenses (such as institutional share classes)
–
The more expensive share classes offered through the Menu
support additional services available with respect to the Menu.
For example, the IRAs offer investment advice on the Affiliated
Funds and retirement annuities, automatic contribution
allocations, automatic required minimum distributions and
rebalancing services.
• We only offer Class R- share class of CREF, the highest-cost share
class, within the IRAs. You may have access to lower-cost share
classes in your Plan(s) at TIAA.
• The share class limitations described above create a conflict of
interest, as TIAA and its affiliates have an incentive to offer the
more expensive share class because we earn more compensation
from more expensive share classes such as the retirement share
class, while less costly share classes are available elsewhere as
described above.
• TIAA contracts issued in connection with the IS IRA prior to
October (“pre-October Contracts”) may pay higher
guaranteed rates on TIAA Traditional than the TIAA contracts
issued for TIAA IRA and the IS IRA on or after October
Funds transferred from pre-October contracts cannot be
reinvested under these contracts and new funds cannot be added
to such contracts. See your annuity contract’s rate schedule for
additional details.
• Our Recommendations on the investments within TIAA IRAs are
limited to the Menu of Affiliated Products. We may change the funds
available for purchase through the Menu and optional brokerage
window, including available share classes of particular funds, over
time and at our discretion, including the addition of more expensive
share classes.
Fees you pay
You will pay expenses associated with the investment options within
the IRAs. Refer to other disclosure documents such as prospectuses
you receive for information on expenses. TIAA Traditional within
the IRA is a guaranteed insurance contract. It does not include an
identifiable “expense ratio” or “fee.”
TIAA IRAs may be, but currently are not, subject to certain fees
that include account maintenance fees, transfer fees and an
account termination fee. Up-to-date information on these fees
and on the IRAs can be found in the Directed Trust Agreements
for the Roth, Traditional and SEP IRAs that are delivered upon
account opening. Learn more under Agreements and Disclosures at
TIAA.org/prospectuses
For information on the IS IRA, refer to the Custodial Agreement at
TIAA.org/public/pdf/i/ira_disc_annuityfunded.pdf (in the
Agreements section) regarding mutual funds and brokerage. For
information about ISIRAannuities, refer to your TIAA and CREF IRA
annuity contracts.
We do not charge commissions on IRA transactions unless you open
a brokerage window account. The commissions and other fees and
charges you pay for the brokerage account are described under “TIAA
brokerage accounts.”
Other compensation we and our affiliates earn and related conflicts
• TIAA and its affiliates earn compensation in connection with
investments offered within your IRA. See “Types of affiliated
products and conflicts of interest” and “Third-party products and
conflicts of interest” above for information on compensation and
conflicts of interest.
• Limiting our Recommendations to our Affiliated products creates a
conflict of interest, as TIAA and its affiliates earn more compensation
from affiliated investments than from third-party investments.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 11
• Brokerage window option—See section on TIAA
brokerageaccounts.
• Bank deposit account option—When contributions to your IRA
are deposited in the bank deposit account option of the TIAA IRA
or IS IRA, TIAA Trust earns service fees from EverBank. EverBank
earns income from the difference in the interest credited to your
IRA and the income it earns on the investments made with the
cash deposits. This creates a conflict of interest, as our parent,
TIAA, has an ownership interest in EverBank and TIAA Trust earns
compensation based on your balance invested in the bank deposit
account option.
• TIAA Trust also earns compensation from TIAA for serving as
custodian of the IS IRA mutual funds and securities and trustee for
TIAA IRA account assets. We, therefore, have a conflict of interest
when recommending IRAs as we and our affiliates benefit from
IRAaccounts.
TIAA brokerage accounts
Brokerage accounts are available to all retail investors. There is no
account minimum to open a brokerage account or any minimum
balancerequirement.
Account description and important limitations
A brokerage account (or brokerage window account) allows you to
invest in a range of securities such as stocks, bonds, mutual funds,
ETFs, CDs and options. A variety of brokerage accounts are available,
including but not limited to taxable accounts and IRAs. Margin-to-buy
securities are only available for qualifying taxable accounts. We
provide our brokerage accounts through a clearing arrangement with
athird-party firm, Pershing LLC.
Brokerage accounts held with the firm’s clearing broker, Pershing LLC,
include a sweep program feature that automatically transfers available
uninvested cash balances at the end of each business day into one
or more interest-bearing bank deposit accounts with EverBank, up
to a maximum amount set by EverBank (not to exceed current per
depositor FDIC insurance limits and presently up to )
Uninvested cash balances in excess of the maximum amount
accepted by EverBank are swept into the Liquid Insured Deposits
Option (“LIDS”) operated by Pershing. Balances allocated to LIDS are
placed with one or more third-party FDIC-insured institutions. Once a
brokerage account is open, clients can request exclusive use of LIDS or
switch to a money market mutual fund sweep option. Learn more at:
TIAA.org/public/invest/financial-products/brokerage-accounts/
interest-rate-disclosure
Limitations
While we may recommend opening a brokerage account, we do not
currently provide investment Recommendations for brokerage
accounts. However, research and screening tools are available to help
you locate potential investments.
