Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 11-10-2018, 09:08 AM   #41
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,199
Quote:
Originally Posted by check6 View Post
Also, passing through Phoenix I saw huge building with USAA on the side and wondering if they are expanding in this area. Another Taj Mahal?
There is an enormous one in Colorado Springs too. I think they just put their presence where they have lots of customers.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-10-2018, 10:08 AM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
samclem's Avatar
 
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
Nords,
Thanks for the additional information.

Quote:
Originally Posted by Nords View Post

Second, the investment execs seem to be too deep into the details to explain that all they've really done is outsource the investment business. USAA has struggled with third-party contractors (I'm lookin' at you, mortgage branch) and since Victory owns the business instead of being a contractor, they're motivated to be efficient with their capital. Additional earnouts will be based on client metrics. USAA employees will still be handling the member service while Victory will be doing everything else in the back office.
The bold (added above) portion was the part I missed. So, USAA isn't entirely jettisoning their investment customers, but they are ridding themselves of the fund management and admin, and have actually sold that function. Now they'll have no control over how the funds are managed/administered and yet they can't fire Victory if things go off the rails. No matter what happens they are the "face" of the product to their USAA customers.

If having two companies splitting the duties like this >saves< money, it does say something about the efficiency of USAA's management/administration of the funds in the past.
samclem is offline   Reply With Quote
Old 11-10-2018, 10:38 AM   #43
Thinks s/he gets paid by the post
 
Join Date: Sep 2002
Posts: 1,173
Interesting. I suspect Colorado is a losing are for them the last couple of years with our multiple hail storms and fires.
JDARNELL is offline   Reply With Quote
Old 11-11-2018, 09:51 AM   #44
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Quote:
Originally Posted by check6 View Post
Thanks Nords. Been a member of USAA for 40+ years and have never had an accident claim. They like me.

I find their new website difficult to navigate. Last month tried for an hour to take a vehicle off seasonal storage and add one but finally gave up and called them.

Also, passing through Phoenix I saw huge building with USAA on the side and wondering if they are expanding in this area. Another Taj Mahal?
USAA's Innovation Lab is really trying very hard to get rid of phone service or to replace it with Siri/Alexa tech. They've come a long way on the routine member queries but something like your policy service is still beyond the AI. Even so they'd greatly prefer to handle your request by e-mail or text.

They have an entire lab of human-factors engineers who test member services (both over the phone and over the app/website) and they're constantly updating both the systems used by members as well as the tech used by the member service reps. MSRs can apply to work in the lab (for up to a year) where they do their same job as the call center, but with a bunch of additional beta-testing tools to see what's working and what can be scaled up across all the MSRs.

USAA has actually outgrown their San Antonio campus. (That building is already bigger than the Pentagon.) They're also renting space in downtown San Antonio near Riverwalk... maybe by now they've bought it.

The Phoenix building is a gigantic call center, along with some training and R&D:
https://www.azcentral.com/story/mone...mpus/75923434/

Quote:
Originally Posted by braumeister View Post
There is an enormous one in Colorado Springs too. I think they just put their presence where they have lots of customers.
And potential employees-- the company has grown to over 23,000 employees to handle the larger membership, and about 30% are veterans and military spouses. Colorado Springs used to be a huge center for CFPs and wealth management (but is taking on other tasks as well). Much of that service is being put online or automated: Skype, Zoom, Facetime, and robo-advisors.

https://www.usaa.com/inet/wc/about_u...kredirect=true

A decade ago (cheap real estate) USAA was ready to expand bricks & mortar to take the business to the military bases and veterans populations. However smartphones and tablets (and bandwidth) have completely disrupted that strategy, and the USAA app has expanded to take over many tasks. Several years ago USAA started shutting down as many member service centers as they could. I'm beginning to think that they'll never open the Oahu office near Schofield Barracks, let alone have a coffee cup there with my name on it...

Meanwhile the ratio of members to employees continues to rise. The biggest challenge is "surge service" where hundreds of member service reps (and claims adjustors, and support staff) have to work on the claims from a named hurricane or a wildfire. That surge is especially bad during the hours after the disaster but the workload continues for weeks.

Quote:
Originally Posted by samclem View Post
Nords,
Thanks for the additional information.

The bold (added above) portion was the part I missed. So, USAA isn't entirely jettisoning their investment customers, but they are ridding themselves of the fund management and admin, and have actually sold that function. Now they'll have no control over how the funds are managed/administered and yet they can't fire Victory if things go off the rails. No matter what happens they are the "face" of the product to their USAA customers.

