Charles Schwab recently announced the completion of its asset acquisition of USAA Investment Management Company. This major deal between two of the biggest names in banking and investments raises important questions for USAA members and Charles Schwab customers.
This article provides key details on the acquisition, outlines what it means for your USAA and Schwab accounts, and gives guidance on next steps. Keep reading to understand this investment management news and how you can take control to optimize your finances.
What Did Charles Schwab Acquire From USAA?
On July 1st, 2022, Charles Schwab formally completed its acquisition of USAA Investment Management Company. This includes over $135 billion of brokerage and managed assets.
Specifically, Schwab acquired the following from USAA:
- USAA’s wealth management and investment brokerage services
- Brokerage accounts
- Managed portfolio accounts
This spans assets like mutual funds, ETFs, and fixed income investments that were previously managed by USAA Investment Management.
The purchase consolidates over 1 million USAA brokerage accounts into Charles Schwab’s ecosystem. It represents a major expansion for Schwab and a partial exit for USAA from direct investment services management.
Why Did Charles Schwab Buy USAA Investment Assets?
For Charles Schwab, acquiring USAA investment accounts directly aligns with its long-term growth strategy. This includes:
- Adding more total client assets under management
- Expanding market share in wealth management
- Acquiring brokerage account assets while the market is red hot
- Cross-selling additional products to USAA members
- Providing comprehensive investment services to USAA customers after USAA refocused efforts on insurance
For USAA, the deal allows them to focus more narrowly on insurance and banking services for military members, while still giving members access to investment accounts through Schwab.
The transaction is a win-win: Charles Schwab gets more assets and clients to grow its leading independent brokerage, while USAA gains a strong partner to provide investing options.
What Does It Mean For Your USAA Accounts?
If you’re a USAA member with brokerage, managed portfolio balances, or mutual fund investments, your accounts have moved under management by Charles Schwab through this transfer.
Key things to know:
- Your login credentials stay the same—you can still access accounts on USAA.com or the USAA mobile app
- Underlying account numbers are unchanged
- Historical transaction data remains available
- You can expect the same level of customer service and user experience
- Ongoing management and advisory services continue uninterrupted
Over a transition period, you will have access to integrated pages on USAA.com to easily link and view Schwab account balances and holdings alongside your other USAA accounts.
Longer term in 2023, USAA investment accounts will require an additional logon directly on Schwab.com to access in depth analysis. But core access remains on USAA platforms.
Rest assured your assets are safe, accessible, and being managed with the same care by Charles Schwab personnel.
How Does It Affect Charles Schwab Customers?
For existing Schwab retail and investing clients, it’s mostly business as usual after this USAA investment management acquisition.
The main changes you will notice include:
- More cash influx now managed by Schwab from USAA accounts
- Expanded account offerings that consolidate investment management
- Potential futureCross-sell opportunities for additional Schwab investment products
- Possible enhancement of Schwab’s mobile app over time
While this purchase does not fundamentally change Charles Schwab’s award-winning trading platforms, rates, or service, the influx of USAA accounts provides customer growth capital to invest further in the platforms you use.
What Steps Should You Take Now?
We recommend all USAA investment account holders take the following steps to understand the transition and optimize your accounts under Charles Schwab:
- Deeply research Charles Schwab products and services yourself if you are not familiar. Understand their capabilities as your new broker and investment manager.
- Consider linking Schwab & USAA accounts early in 2023 when available. Consolidated visibility provides major convenience.
- Review account investment strategies & allocations. Make any changes for your goals.
- Examine new Schwab account fee structures. Compare old USAA and new Charles Schwab pricing to find wins.
- Transfer any external investment assets to Schwab ASAP while change is happening. Consolidate holdings for easier tracking.
- Fund your HSA investment account if applicable. Schwab offers excellent HSA investment options to grow tax-free health savings.
While Charles Schwab inherits USAA’s customer service commitments in this handover, you should still take ownership to understand the changes and optimize your personal finances.
View this investment management transfer as a fresh chance to reorganize your holdings with a leading brokerage that’s now managing your nest egg!
Frequently Asked Questions
Here are quick answers to some common questions about what Charles Schwab’s USAA deal means for you:
Does this impact my USAA banking or credit accounts?
No. Only investment brokerage accounts are moving to Charles Schwab. Your USAA banking and credit services are not affected.
Can I still work with USAA financial advisors?
No, Charles Schwab now provides the licensed financial advisors for investment portfolio guidance. But you can still access USAA advisors for specialized military lending needs.
Do my USAA login credentials change?
Not yet. You can currently use the same USAA username and password. Schwab may issue new credentials later to enhance security.
Who owns or manages my old USAA mutual funds?
Your USAA mutual funds are still owned by USAA Asset Management Company, while shareholder servicing and distribution is now done by Charles Schwab.
Can I still trade and withdraw as normal?
Yes. You have the exact same trading capabilities, mobile access, and withdrawal functionality through the transition.
What happens if I had a corporate employee account?
Vesting employee accounts will continue their vesting schedule. Non-vested accounts over 1 year old can be rolled over to an IRA. Speak to a Schwab representative for assistance.
It’s Time to Take Charge
Charles Schwab’s completed integration of USAA investment accounts marks a major shift in management of over $135 billion in assets. All impacted investors have critical decisions to make.
We recommend USAA members now managed by Schwab embrace this transition as a catalyst:
- To take ownership reorganizing your accounts
- Choosing optimized portfolios for your risk tolerance
- Consolidating investments across providers for simplicity
- Funding any underutilized accounts available through Schwab
- Harvesting tax losses across holdings
- And reexamining your wealth management strategy with a fresh perspective
Charles Schwab offers a full range of wealth management solutions from self-directed trading to customized advisory services packages that now extend to former USAA investors.
While change brings uncertainty, view this investment service acquisition as your cue to take control: opting into any enhanced capabilities, removing legacy complexity, and crafting an ideal unified strategy on the robust Schwab platform.
The information on this site is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security or other product.
This article contains the current opinions of the author but not necessarily those of Charles Schwab & Co., Inc. The author’s opinions are subject to change without notice. Information contained herein is obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness.
Stay tuned for future updates on emerging account transition guidance. And let us know any other questions in comments below!