We limit the mutual funds and share classes available through
brokerage accounts. We only provide mutual funds that are available
through our clearing firm and where we have an agreement with
the fund family to offer their funds and waive sales loads. These
agreements do not always include access to all share classes. Most of
the mutual funds and their corresponding share classes available for
purchase pay compensation to us. However, we also offer funds where
no compensation is paid to us. You may be able to purchase other share
classes of the funds through other products and services available
through TIAA (e.g., through your Plan) or through the funds themselves
or other providers. We may change the funds available for purchase
through brokerage accounts, including available share classes of
particular funds, over time and at our discretion, including the addition
of more expensive share classes. Please note that there may be more
than one share class available for the funds offered in the brokerage
window. Customers should carefully review all available share class
options and the fund’s prospectus to determine which share class may
be most appropriate to their particular circumstances. Affiliated Funds
are not offered through the IRA brokerage window account.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 12
Fees you pay
The most common fees are brokerage commissions and transaction
charges. These help cover our expenses for taking trade orders,
facilitating money transfers between TIAA and other financial
institutions at your direction, mailing statements and prospectuses
to you and providing you access to your account in a variety of ways.
Commissions for each applicable transaction are the most common
charges. The amount varies depending on whether trades are placed
online or through a Financial Professional and on the frequency of
trading and include:
• Stocks (equities) and ETFs: to
• Options: to per contract
• Mutual funds: to
• Bonds: per bond
Learn more at TIAA.org/public/brokerage-account-fees
Other fees, which can also be found in the Commission and Fee
schedule (at the above link) include various account maintenance
fees, distribution and shareholder servicing fees, redemption fees,
transfer fees, IRA termination fees, check writing and debit card fees
and fees to service special and alternative investments. Additionally,
for accounts with margin lending capabilities you will pay margin
interest on any outstanding balance as disclosed in the Margin
Disclosure document. You also will bear the underlying expenses of
the investments you hold as disclosed in the prospectus or similar
document. There is no account maintenance charge.
Other compensation we and our affiliates earn and related conflicts
We usually receive compensation from sponsors and mutual funds
(and their affiliates) for investments in mutual funds, ETFs and money
market mutual funds through brokerage accounts. This compensation
is typically paid from the assets of the investment as outlined in the
relevant prospectus and is an annual percentage of invested assets.
Specifically, we may receive ongoing compensation, including b-
fees (which we receive at the outset and on an ongoing basis) and
other compensation, from the mutual fund’s distributor, transfer
agent or investment advisor for associated distribution, marketing
and/or administrative services. The amount of compensation we
receive varies from product to product.
TIAA Sweep Product provided by EverBank
TC Services receives fees from EverBank on self-directed brokerage
cash swept to EverBank accounts and b- fees and service
fees for any LIDS or money market funds available through the
cash management sweep service, creating a conflict of interest
when we recommend brokerage accounts. Please consult the
disclosure document for the LIDS money market funds for more
information about such fees at TIAA.org/public/pdf/pershing_fj_
termsconditions.pdf
EverBank provides bank deposit accounts for the cash management
sweep service and earns income from the difference in interest
credited to your account and the income it earns on the investments
made with such cash deposits. We have a conflict of interest when
your cash is swept into a bank deposit account offered through
EverBank, as we earn more compensation than with LIDS or with
money market funds. TIAA also owns a minority interest in EverBank
and EverBank earns income on investments made with cash deposits
it accepts through the TIAA Sweep Product. We and TIAA, as a
minority owner of EverBank, benefit by agreeing to use EverBank for
the TIAA Sweep Product even when other options earn a higher yield
for you. TIAA makes other sweep options available in all brokerage
accounts, not all sweeps are available in all Accounts. To discuss
available sweep options or request a change from your current sweep
option, contact TIAA Brokerage at -- EverBank sets
the interest rates for deposits through the TIAA Sweep Product and
interest rates paid on deposits in the TIAA Sweep Product will vary
from, and may be lower than, interest earned on other sweep vehicles
(including sweep vehicles available within other TIAA products)
Further, EverBank is not obligated to pay clients the same rate as
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 13
paid to its other customers and the interest rate paid to clients may
be lower than that paid to other bank customers based on the terms
of service being offered. The interests of EverBank with respect to
the setting of this rate are different from TC Services—the higher
the deposit amount and the lower the interest rate paid, the more
EverBank earns. Learn more at TIAA.org/public/pdf/Bank_Sweep_
TC_Final.pdf
Retail variable annuities from TIAA and
its affiliates
Retail variable annuities, outside of Plans and IRAs, from TIAA and its
affiliates are available to all retail investors. Account minimums are set
forth below.
Account description and important limitations
Retail variable annuities
An after-tax retirement annuity (“ATRA”) is available to participants
of TIAA Plans who have a funded Retirement Annuity (“RA”) contract
in their Plan and are looking to save more outside their retirement plan
on an after-tax basis. Allocation of ATRA contributions are limited to
the following affiliated retirement annuities: TIAA Traditional, certain
CREF annuity accounts and REA.
We offer the Intelligent Variable Annuity (“IVA”) through TIAA Life,
which is an individual flexible premium, deferred variable annuity
contract allowing you to take a lump-sum payment or a series of
payments after the minimum initial premium of has been
met. Like all annuities, your contributions can grow tax deferred until
you begin withdrawals or income payments. Additionally, this annuity
provides the option to create a future income stream to support your
overall financial plan.
We also offer the Investment Horizon Annuity (“IHA”) an individual
flexible premium modified guaranteed fixed annuity, which is issued
by TIAA Life and distributed through TC Services.
