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Schwab/USAA $2B deal
Old 07-15-2019, 03:56 PM   #1
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Schwab/USAA $2B deal

It appears as though USAA is getting out of the brokerage biz.

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The San Francisco-based brokerage firm is in talks to buy USAA’s brokerage and wealth management operations for roughly $2 billion, The Wall Street Journal reported Monday. The deal may be reached this month, the newspaper said, citing people familiar with the matter.
https://www.financial-planning.com/a...a4efd3ab3f673f
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Old 07-15-2019, 03:57 PM   #2
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Thanks for the news. They just got out of the mutual fund business, so this is no surprise.
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Old 07-15-2019, 04:00 PM   #3
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I guess this is the other shoe dropping.

I love USAA, but their investment management group has never been competitive to Schwab, Fidelity or Vanguard. Smart move, IMO -- let USAA do what they do best (insurance) and leave the investing to others. They are looking more at a money management and financial planning services angle, it appears, and Schwab has much more of those resources and can probably deliver them more efficiently.
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Old 07-15-2019, 04:10 PM   #4
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An interesting line from the cited article:
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Baby boomers are becoming increasingly dependent on money managers as they retire at a pace of 10,000 a day.
I guess those of us still mired in old-fashioned DIY mode may soon be seen as clueless dinosaurs. But that's OK with me. Interesting that USAA apparently has over $100 billion in client assets, more than I thought.
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Old 07-15-2019, 05:00 PM   #5
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Yeah, I love USAA, but IMO they were never very good at that part. I moved a few accounts to Fido because I had to call USAA on the phone to do, say, a backdoor Roth conversion when I can do it online at Fido.
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Old 07-16-2019, 07:19 AM   #6
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USAA was a great insurance company when they focused on the low risk military officer corps.

Then they decided to be big britches, thought they were Fidelity. - I recall arguing this with a senior exec years ago. He was involved and supportive because HE could make more money.

I still have car insurance with them, but no longer can afford their property insurance.

I note their TV commercials tout them covering appliance repairs for E4s ...

They’ll likely continue their decline.
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Old 07-16-2019, 02:41 PM   #7
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Oh man. I have a Roth with USAA. Ive never really loved it, its okay. I also have a regular brokerage with Fidelity, and have toyed with moving it to Fido, but I really like having accounts with 2 different brokerages...just in case, you just never know. Now it looks like Im being forced to make a decision. Do I make the move to Schwab, which Im not familiar with at all, or do I move the Roth to Fido, but that ties up all my retirement money with one company. Gah...I hate making these decisions.
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Old 07-16-2019, 02:44 PM   #8
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Originally Posted by carnivalday View Post
Oh man. I have a Roth with USAA. Ive never really loved it, its okay. I also have a regular brokerage with Fidelity, and have toyed with moving it to Fido, but I really like having accounts with 2 different brokerages...just in case, you just never know. Now it looks like Im being forced to make a decision. Do I make the move to Schwab, which Im not familiar with at all, or do I move the Roth to Fido, but that ties up all my retirement money with one company. Gah...I hate making these decisions.
I've been with both Schwab and Fidelity for several years. I'm happy with both.
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Old 07-16-2019, 02:53 PM   #9
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They sold their mutual fund operations a while back. The USAA name survive but its now been liquidated.
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Old 07-16-2019, 03:05 PM   #10
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I've been with both Schwab and Fidelity for several years. I'm happy with both.
Thanks for that. It helps. I dont trade a whole lot, but I do look at my accounts every day, and live off of dividends, so I like to be able to track them. Maybe Ill sign up for an account there and test drive it.
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Old 07-16-2019, 04:55 PM   #11
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Originally Posted by carnivalday View Post
Oh man. I have a Roth with USAA. Ive never really loved it, its okay. I also have a regular brokerage with Fidelity, and have toyed with moving it to Fido, but I really like having accounts with 2 different brokerages...just in case, you just never know. Now it looks like Im being forced to make a decision. Do I make the move to Schwab, which Im not familiar with at all, or do I move the Roth to Fido, but that ties up all my retirement money with one company. Gah...I hate making these decisions.
Schwab is a fine discount brokerage. Perfectly good choice as a second brokerage. And if you travel overseas take advantage of their no foreign transaction fee ATM card from Schwab bank.
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Old 07-16-2019, 05:21 PM   #12
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USAA cannot complete with other firms in Brokerage. If you are a veteran or first responder you can establish an account at TradeStation and have zero commission fees. I day trade through them, and I like their service. I also like their zero commissions, while USAA was 8.95 per trade. In my trading style I build a trading position over 4 or 5 buys so ($40 ish with USAA) and sell it in 1 or 2 lots ($9 - 18).

I just started with TS this month, but, have bounced between several services over the past 7 years, while I built my trading account!
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Old 07-18-2019, 05:24 PM   #13
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I still have money in the USAA Money Market fund USAXX which was purchased by Victory Capital. The linked article below indicates Victory Capital is highly leveraged and took on even more debt to buy USAA's Mutual Fund business. I'm going to move these funds to Vanguard as I do not wish to have an aggressive, highly leverage firm managing some of my assets.

Victory Capital Acquires USAA Mutual Funds
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Old 07-19-2019, 10:29 AM   #14
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I have IRA and money market with USAA. What would be a good alternative? I do no trading. All funds are kept in either the money market, index funds. The only withdrawl from the index funds is the required distribution. I would like the money market to transfer smoothly both ways from USAA where my checking accounts are.

edit: I'd like to make this as painless as possible
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Old 07-19-2019, 10:38 AM   #15
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Rustic, I have both IRA stock/bond funds and a MMkt fund at Vanguard. Transferring money to/from USAA and Vanguard is really easy to do online.

DW has some IRA money at USAA that she will transfer to Vanguard next week. Time to move on...
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Old 07-19-2019, 10:45 AM   #16
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I moved my Roth IRA from USAA to Fidelity, and I've set up automatic deposits from USAA to Fido, and automatic investments at Fido. There is often a delay of a few days, so I just set them not too close together. (But then, I'm also doing a backdoor Roth conversion every month.)
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Old 07-19-2019, 01:18 PM   #17
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Called Schwab today about the transfer, and tho they really couldnt comment on the pending sale, they were very helpful in my deciding what to do. I signed up for an account, and the rep walked me thru all the neat things on their website. Really like it, and liked the rep. So I began the transfer today, and I get 500 free trades. In a way its a relief; I was paying $6 per trade at USAA, and really didnt feel the website was worthwhile.

So its all good.
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Old 07-19-2019, 02:06 PM   #18
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Rustic, I have both IRA stock/bond funds and a MMkt fund at Vanguard. Transferring money to/from USAA and Vanguard is really easy to do online.
+1. Most of our investments are at Vanguard, USAA FSB is our bank. All the transfers are easy.


I think USAA is doing the right thing in getting out of the brokerage/MF business. They weren't too good at it, and the tide is certainly against them. I'm very happy with them as an insurance company and satisfied with them as a bank (it's all relative--compared to other big banks, they are probably fantastic).
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Old 07-26-2019, 06:10 AM   #19
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So, the deal is going through, barring any unforetold complications.

https://www.cnbc.com/2019/07/26/char...lion-deal.html

Schwab would acquire 1M accounts worth about $90B in client assets, for $1.8B.
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Old 07-26-2019, 08:24 AM   #20
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Schwab would acquire 1M accounts worth about $90B in client assets, for $1.8B.
So the average account size is about $90k. That's an interesting bit. I would have guessed higher, but maybe the "big fish" moved on to other brokers.
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