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Anil Vazirani Scottsdale Investment Advisor shares TIAA-CREF Fined $97 Million for Conflict of Interest Violations

August 17, 2021Financial Advisor Scottsdale AzRetirement Planning Scottsdale

Anil Vazirani Scottsdale Investment Advisor shares TIAA-CREF Fined $97 Million for Conflict of Interest Violations 

TIAA-CREF Fined $97 Million for Conflict of Interest Violations 

 You may remember my newsletter a few years ago titled: Northwestern Mutual (NWM) Admits  to Material Conflicts of Interest. If you didn’t download the 8-page piece documenting the massive  conflict of interest problems NWM advisors have, click on the following link: 

https://advisorshare.com/conflicts-of-interest 

 I don’t think the TIAA-CREF conflicts are as bad as NWM, but neither company seems to care  about what’s really best for the clients. 

 To download the 17-page TIAA Cease and Desist Order from the SEC, click on the following: https://advisorshare.com/conflicts-of-interest 

 Factual Summary—TIAA (Teachers Insurance and Annuity Association)-CREF (hereinafter  “TC”) is a broker dealer and registered investment advisor. TC has a large retirement plan services arm  that, as the name insinuates, administers many school system pension plans. 

 TC was not happy about the fact that they were not getting enough of the rollover  money when clients retired and rolled their money to an IRA. So, TC instituted what the SEC determined  was a deceitful practice to incentivize TC advisors to get more of that money. 

 As the SEC indicated, TC trained advisors when talking with clients about rollovers to “discover  areas of vulnerabilities” (called “pain points”) to help clients “self-realize” their financial vulnerabilities,  and as part of the self-realization process get the client to conclude that putting their money into  a specific TC investment account is best. 

 The problem is that this self-realization process was misleading. And the accounts TC wanted to  put clients in were much more profitable for TC than other potentially more suitable accounts. 

 TC advisors touted that they were “fiduciaries” giving “objective” and “non-commissioned”  advice. The SEC concluded that TC advisors did NOT act as fiduciaries (quite the opposite), that they  were not objective because they were trying to push rollover money into higher profit investments for TC  and the advisors. 

 Threats of termination—to make sure advisors pushed clients into the more expensive  portfolios, TC threatened to fire advisors who didn’t accomplish this goal. 

 TC offered financial incentive for advisors to push expensive portfolios 

 Internal compliance audit—TC’s compliance department did an internal audit and came to the  conclusion that “it is not possible to claim that the agents are ‘product neutral.’” But after the audit,  nothing changed. 

 It worked—TC opened 18,000 new portfolios and went from $2.6 to $54 million in assets in their  more expensive portfolios. 

 Summary 

 TC not only wanted to keep more of the rollover money coming out of the pension plans they  administered, they wanted the money to go into expensive portfolios. To accomplish this goal they taught  advisors how to manipulate clients with misleading statements about being objective fiduciaries who  were looking out for the clients’ best interest. 

 At least NWM discloses to clients their built-in biases to funnel money to products that may not  be in the client’s best interest and make the advisor more money. In TC’s case the lack of disclosure of  these conflicts of interest sunk them with the SEC and generated a fine of $97 million.

 In short, TC’s actions are everything that is wrong with the industry today and if you ever have  to compete against TC when trying to pick up a client, you can pull out the 17-page SEC document to  show the potential client this history TC has of giving advice to clients that is NOT in their best interest. 

Roccy DeFrancesco, JD, CAPP, CMP 

Founder, The Wealth Preservation Institute 

Co-Founder, The Asset Protection Society 

269-216-9978 

https://wealthpreservationinstitute.net

Read More: TIAA-CREF Cease & Desist Order – 7 13 21

Anil Vazirani is president of Secured Financial Solutions, independent insurance advisor investment advisor rep with a fiduciary obligation and in the financial services industry since 1994. A+ rating with the Better Business Bureau for over a decade and a half, members in good standing with the National Association of Insurance and Financial Advisors.

Dial 1-800-957-5604 x 200 and set up a complimentary strategy session to understand what your goals are, understand what objective you’re trying to accomplish, your risk tolerance, and let us show you how to reduce your investment fees from stocks, bonds and mutual funds down to one point, or five percent when you work with our investment advisory platform. Dial 1-800-957-5604 x 200, and on the web at: DreamRetire.com

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Tags: Conflict of Interest Violation, IRA, SEC, TIAA-CREF

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