We no longer offer the Single Premium Immediate Annuity (SPIA)
contract for sale. In addition, while we no longer offer the following
retail annuities for sale, contributions to existing policies are still
permitted: Lifetime Variable Select (LVS) contract, Teachers
Personal Annuity (TPA) contract and Personal Annuity Select (PAS)
contract. The LVS, SPIA and PAS annuities were offered through TIAA
Life, and TPA was offered through TIAA.
Important limitation on retail variable annuities
We currently only offer retail annuities issued by our affiliates. We and
our affiliates earn higher fees, compensation and other benefits when
you invest in a product that we manage or sponsor. We, therefore,
have an incentive to recommend these products over third-party
products. Other comparable annuities with the same or lower costs
may be available outside of TIAA.
Fees you pay
Retail variable annuities
ATRA: The fees and expenses you pay when making contributions to
the ATRA contract vary based on the fees and expenses associated
with the annuity to which contributions are allocated. Common
charges include administrative expenses, distribution expenses,
investing expenses and M&E expenses. Investing expenses currently
range from approximately to on an annual basis of
the net assets in the variable annuities. These fees and expense
ratios are detailed in the prospectuses, which can be found at
TIAA.org/prospectuses
Our retail annuities (the IVA, SPIA, IHA, LVS, TPA and PAS) include a
range of underlying investment options (typically mutual funds) held
by the insurer in subaccounts. They do not currently impose a sales
load or a surrendercharge.
You will also pay for expenses associated with the investment options
within the annuity contract. These fees and the reason they are
imposed are described in the prospectus for each product.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 14
Common charges, for IVA which are deducted on a daily basis, include:
• An administrative expense charge for allocating premiums
and administering the contract’s accumulation value
( of accumulation value on an annual basis after waiver)
• An M&E risk charge to compensate TIAA for bearing certain
mortality and expense risks (approximately to depending
upon the accumulation values)
• Net portfolio operating expenses, which are subject to change and
can be found in the prospectus
• Other categories of fees, including an annual maintenance fee,
premium tax charges, transfer charges and optional rider charges
The retail variable annuities may also charge an annual maintenance
fee of if the contract value falls below and an advisory
fee (approximately ) where applicable.
The IHA will assess a surrender charge for surrenders or withdrawals
taken from a fixed-term deposit more than days before the end of
its term. The surrender charge rate equals one-half the total interest
rate applicable to the fixed-term deposit.
The IHA may deduct premium taxes, ranging from approximately
to and charge an annual maintenance fee () if your contract
accumulation is less than In addition, it will generally apply
a market value adjustment on any surrender taken from a fixed-term
deposit more than days before the end of its term, withdrawal more
than days before the end of a fixed-term deposit’s term, or if you
apply your contract accumulation to an income option more than one
year before the end of a fixed-term deposit’s term. A market value
adjustment may be positive or negative, which means it may increase
or decrease the amount you receive as surrender, withdrawal or
annuity payment.
For up-to-date fees, charges and portfolio operating expenses for the
IVA, SPIA, IHA, LSV, TPA and PAS, please see the prospectuses at
TIAA.org/prospectuses in the section on after-tax annuities.
Other compensation we and our affiliates earn and related conflicts
The ATRA is a proprietary product with only proprietary investment
options. This creates a conflict of interest because TIAA and its
affiliates earn more compensation from affiliated annuities than they
would from third-party annuities.
TIAA Life and its affiliates may profit from M&E expenses and
investments in underlying proprietary funds. TIAA and its affiliates
may also receive payments from some or all of the portfolios, their
investment managers, distributors or affiliates. These payments are
used for a variety of purposes, including payment of expenses TIAA
incurs for promoting, marketing and administering the contract and for
its role as an intermediary. TIAA may also profit from these payments.
The amount of the payments received is based on a percentage of the
portfolio’s assets owned by the investment accounts.
TC Services provides distribution services and is reimbursed for
its associated expenses by TIAA and its affiliates. TC Services also
distributes the mutual funds that form the subaccount investment
options and receives b- fees and other compensation for the
associated distribution, marketing and/or administration services
provided as described in the fund prospectus.
We have a conflict of interest in recommending all retail annuities
and additional contributions to these annuities as we and
our affiliates earn more compensation from them than from
third-party retail annuities. The amount of the payments received
is based on a percentage of the portfolio’s assets owned by the
investmentaccounts.
We and our affiliates earn more fees, compensation and other benefits
when you invest in a product that we manage or sponsor because we
receive customer fees that would otherwise be paid to third-party
fund companies for the sale of their funds. We, therefore, have an
incentive to recommend those products over third-party products.
Comparable annuities with the same or lower costs may be available
outside of TIAA.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 15
• Invest early and often. Investing early and contributing
regularly according to a well-constructed financial plan can help
you achieve your desired goals. It includes taking advantage
of your retirement Plan benefits, including any employer
match and establishing a savings strategy that considers
both your everyday life needs and your longer-term
retirement objectives.
• Diversify your investments and commit to the long term.
The longer your assets are invested, the greater the probability
of achieving expected results. Diversifying your investments
across the major asset classes consistent with your risk tolerance
and your financial objectives can improve your probability of
long-term success.
