TIAA launches robo-adviser with access to SRI funds

Digital tool to include environmental, social and governance screens

Jun 6, 2017 @ 7:00 am

By Liz Skinner

TIAA introduced a robo-advice offering on Tuesday that includes a broader range of investment choices than most other digital advice platforms.

The 100-year-old firm, with $938 billion in assets under management, is most known for providing retirement plans for academics. Through its new automated platform, it is offering clients access to active, passive and socially responsible mutual funds and exchange traded funds. Within the three types of investment options, each includes five different risk levels from conservative to aggressive.

"We are expanding the reach of our personalized financial support to more people, including younger generations, and those who value working with a mission-based organization," said Kathie Andrade, chief executive officer of TIAA's retail financial services business.

(More: Millennials design the financial service that would get them to invest)

The platform from TIAA is the first from a major provider to give investors an opportunity to choose investments that line up with environmental, social and governance beliefs. Several startup firms offer digital advice that incorporates ESG.

This kind of impact investing is especially popular with younger investors and women, according to multiple surveys.

TIAA's Personal Portfolio is aimed at anyone who prefers a digital experience, Ms. Andrade said. The firm's robo-clients also can receive live financial advice from a call center manned by about 100 financial advisers, she said.

Investors must have a minimum of $5,000 to open an account, which will cost 30 basis points a year based on AUM.

(More: Communication is key to robo-advisers' plans to keep their clients on track in a downturn)

Robo-advice platforms have captured more than $100 billion in client assets since they were introduced beginning around 2011. Robos and mostly digital advice firms are expected to reach about $385 billion by the end of 2021, according to Cerulli Associates.


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