Citing an unexpected number of small, dormant accounts among its investors, TIAA-CREF announced today that it will substantially increase the minimum investments consumers put forward when they open regular mutual fund accounts.
The company said it has opened too many accounts containing relatively small amounts of assets since it began offering mutual funds four years ago. Those small accounts, which also typically see little activity, have become too expensive to cost-effectively manage, say TIAA-CREF officials.
So the firm will increase minimums on its accounts for investors who sign on with the firm after Nov. 1. Minimums for regular mutual fund accounts will increase from $250 to $1,500. In addition, investors making subsequent purchases will have to shell out at least $50, twice the current amount. Other products, such as IRAs, Automatic Investment Plans, as well as Uniform Gift and Uniform Transfer accounts, will also see increased minimums.
Those who opened TIAA-CREF accounts before Nov. 1 will not be affected by the changes.