• Invest to achieve specific outcomes. Having the appropriate
investment approach improves the likelihood of achieving your
specific financial goals. For example, maximizing returns vs.
protecting your investments’ principal.
• Position your portfolio to generate lifetime income. With
retirement expected to last to years or more, plan for the
long run. To help maintain your lifestyle, position your portfolio—in
conjunction with Social Security and Pension—to cover at least
two-thirds of your expenses in retirement. We believe that
guaranteed Lifetime Income generally plays an important part in
meeting this goal, depending on your individual circumstances, so
that you can protect against outliving your assets.
• Protect your income and family. Protect what matters most.
Annuities and life insurance can help hedge against the unexpected
and cover essential expenses during retirement, help replace your
income in the event of your death and help protect your family.
Our Recommendations are intended to be implemented through products
and services available through TIAA’s Solutions.
• When we make Recommendations to you, we adhere to applicable
professional standards and state and federal regulations and
laws, including providing investment Recommendations that are
consistent with generally accepted investing principles and that
are based on your individual circumstances, risk tolerance and
needs. We also consider reasonably available alternatives at TIAA,
whereapplicable.
• In some instances, our Recommendations are based on advice from
an independent third party, such as Recommendations to help you
select investment options available within your Plan(s) and your
TIAA IRA or IS IRA.
• We perform a centralized review of our Recommendations that is
separate from the Financial Professional advising you to determine
whether Recommendations are appropriate for your financial needs.
Our investment philosophy and the general basis for
our recommendations
Our investment philosophy helps inform our Recommendations, and is based upon the following elements we believe are
essential to pursuing a confident and secure financial future.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 16
Investing risks. Securities and other investment products like mutual
funds, variable annuities, stocks and bonds involve certain risks, and
you may lose money, including possible loss of principal. You should be
prepared to bear such risks. There is no guarantee that you will meet
your investment goals or that our Recommendations will perform as
anticipated. Past performance does not guarantee future results.
Market risks. The price of any security or the value of an entire asset
class can decline for a variety of reasons, including but not limited to
changes in the macroeconomic environment; unpredictable market
sentiment; forecasted or unforeseen economic developments, interest
rate changes, regulatory changes, and domestic or foreign political,
demographic, epidemic, pandemic or social events. If you have a high
allocation to a particular asset class, it may negatively affect overall
performance to the extent that the asset class underperforms relative to
the market. Conversely, a low allocation to a particular asset class that
outperforms other asset classes will cause investments to underperform
relative to the overall market.
Global economic risk. National and regional economies and financial
markets are becoming increasingly interconnected, which increases
the possibilities that conditions in one country, region or market might
adversely impact issuers in a different country, region or market. Changes
in legal, political, regulatory, tax, and economic conditions may cause
fluctuations in markets and securities prices around the world, which
could negatively impact the value of an account’s investments. Major
economic or political disruptions, particularly in large economies, may
have global negative economic and market repercussions. Additionally,
events such as war, terrorism, natural and environmental disasters and
the spread of infectious illnesses or other public health emergencies
may adversely affect the global economy and the markets and issuers
in which an account invests. These events could reduce consumer
demand or economic output, result in market closure, travel restrictions
or quarantines, and generally have a significant impact on the economy.
Such events could materially increase risks, including market and liquidity
risk, and significantly reduce account values. These events could also
impair the information technology and other operational systems upon
which service providers rely, and could otherwise disrupt the ability of
employees of service providers to perform essential tasks on behalf
of an account. There is no assurance that governmental and quasi-
governmental authorities and regulators will provide constructive and
effective intervention when facing a major economic, political or social
disruption, disaster or other public emergency.
Mutual funds and ETFs (“Funds”) risks. Investing in shares of a Fund
involves risk of loss that clients should be prepared to bear. For mutual
funds and ETFs in particular, this includes the risk that the general level
of underlying security prices may decline, thereby adversely affecting
the value of the Fund. Moreover, a Fund may not fully replicate the
performance of its benchmark index. Funds are not guaranteed or insured
by the FDIC or any other government agency. Funds have their own fees,
investments and risks. For the specific information associated with any
Fund, please consult the Fund’s prospectus and statement of additional
information, which you should read carefully.
Annuity risks. Any annuity guarantees are subject to the claims-paying
ability of the insurer. Variable annuities contain both investment and
insurance components and are generally deemed securities. The
investment returns and principal value of the available subaccount
portfolios are not guaranteed and will fluctuate. The value of an
Risks of investing
While we take reasonable care in developing and making Recommendations to you, there are nevertheless risks
associated with investing.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 17
investor’s variable annuity units, when redeemed, may be worth more
or less than their original value. In addition, payments from the variable
annuity accounts are not guaranteed and will rise or fall based on
investmentperformance.
Margin risk. While trading on margin may confer a higher profit potential
than traditional trading, it also has greater risks. Purchasing stocks on
margin amplifies the effects of losses. Additionally, our clearing firm may
issue a margin call, which would require you to liquidate your position
in a stock or front more capital to keep your investment. Learn more at
sec.gov/oiea/investor-alerts-and-bulletins/ib_marginaccount
Options risks. If you are approved for options trading privileges, you
will be sent options disclosure documents laying out the characteristics
and risks of options trading. Learn more at TIAA.org/public/pdf/c/
characteristics-risks-stndrdized-optns.pdf
Additional important information. Please consult any available offering
and disclosure documents such as prospectuses, which provide greater
detail about product-specific investment risks. Wecan provide those
documents to you or help you find them.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 18
All Financial Professionals and their managers are paid a salary and
are eligible for a discretionary variable bonus (“bonus compensation”)
The size of the bonus is based on a number of factors, including the
performance of TIAA and its affiliates, including TC Services, and the
individual performance of the Financial Professional (and in some
cases on team performance) The metrics used to assess the individual
performance of our Financial Professionals vary by service group.
