Thinking aloud

I hate obfuscation. This week, TIAA-CREF sent my wife the letter I’ve attached to this post as a PDF. It’s unsigned, unaddressed and clearly written by an attorney…but the marketing guys got into the act as well.

The letter is a notice of a price increase….but it never says TIAA-CREF is raising prices. It only says that “estimated expenses will increase by eight to ten basis points.”

Check out this copy:

The revised estimated expenses also reflect costs unanticipated at the time of the original estimate in the prospectuses, including expenses associated with operating two platforms to serve institutional retirement plans pending completion of plan conversions to the new platform and costs associated with processing delays and delays in realizing anticipated savings.

In other words, we have to raise prices because we have duplicate computer systems, neither of which serve you, the individual investor. We screwed up merging them, and not only didn’t we save the money we thought we would, we have to spend more. You get to pay for it. 

OK, I get it. This wealthy company, ostensibly dedicated to teachers, professors, nurses and other non-profit employees and hiding behind noble ideas like serving the ”greater good” and leveraging “the power of .org,” can’t simply say “we’re raising prices.”

Instead we get a long, apologetic argument about better service to “institutional clients,” (sales) visits to campuses, and a quote from Forbes backing up that when you call these people, they’re happy to sell you more overpriced investments. We also get some nice footnotes where the name should be of a human being taking responsibility for the price increase.

(I didn’t attach the expense ratios, but ranging from .48% to .905%, I hope many of the company’s customers will realize that there are far less expensive options available.)

A song that’s in high rotation on my iPod these days is the lovely duet Please Read the Letter from the unlikely pairing of Robert Plant and Alison Krauss (yes, I know: heavy metal and bluegrass…who’d have thunk it? Go ahead and blow 89 cents on the song. You’ll love it).

TIAA-CREF’s marketing and legal people should listen carefully to some of the song’s lyrics:

…A fool could read the signs
Maybe baby
You’d better check between the lines
Please read the letter,
I wrote it in my sleep
With help and consultation from
The angels of the deep…

 TIAA-CREF to customers: please read the letter (if you can): Download (426)