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Rating:TIAA-CREF Marshals a DC I-O Invasion Force Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, December 06, 2013

TIAA-CREF Marshals a DC I-O Invasion Force

Reported by Tommy Fernandez

Ask someone about TIAA-CREF and you'll probably get a vague response that has something to do with professorial pension plans-- and probably little else

"Brand awareness -- that is biggest challenge with us. When you say TIAA-CREF, people respond 'Oh, you manage money for university and teacher pensions and that is just about all they know,'" said John Panagakis, Head of Asset Management Business Development for TIAA-CREF.

Breaking through that ignorance is the job of Panagakis and Tony Carmenate, Head of Intermediary Distribution.

In particular, both executives are in charge of marshaling TIAA-CREF's invasion force into the non-academic, DC I-O (that's defined contribution investment-only) side of the retirement plan business.

"We have been expanding onto other retail record-keeping platform systems. Focusing on DC I-O, on gatekeepers various complexes, TAMPS, retirement systems as well as consultants and analysts. We are making more of our platform about third party distribution," Panagakis said.

TIAA-CREF currently has a team focused on consultants, which has now grown to six people. On the institutional side, they have three individuals dedicated specifically to mutual fund distribution, speaking directly to institutional investors. They also have six wholesalers, three national accounts folk and three individuals on a sales desk in Charlotte, N.C.

Panagakis says that the firm will be expanding the sales teams next year, targeting personnel growth at around 20 percent. He said that most of that growth will be directed towards Carmenate's channel, with more hires in terms of national accounts folk.

This DC I-O invasion force has been nearly three years in the making, and Panagakis says that the firm will continue to grow the team gradually.

About three years in, you want to make sure you have the appropriate agreements in place. You want to have the appropriate relationships established. It is about building a strong foundation and then building the distribution around that strong foundation, rather than just hiring 50 people when don't have any foundation.

An important part of the strategy has been the introduction of new share classes, Panagakis said.

"The reality was that the only fund class available on our platform was the retail share class. In the past, that limited who we could partner with and what we could do. We recognized that and address that making three other share classes available," he said. "Without that full menu, it is harder to penetrate."

The new classes include a zero fee institutional class and two other share classes that run from 15 to 25 basis points.

Carmenate says that the major step in the plan has been expanding the selling agreements.

"We have stepped out much more vocally in the marketplace. We are on 90 percent of all of the retirement platforms, the big four retail platforms. We are selectively looking at partnerships with certain banks and wirehouses," he said.

They will continue to talk directly to U.S. plan sponsors regarding their mutual fund offerings. Target date funds will be a big push for them in this area. Meanwhile, on the institutional side, the firm will continue its global expansion to Europe.

"We are targeting in the DC space advisors, consultants and direct plans sponsors. That is the initial strategy. To cover all three, building awareness that TIAA-CREF is available, that the target date series are available. A lot of people don't even know that you can access TIAA-CREF on their platform," said Panagakis. "We have built specific campaigns around our target dates. We are working closely with the investment community to build awareness." 

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