When the compensation differs based on which product or service is
recommended for clients, this presents a material conflict of interest.
All Financial Professionals have an incentive to recommend products or
services, available through TIAA that increase his or her compensation
and the compensation to TIAA and its affiliates, including TC Services,
asdescribed below.
We address this conflict by disclosing it to you and by requiring that
recommendations to purchase TIAA products, services and accounts
are reviewed, in accordance with the applicable regulatory standard, to
determine whether they are appropriate for clients’ financial needs.
Additionally, when we provide Recommendations to help you select among
the investment options available within your Plan, TIAA IRA, and IS IRA,
this advice is made by an independent third party.
Financial Professionals have an incentive to provide different levels of
service to their clients, including providing preferential service to those
clients who generate greater compensation.
More information about the role of each group of Financial Professionals
and their eligibility for bonus compensation is discussed below. Please ask
your Financial Professional to explain which group they are associated
with if this is not clear to you.
National Contact Center financial
services consultants
Role. Our phone-based National Contact Center financial
services consultants (“NCC consultants”) primarily provide
investment information, service and enrollment support to Plan
participants. They also provide education about their Plan accounts. They
do not provide Recommendations. NCC consultants may also provide
general information on college savings tuition plans administered through
TIAA affiliates. They refer investors who have more extensive investment
needs such as brokerage accounts, IRAs, managed accounts, annuities
and life insurance to TC Services’ Financial Professionals, including our
Advisory Consultants and Wealth Management Advisors.
Bonus compensation. The amount of bonus compensation
paid to each NCC consultant is determined using quantitative
and qualitative performance criteria, including voice of
thecustomer, operational quality, efficiency and
relationship-building metrics. The relationship-building metric includes
the quality and rate of referrals to Advisory Consultants and Wealth
Management Advisors for clients with more complex investing needs.
Our financial professionals and their compensation
Our Financial Professionals act as broker-dealer registered representatives when they provide our broker-dealer services,
including Recommendations. Some of our Financial Professionals, specifically our Wealth Management Advisors
(“WMAs”) and our Advisory Consultants also provide separate investment advisory services (as described below under
“Our investment advisory services”) Other Financial Professionals described in this section such as our Financial
Consultants may refer clients to WMAs and Advisory Consultants for investment advisory services and act only as
broker-dealer representatives.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 19
While the relationship-building metrics reward the NCC consultant for
successful referrals, the metric does not favor any particular product,
service or Solution. Even though all referrals receive equal credit,
providing credit for referrals nevertheless creates a conflict of interest
when NCC consultants refer investors to other TC Services’ Financial
Professionals or to third parties.
Financial Consultants
Role. Financial Consultants within TIAA’s employer plan
retirement business also serve Plan participants at the
employers’ on-site locations and virtually. They provide Plan
and IRA enrollment services, education and/or specific Recommendations
on Plan and IRA investment options and contribution increases. Before
contributing more to a plan, consider how those contributions will be
invested and whether such investments are in line with your financial
circumstances and needs. Financial Consultantsalso provide
Recommendations on transfers and rollovers toPlansor IRAs at TIAA.
They may also refer clients to Wealth ManagementAdvisors and Advisory
Consultants for these and otherproducts andservices. Financial
Consultants act only as broker-dealerrepresentatives.
Bonus compensation. The amount of bonus compensation
paid toeach Financial Consultant is determined using
quantitative and qualitative performance criteria, including
client experience/satisfaction, teamwork and financial results.
Financial results metrics measure and reward bringing new assets to
TIAA, new participant enrollments and contribution increases, client
implementation of investment advice, asset transfers into Plans
administered by TIAA, creating a lifetime income stream through
annuitization and enrollments and rollovers to TIAA IRAs. Financial
results also measure and reward internal transfers and rollovers,
educational conversations, successful client referrals by the Financial
Consultants to other groups at TIAA (and third parties such as EverBank)
for other products, services and Solutions. Financial Consultants are
alsorewarded for the number of times they deliver investment
recommendations, as well as financial planning reports to clients.
Thefinancial results assessments are made by comparing each Financial
Consultant’s efforts to the efforts of their peers. Financial Consultants
receive equal compensation for all financial results and all referrals, and
the metrics do not favor any particular product or service available
through TIAA. Nevertheless, this bonus compensation creates a conflict
of interest when Financial Consultants recommend or offer TIAA
Solutions and refer investors to other Financial Professionals.
Individual Financial Consultants
Role. Individual Financial Consultants serve clients (by
telephone and video conference) who are primarily seeking
education and guidance on Plan and IRA assets. They perform
various functions, including assisting investors with retirement Plan
information and Recommendations; education services; brokerage and
IRA enrollment/servicing needs; and lifetime income. They also educate
investors about various TIAA investment options. Individual Financial
Consultants act only as broker-dealer representatives.
