TIAA Investments Overview
Although TIAA is not well-known for its brokerage operation, the company nevertheless does provide
several investment services worth considering. Let’s check them out.
TIAA Brokerage Pros
- Wealth management: With branch locations to boot.
- Good pricing: $0 commissions on some trades.
- Full suite of financial services: More than just a broker.
TIAA Brokerage Cons
- Robo service is now closed: As of May 2020.
- Weak customer service: Some resources are missing.
- Software is undeveloped: Some self-directed trading tools are completely absent.
TIAA Brokerage Commissions
| Investments | Commissions |
|---|
| Stocks and ETFs online transactions | $0 |
| Stocks and ETFs Automated Telephone System (ATS) | $35 |
| Stocks and ETFs broker assisted | $55 |
| Stocks and ETFs foreign securities | $75 for each order (not applicable to American Depositary Receipts) + commission |
| Options | $0 |
| U.S. Treasury Securities new issues (at auction) | $50 per transaction |
| U.S. Treasury Securities existing issues | $1 per $1,000 face amount, $50 minimum |
| Municipal bonds, government agency bonds, unlisted (over-the-counter, or OTC) corporate bonds and mortgage-backed securities | $50 + $2 per bond |
| Mutual funds No-transaction-fee (NTF) funds |
Short-term redemptions fee: $50 minimum for shares held less than six months
|
| Mutual funds transaction-fee (TF) funds | $50 |
| TIAA minimum deposit to open account | $0 for cash account, and $2,000 for margin account |
| Fees | TIAA fees |
Investment Lineup
The brokerage arm of TIAA offers self-directed trading in mutual funds, closed-end funds, exchange-traded funds, stocks, options, and fixed-income vehicles, including a selection of CDs. All other assets, including cryptocurrencies and foreign stocks, are unavailable.
Some securities can be sold but not purchased. These include privately-held securities, restricted shares, assets with a market price below $1, and non-permitted Cannabis Related Business (CRB) securities.
What is available, though, is a very extensive investment-advisory service. This is an old-school
program with human advisors at branch locations.
TIAA does not have a robo service, at least not for
individual investors. There is something called TIAA RetirePlus®, which is an automated investment
service, although it’s only available through an employer. Likewise, TIAA offers annuities, although
these are only available through a workplace setting.
As for account types, TIAA does have a large suite of choices. These include IRAs, custodial accounts, individual and joint accounts, trusts, 529 plans, health savings accounts (HSAs), and estate accounts.
Customer Service
Self-directed and advisory clients can reach a TIAA associate over the phone during the week from 8 o’clock in the morning until 7 o’clock in the evening, Eastern Standard Time. Unfortunately, this customer service unit is closed on the weekend. There are other departments, such as desks for new accounts and trusts, that are open slightly different hours, although they are all weekday as well.
The TIAA website has a chat widget in human format but not in robo mode. It can be found under the Alerts tab in the very top of the site. There is no internal messaging on the site, although the mobile app does have it (look for it at the top of the Home screen). There is a search wizard available on both platforms to find local TIAA offices. These can be used by advisory clients for help on all sorts of issues.
TIAA’s website does have a decent self-help section. It can be found by clicking on the Profile tab in the top-right corner. Available tasks include security preferences, beneficiaries, communication choices, trusted contacts, and more.
Cash Management
A brokerage account with TIAA comes with no bank tools at all, other than a simple ACH transfer on the website and mobile app. However, TIAA operates a bank with FDIC insurance, and these deposit accounts are automatically linked to a TIAA investment account opened with the same tax ID number. A single login is all that is required to access these financial accounts.
Bank accounts that TIAA offers include checking, savings, money market, and CDs. Various perks include Zelle transfers, a Visa debit card, and ATM fee reimbursements. Bank accounts with TIAA pay interest, although there are minimum deposit requirements to get started.
Advisory Program
Self-directed trading is only one part of TIAA’s investment lineup. The company has an extensive
program of financial advice that covers not just investment decisions but also major life events. The
service is called Guided Advisory Services and offers help on such issues as:
- Buying a house
- Paying for college
- Investing beyond a retirement plan
- Planning for income in retirement
- Providing a legacy for family
- Getting married
To help customers who sign up for an investment-advisory package, TIAA manages a large network of brick-and-mortar offices. There are more than 100 locations scattered throughout most states. An appointment is typically required.
As already mentioned, the company’s advisory service is all old-school with no automated option.
Pricing
Offering a service is only half the battle. Now we must look at what these services actually cost. Self-directed accounts pay no ongoing fees of any kind. There is also no minimum deposit requirement to open one.
For online trades of stocks, ETFs, and options, there is no commission. Options have no per-contract fees, either, which is a great deal. Placing a trade through the broker’s automated phone system has a base charge of $35, and option trades cost $2 per contract.
Besides the robo phone service, there’s also an old-school phone service with actual human stock brokers. Placing a trade through this channel costs $55 (options are $2.50 per contract).
Orders to sell shares that are priced below $1 must be placed with a human stock broker, although TIAA charges the online rate for these trades.
Trades of U.S. Treasury securities on the primary market cost $50 per transaction, which is very expensive. Trades of other fixed-income securities carry varying fees (usually, there’s a $50 minimum).
Mutual funds with a transaction fee cost $50 per trade ($35 for some wealth management customers). There are some funds without transaction fees. The minimum initial investment with any type of fund is always $500 or more.
