How Not To Respond To A Scandal - TIAA Edition

A recent bombshell article about certain business practices at TIAA was published by the New York Times last weekend, the response from TIAA was...Trumpian.

Yesterday (Monday) I received a mass e-mail message from Ron Pressman, the CEO of Institutional Financial Services at TIAA (why not from the CEO of TIAA, Roger Ferguson?) and it was not good.

I'll republish below, but a few items I'd like to point out that disturbed me.

The first four paragraphs boast about how great TIAA is and that they always "put their clients first," which we learned from the article, with verifiable evidence is not exactly true. These paragraphs do not address the article at all other than to completely dismiss the claims as "mischaracterizations"...what? It's literally four paragraphs of bragging, much of which are also debatable claims ("I would put our investment performance, fees and service delivery up against any other financial services company.").

Then in paragraph five, providing no proof at all Pressman states:


The bottom line is that participants in TIAA administered plans have more confidence, more monthly income and the highest average account balances. And that’s why TIAA exists – to help the millions of people we serve achieve lifetime financial security.

There is no evidence provided to support this claim.

As if that wasn't enough (five paragraphs of boasting without evidence to back that boasting) Pressman then writes the most absurd paragraph:

By misrepresenting facts, taking comments out of context, and making apples-to-oranges comparisons, the article presents a misleading portrait of who we are as an organization and our commitment to putting our clients first.

Let's be clear here, the story provided a lot of evidence to support the claims made. Yet, at no point in this paragraph or the rest of the e-mail does Pressman even attempt to identify a false claim and provide evidence to contradict it. It's the "I'm not a puppet, your the puppet" response. It's literally the "it's fake news" response.

If the New York Times printed something that is incorrect or misleading, identify that claim, provide evidence to counter it and demonstrate beyond a reasonable doubt that the claim is wrong. Pressman does none of this and doesn't even promise that a such a response is forthcoming. In fact, if you do want "context" you are request to reach out to them.

I don't believe what was reported in the Times article is equivalent to the Wells Fargo or Equifax problems, but so far the response is just as bad. TIAA is tone deaf here and if they don't take this seriously, it will be costly to them.

TIAA used to be the "good guy" in the insurance industry, when did they turn into the same thing they used to despise? I expected and expect better from TIAA, a company in which I've worked with for over twenty years.

Ron Pressman, your customers deserve better.

Scott Dauenhauer, CFP, MPAS, AIF

TIAA E-Mail From Ron Pressman:

TIAA was created with a mission to serve, and we have always run our organization on a foundation of strong values, ethical behaviors and integrity. Therefore, it was incredibly disappointing and concerning to read a very misleading article about TIAA that you may have seen in The New York Times recently. We fundamentally disagree with how the article characterizes TIAA and the way we operate our company and address your financial needs.

As I hope you have experienced, TIAA is a different kind of financial services organization. The long-term goals of our institutional clients and their employees have been our primary focus for nearly a century. We are not publicly traded, and therefore not subject to short-term shareholder interests. We put our clients first, and operate in a highly transparent and ethical way.

We are not an organization that is particularly boastful, but I am proud of what we have been able to deliver for you and your employees. I would put our investment performance, fees and service delivery up against any other financial services company. The outcomes speak volumes. Through TIAA Traditional, we’ve paid more than the guaranteed payouts to our fixed annuity holders every year for more than half a century. We’ve paid $394 billion in benefits to retired participants since 1918. In fact, since our founding, our retired participants have never missed a payout from us – through depressions, wars, and natural disasters.

The bottom line is that participants in TIAA administered plans have more confidence, more monthly income and the highest average account balances. And that’s why TIAA exists – to help the millions of people we serve achieve lifetime financial security.

By misrepresenting facts, taking comments out of context, and making apples-to-oranges comparisons, the article presents a misleading portrait of who we are as an organization and our commitment to putting our clients first.

We fully believe that our trusted reputation and track record will enable us to quickly move past this unfortunate article, and we remain committed to our core mission and to working every day to serve the interests of your institution and your employees.

Please feel free to reach out to your TIAA representative or me if you have any questions or want additional context regarding points made in the article.

Ron

Ron Pressman

CEO, Institutional Financial Services

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