Bonus compensation. In assessing individual and team
performance for purposes of the annual variable bonus,
TIAAprimarily considers quantitative metrics, sales across
various TIAASolutions and financial results. Financial results
consist of gathering client assets in appropriate TIAA products, services
andaccounts and rewards the Individual Financial Consultant for
successful sales, institutional and retail product enrollments, and
successful referrals (including to EverBank for deposit products)
regardless of the TIAA Solution. These consultants are also rewarded
forthe number of times they deliver reports to clients relating to lifetime
income. Financial results also include an assessment of the number
oftimes their client base hastaken any of the following actions:
()implementation of the recommendations made in retirement advice
sessions for Plans or TIAA and IS IRA () contributes more toa plan
()surrender of TIAA annuity holdings in exchange for the creation of a
lifetime income stream with a Plan or a TIAA/IS IRA or lifetime income
decisions. The financial results assessments are made by comparing the
Individual Financial Consultant’s efforts to the efforts of their peers.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 20
Several qualitative factors are also considered such as client survey
results, service quality, leadership, teamwork and adherence to company
policies and regulatory standards. Thus, there is an incentive for these
Individual Financial Consultants to recommend TIAA accounts, products
and services. These compensation arrangements create conflicts of
interest when these representatives refer clients to or recommend
TIAA accounts, products and services and Solutions or certain actions
likeannuitizing.
Retirement Income Consultants
Role. Retirement Income Consultants (“RIC”) assist clients with
planning for and meeting their income needs in retirement,
including creating a lifetime income stream. They also provide
guidance on taking distributions in retirement, such as Required Minimum
Distributions (“RMD”) Interest Only option (“IO”) and Systematic
Withdrawals and Transfers (“SWATs”) These services are provided by
telephone and video conference. RICs act as broker-dealer representatives.
Bonus compensation. In assessing individual performance
forpurposes of the annual variable bonus, TIAA primarily
considers quantitative metrics such as credit for adding
external assets to TIAA IRAs, certain plans, after-tax annuities
and retail annuities. These metrics also include a separate assessment
ofthenumber of times the RIC delivers reports to clients relating to
retirement income where the client takes action following the receiptof
the report, such as by creating a lifetime income stream, takingan RMD,
IO or a SWAT. Several qualitative factors are also considered such as
service quality, leadership, teamwork and adherence to company policies
and regulatory standards. Financial results also include credit for
educating clients and for successful referrals to other teams and third
parties such as EverBank. The financial results assessments are made
bycomparing each RIC’s efforts to the efforts of other RICs. These
compensation arrangements create conflicts of interest when RICs
referclients to or recommend TIAA accounts, products and services
andcertain actions like creating a lifetime income stream.
Advisory Consultants
Role. As broker-dealer representatives, Advisory Consultants
serve clients who are seeking education and guidance on Plan
and IRA assets and other investing needs. These services are
provided by telephone and video conference. In addition, Advisory
Consultants may also provide clients with financial planning services
andcertain Advisory Consultants may also assist with managed
accountenrollment/servicing needs in their capacity as investment
adviserrepresentatives.
Compensation of Advisory Consultants. In assessing
individual and team performance to determine bonus
compensation, TIAA considers quantitative measures related
to financial results and qualitative assessments. The
quantitative measures include credit for gathering external assets,
engaging with clients and having them retain assets at TIAA, and
referring clients to TIAA Wealth Management Advisors or third parties.
The Advisory Consultants are rewarded equally regardless of the type
ofTIAA Solution utilized for external assets. In addition, Advisory
Consultants are compensated based on the number of times the clients:
implement investment advice sourced from a third party, convert
annuity assets to lifetime annuity income payments; and rollover/
transfer from one TIAA product to another. Each of these activities
creates a conflict of interest for the Advisory Consultant.
Advisory consultants are compensated for delivering reports to clients
related to financial planning, investment advice recommendations,
retirement income strategies and annuity income illustrations as well as
discussing certain Plan advice services, conducting initial meetings and
certain period goal review meetings.
Advisory Consultants are also assessed on their service quality,
leadership, and teamwork, as well as on their client survey results and
adherence to company policies and regulatory standards. The results
of these measurements are compared against all other Advisory
Consultants to determine bonus compensation.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 21
Wealth Management Advisors
Role. Our WMAs serve clients who generally have more
in-depth investment and financial planning needs.
As an investment advisory service, WMAs provide goals-based
financial planning services to their clients that can address a variety of
needs such as saving for retirement, protecting their financial security,
leaving a legacy and allocating investments for retirement assets. As
a broker-dealer service, WMAs may also suggest or recommend the
following accounts, products and services to meet clients’ investing
and financial planning needs and objectives: brokerage accounts, IRAs,
annuities and lifetime income. Finally, where appropriate, WMAs may
refer clients to TIAA affiliates and third parties for life insurance, tuition
financing, or EverBank for banking needs.