The company’s traditional advisory service has a variety of packages. Here’s the tiered pricing schedule for one of them:
Account Value: Annual Fee
First $150,000: 1.15%
Next $150,001 - $300,000: 1.00%
Next $300,001 - $750,000: 0.85%
Next $750,001 - $1,000,000: 0.75%
Next $1,000,001 - $1,500,000: 0.70%
Next $1,500,001 - $3,000,000: 0.65%
Next $3,000,001 - $4,000,000: 0.60%
Next $4,000,001 - $5,000,000: 0.50%
Over $5,000,000: 0.40%
You can compare these rates to what the best priced
financial advisors in your area charge.
Website
For trading and account management, TIAA offers a simple but effective website. A security’s profile has alert and watchlist buttons for those functions. Multiple watchlists can be created and edited. Alerts can be delivered to an email address or cell phone. Available triggers include:
- Volume rises above
- Reuters news story
- 52-week high or low
- Technical events
- And more
Although the chart on a security’s home page is rather simple, moving to the charting tab generates an interactive chart. There are 5 plot styles and 13 technical indicators. Only 2 company events are available (dividends and splits). Only 10 years of price data can be shown on the interactive graph. Moreover, it is not possible to expand the graph or blow it up the full width of the computer screen.
TIAA’s web-based trade ticket has just 4 order types. Besides the standard market and limit orders, TIAA offers stop and stop-limit. Fill or kill and immediate or cancel are duration choices. Real-time price data is shown on the trade ticket, and this can be refreshed.
An asset’s profile will have option chains if the product has options trading on it. Only calls and puts are available, however. There are no pre-installed strategies. On the upside, real-time data from the OPRA exchange is displayed, along with volume and open interest.
The one final resource on the website worth pointing out is a trade bar. It sits at the bottom of the monitor inconspicuously. Entering a ticker symbol generates real-time data on various points such as volume and bid-ask spread. An “Invest” selector has a trade button.
Mobile App
The TIAA mobile app (make sure it’s the brokerage app and not the banking app) has a minimal amount of trading resources on it, and we do emphasize minimal. A stock’s profile has a very simple graph with no tools of any kind, and this chart cannot be displayed horizontally. There are quote details, such as market cap and average volume, but that’s the end of the story here.
Buy and sell buttons appear at the top of a profile, and these will produce a basic order ticket with the same order types we saw on the website.
The app does have details on the three major U.S. indexes (Dow, Nasdaq, and S&P 500). A magnifying glass in the top-right corner can look for securities by ticker symbol or company name. Statements can be accessed through the app as well. iPhone users have Touch ID and information through Siri.
There is a widget to transfer funds via ACH, although unfortunately, there is no mobile check deposit tool.
Other Trading Tools
The TIAA website does not have a browser platform. There is no desktop program, either. The brokerage firm does offer a platform for Apple Watch. It displays account balances and positions.
Education
Clients of TIAA will find a lot of educational materials on the broker’s website (not the mobile app) under the Resources tab. During our investigation, we found the following categories:
- Insights & analysis
- News & research
- Retirement investments
- Stocks
- Mutual funds
- ETFs
- Fixed income investments
- Education
- Retirement planning basics
- Changing jobs
- Investing 101
- Life's big events
- Personal finance 101
- Retirement & beyond
- Life milestones
- Prepare for the unexpected
- On demand webinars (external site)
- Retirement consultations & seminars
- TIAA Safe Estate
- Tax Center
- Retirement calculators & financial tools
Obviously, there’s a lot of stuff here. Some of the articles are rather short, but some go into a pretty good amount of detail. Both HTML and pdf documents are available. Some of the pdf documents are fillable worksheets, which creates an interactive experience.
There are also videos underneath the Resources tab. These are fairly short but may be worth taking a look at. On the news & research section, we found just five articles of commentary.
Security Research
On the website, stock and ETF profiles have a decent amount of information on them. We do emphasize “on the website” because the mobile app has almost nothing. Here’s a list of details securities may have:
- Morningstar Rating
- Net Expense
- Ratio
- Average Volume (10 day)
- Gross Expense
- Ratio
- Total Holdings
- Dividend Frequency
- Historical Performance Returns
- Portfolio Composition
- Price/Cash Flow
- Top 10 Holdings
These profiles have links to security reports in pdf format (with price targets) from Argus. Screeners for securities can be accessed by clicking on the relevant tile (such as stocks or mutual funds) on the Resources page discussed in the previous section.
Other Services
Fractional Shares: Only whole shares of stocks and ETFs can be traded.
IRAs: Traditional, Roth, Inherited, SEP, and SIMPLE IRAs are available at TIAA. A Qualified Retirement Plan can be rolled over into an IRA. The part we don’t like is the broker’s $130 IRA closeout fee.
Periodic Mutual Fund Investing: TIAA has it.
IPO Service: TIAA does not have it.
Extended-hours Trading: Only the regular day session is available.
Recommendations
Beginners: TIAA’s investment-advisory service is a good launching point for novices.
Mutual Fund Trading: With TIAA’s fund screener, we found 5,469 mutual funds open to new
investors. While this is a decent number, there is no way to search by transaction fee status or load
status. We suggest Firstrade instead. The brokerage house has over 16,000 funds with a better fund screener.
Small Accounts: A self-directed account with TIAA has no minimum, although an IRA will have the
closeout fee already mentioned. For IRAs, we would suggest
TD Ameritrade, who has no termination fee.
ETF & Stock Trading: Without adequate trading software, we can’t defend TIAA here. Active
equity traders will be better off with
Webull.
Long-Term Investors and Retirement Savers: Although we don’t care for TIAA’s IRA termination
fee, an IRA with the company’s wealth management service would be a good choice.
TIAA Investments Review Summary
TIAA has a decent brokerage service. It particularly excels in the financial-planning category but
underwhelms in many areas of self-directed trading.
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Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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