Compensation of WMAs. TIAA’s compensation philosophy
aimsto reward WMAs with appropriate bonus compensation
for sales of products and services available through TIAA,
themaintenance of client relationships and the associated
retention of assets in products and services at TIAA. WMAs are eligible
for a variable compensation bonus. TIAA pays WMAs the same bonus
compensation for gathering and retaining assets in retirement products
and services available through TIAA (specifically, Plans andthe TIAA IRA
and IS IRA) as for gathering and retaining assets inTIAA Managed
Accounts. Within Plans, TIAA pays WMAs the samebonus compensation
for providing and implementing asset allocation advice forplans and IRAs
as it does for clients who have enrolled in asset rebalancing services in
Plan such as Retirement Plan Portfolio Manager (“RPPM”)
The way bonus compensation is calculated and the differences in bonus
compensation among products and services are described below. The variable
bonus for WMAs is determined based on the following elements: the assets
attributable to the WMA’s book of business (“BookAward”) new dollars into
TIAA products and services from outside TIAA (“Sales”) and behavior-based
measures. On average, the Book Award accounts for approximately of
a WMA’s bonus compensation; Sales account for approximately and
approximately is based on behavior-based measures.
All of the awards to WMAs may be reduced if a WMA fails to meet
minimum performance standards for among others, book award, Sales,
or net asset flows, or behavioral measures. TIAA in its discretion can
reduce the final determination of award amounts for other reasons, such
asfailure to comply with company policies. Below is more detail for the
three components of WMAs variable compensation.
Book Award: WMAs receive variable bonus compensation for assets held
in the following types of client accounts:
• Employer-sponsored retirement plans (“Plans”) (including deferred
or immediate annuities, and brokerage window accounts)
• Discretionary managed accounts
• Individual retirement accounts administered by TIAA (including
brokerage window accounts)
• Funds that have been annuitized in exchange for a life-time income
stream and
• After-tax annuities
Assets associated with direct held mutual funds, banking, taxable
self-directed brokerage, life insurance, long-term care insurance, or
products are not included in the book award. When calculating
a WMA’s Book Award, an allowance is made for a certain amount of
expected retail outflows.
WMAs will only receive Book Award credit for clients who have been
“activated” by any of the following: i) transferring at least of
new assets within the last months (starting January ) to
TIAA based on a recommendation or referral from a TIAA advisor (the
transfer can be to a Plan or a non-Plan product and includes new assets
resulting from referrals to TIAA Trust) ii) fully implementing investment
advice provided by TC Services within the last twenty-four months;
iii)enrollment in RPPM or holding assets in TIAA RetirePlus; or iv) owning
a discretionary managed account
These activation triggers create
conflicts because WMAs and TC Services have an incentive for you to
enroll in managed accounts, RPPM and RetirePlus, to fully implement
Generally limited to accounts in the Portfolio Advisor or Private Asset Management Programs.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 22
investment advice and to transfer new assets to TIAA. The Book Award
also creates a conflict as WMAs are rewarded for the growth and
retention of client assets at TC Services. WMAs and TC Services are
equally incented, through the activation triggers, to implement in-plan
investment allocation advice as they are for a client’s adoption of advisory
services in Plan such as RPPM and RetirePlus. TIAA receives ongoing
compensation for a client’s participation in RPPM and RetirePlus. WMAs
generally receive the greatest percentage of their bonus compensation for
the Book Award.
Sales into Client Accounts: TIAA also bases variable bonus compensation
onthe volume of advisor sales into TIAA (“Sales”) Advisors are only
compensated when the source of the funds is external to TIAA, except
that Advisors are compensated when funds held in a self-directed taxable
brokerage account are invested into another account at TC Services. All
WMAs are paid the same for Sales into Plan and non-Plan products and
services. The WMA’s compensation does not vary based on the account
type or product. Sales associated with banking, annuitization/life-time
income, self-directed taxable brokerage assets and products are not
included in the Sales computation.
The Book Award and Sales metrics create conflicts of interest because
they give WMAs an incentive to recommend that clients transfer external
assets into products, services and accounts at TIAA and an incentive
to recommend that clients retain assets at TIAA. WMAs also have an
incentive to recommend that clients transfer in and maintain assets in
taxable managed accounts over self-directed taxable brokerage accounts.
Goals: In addition to the Book Award and Sales, WMAs also receive
variable compensation based on quantitative metrics related to financial
results as well as behavior-based qualitative metrics.
The financial results measures include credit for gathering client assets
in appropriate TIAA Solutions and rewards WMAs for successful sales
equally regardless of the type of TIAA Solution. The behavior-based
measures consist of subjective assessments that consider customer
satisfaction based on client survey results and adherence with TIAA
values. Behavior-based measures (including customer satisfaction
based on survey results and adherence with TIAA values) account for
approximately of overall bonus compensation.
Bonus Award relative to Total Compensation: While salariesare set
according to schedules, the size of a WMA’s bonus compensation is not
limited, and the percentage of a WMA’s compensation represented by the
variable bonus can be and is often significantly higher than the salary portion
of compensation. On average, a WMA’s bonus ranges from approximately
to of their total compensation with more senior WMAs receiving
the most. Moreover, WMAs receive differentiated compensation for their
book award based on the advisors’ role, with Executive and Vice President
WMAs generally receiving greatercompensation.
The size of the variable bonus, relative to the salary paid to WMAs,
depends on how successful the WMA is in gathering and retaining client
assets in products and services at TIAA. The percentage of a WMA’s
compensation represented by the variable bonus component typically
increases with the seniority of the WMA with the most successful
WMAs advancing to more senior roles. The portion of the variable bonus
attributed to the WMA’s compensation typically differs in magnitude
as follows.
• Executive WMAs are estimated to earn a significant majority
of their compensation through the variable bonus as compared
withsalary.
• Vice President WMAs typically earn a majority of their
compensation through the variable bonus as compared with salary.
• WMAs typically earn slightly less than half of their compensation
through the variable bonus and half through salary.
If you are not sure of your WMA’s title or role, or impact of the bonus
on the WMA’s total compensation, please contact your WMA for
moreinformation.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 23
Managers of Financial Professionals
Role. Managers are responsible for the oversight and
management of an assigned group of Financial Professionals.
This includes, among other things, helping to ensure the delivery
of high-quality service to customers and the performance of supervisory
functions for compliance with applicable rules and regulations. They may
also hire, counsel and motivate their assigned professionals and help ensure
Financial Professionals are utilizing the range of Solutions available to them
in order to meet client needs.
Bonus compensation. Managers of all of the Financial
Professionals described above are compensated based on
qualitative and quantitative metrics such as the performance
(financial and otherwise) of the Financial Professionals they
supervise. This compensation arrangement creates a conflict of interest
by incentivizing managers to encourage their supervised persons to
gather, retain and consolidate client assets in products and services at
TIAA. We address this conflict by disclosing it to you and by supervising
the supervisors.
Additional compensation from third parties
We and our affiliates may receive additional compensation from third
parties and our affiliates, including investment sponsors, such as gifts
and awards, a dinner or ticket to a sporting event, or reimbursement in
connection with educational meetings, marketing or advertising initiatives,
including services for identifying prospective clients. Investment sponsors
also may pay or reimburse us for the costs associated with education
or training events that are attended by our Financial Professionals and
for TIAA- and affiliate-sponsored conferences and events. We also may
receive reimbursement from product sponsors for technology-related
costs such as those to build systems, tools and new features to aid in
servicing clients. The amount of these payments is not dependent on or
related to the amount clients invest with the investment sponsor.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 24
Other services
Outside of the Solutions described above, we also provide
services directly and through various affiliates that are
separate from our broker-dealer services.
Our investment advisory services
We also offer the following investment advisory services as a registered
investment adviser through TC Services’ Advice & Planning Services
division (“APS”) These services are separate and apart from the
broker-dealer services described above.
Financial planning services
Financial planning services are delivered by our WMAs and certain
Advisory Consultants as investment advisor representatives of APS.
WMAs and Advisory Consultants also provide the broker-dealer
services described in this document as registered representatives of
TC Services. We do not monitor your financial plan and do not provide
investment Recommendations. For more information about our financial
planning services, see TIAA.org/public/pdf/tc_adv_program.pdf
for a copy of the APS disclosure brochure.
Managed account solutions
TC Services currently offers wrap-fee managed account programs. WMAs
and Advisory Consultants may recommend that you enroll, contribute
and consolidate assets in either a wrap fee program sponsoredby APS,
or a managed account program offered by its affiliated, TIAATrust. When
they make such Recommendations or provide services to you for managed
accounts, they are acting as investment advisor representatives of APS.
Investment management services
through TIAA Trust
Our affiliate TIAA Trust separately offers investment management
services under its trust powers. WMAs recommend these managed
account services in their capacity as investment advisor representatives.
TIAA Trust also provides trust and estate settlement services. WMAs
may refer you to TIAA Trust for these services. TIAA Trust may serve as
a trustee or co-trustee on both revocable trusts and irrevocable trusts.
TIAA Trust can also serve as executor of decedents’ estates. Applicable
fee schedules are provided at account opening.
Referrals to third parties and TIAA affiliates
Our Financial Professionals can refer you to EverBank for bank deposit
products and those Financial Professionals and TC Services are
compensated for successful referrals. If you have a quarterly rebalancing
service offered by TIAA Trust available in your Plan, our Financial
Professionals can also refer you to TIAA Trust for this service. TC Services
and our affiliates are compensated when clients enroll in this service.
Our Financial Professionals can also refer you to other TIAA affiliates to
address needs such as saving for education ( plans) and charitable
giving. Note that we serve as the distributor for certain state-issued
tuition savings plans. These referrals create a conflict of interest
because TC Services and its Financial Professionals are compensated for
successful referrals.
Fixed annuities and life insurance
We offer non-securities products such as fixed annuity products. We
no longer offer or sell life insurance through a third-party life insurance
carrier. However, we may refer you to a non-affiliated third party, Crump
Life Insurance Services (“Crump”) to evaluate what products might
meet your life insurance needs. If such referrals result in a sale by Crump,
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 25
Crump will pay a referral payment to TIAA-CREF Insurance Agency, LLC
which in turn pays TC Services. Referrals of customers to Crump for life
insurance that were identified by Financial Professionals are considered
when determining the discretionary bonuses of the Financial Professionals,
however, no referral fees are paid to any Financial Professionals for
customer referrals to Crump. Therefore, TC Services and its Financial
Professionals have a conflict of interest when customers are referred to
Crump as TIAA or its affiliates and TC Services Financial Professionals
willbe compensated for issued policies resulting from a referral.
TIAA-CREF Individual & Institutional Services, LLC (“TC Services”)
FINRA Member, distributes securities products. Annuity contracts and
certificates are issued by Teachers Insurance and Annuity Association
of America (TIAA) and College Retirement Equities Fund (CREF)
NewYork, NY. Each is solely responsible for its own financial condition
andcontractual obligations.
REGULATION BEST INTEREST DISCLOSURE JULY 31, 2024 26