If having two companies splitting the duties like this >saves< money, it does say something about the efficiency of USAA's management/administration of the funds in the past.
I think it's an aspect of how much of the fund industry is in a race to the bottom. There's no way that USAA's small fund size (and assets contracted under wealth management services) can compete with the large firms. The big firms have the lowest fund expenses (despite their expensive infrastructure, it scales) and they have at least 10x-100x more assets under management.

The only reason USAA is in the fund-management business is member convenience and consolidation as well as a good brand reputation. It's a 1960s buggy whip and as the members move on to other companies (or, frankly, as their assets move on through probate) then USAA will continue to outsource it.

It's not just USAA-- it's the entire freakin' industry. Read Michael Kitces' blog "Nerd's Eye View" (https://www.kitces.com/). If you're in the financial business then it's worth listening to his podcast. People can still make money but you're either very big or very concierge or very niche.

A good friend has watched one of the Big Three fund companies outsource an entire division of their infrastructure (overseas because English-speaking service isn't a part of the job). They were laid off from that company and hired relatively quickly by a competitor to scale up more back-office infrastructure.

I think the only control that USAA will continue to have over their mutual funds will be their licensing of the letters "USAA". Otherwise they might as well spell the names of their funds "VTSAX".

USAA has tried to hire contractors for their mortgage lending process, and that's been a constant revolving door of complaints and new contractors. I've never heard anything one way or the other about whether they're staying in the mortgage business, but I would not be surprised to see that turned into some sort of white-label version of an online lender.

USAA's business checking has also been a total failure, because the service can't pay its expenses. Members (especially military spouses who are online entrepreneurs) want it but they're not willing to pay the actual costs. (Business checking is apparently a loss leader.) Last year USAA started working with a startup that was a leader in that fintech, but the startup is rumored to be unable to scale it. By the time business checking begins to work, entrepreneurs may have moved on to mobile (online) payments.

Quote:
Originally Posted by JDARNELL View Post
Interesting. I suspect Colorado is a losing area for them the last couple of years with our multiple hail storms and fires.
And California. We heard quite a bit about wildfires at USAA's Digital MilEx in September.

USAA is still trying to reduce the cost of claims processing, but they're pushing even harder on avoiding the damage in the first place. Out here it's building codes and hurricane tech, and in Tornado Alley it's earlier detection & faster alerts. In wildfire areas it's forestry management as well as getting more firebreaks around neighborhoods. However nobody wants to pay the costs (not even governments or home builders, let alone members) so it's a constant struggle.

Out here when USAA's hurricane concentration risk got too high, they limited their new policies to first-time buyers. USAA members could not add a home (switching from one insurance company to another) and everyone was paying more for hurricane policies. USAA also spent a lot of money on the members for disaster awareness and hurricane prep, while jacking up the premiums and encouraging higher deductibles. Price-sensitive policy holders began to raise their deductibles (as we have) or move to other companies. The net result was that USAA was able to lower their concentration risk while earning about the same amount of margin on their revenue.

I think one of the big reasons that USAA was able to insure more Hawaii homeowners in the last few years has been smartphone tech reducing the expense of the claims process.
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Old 04-12-2019, 11:08 AM   #45
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,686
This is a copy of the Proxy Statement:
https://www.sec.gov/Archives/edgar/d...758_d1-SEC.htm

USAA MUTUAL FUNDS TRUST SUPPLEMENT DATED MARCH 7, 2019 TO THE STATEMENT OF ADDITIONAL INFORMATION DATED OCTOBER 1, 2018, AS SUPPLEMENTED NOVEMBER 7, 2018.

Shareholder meeting this week or next, I heard.
target2019 is offline   Reply With Quote
Old 04-13-2019, 08:01 AM   #46
Thinks s/he gets paid by the post
corn18's Avatar
 
Join Date: Aug 2015
Posts: 1,890
I just finished moving all of my banking and investments to Fidelity. Not because I hate USAA but because FIDO offers so much more flexibility and access to all investment types.

So USAA is now just my insurance company much like they were when I signed up in 1984.

Life is good.
__________________
Consistently sets low goals and fails to achieve them.
corn18 is offline   Reply With Quote
Old 04-13-2019, 08:49 AM   #47
Recycles dryer sheets
 
Join Date: Nov 2012
Posts: 112
When I joined USAA over 40 years ago it was a low cost provider of automobile and homeowner's insurance. Its field of membership was limited to a low risk pool of military officers and dependents in the field of membership. It was an efficient organization with an intense focus on customer service.

USAA tried to become a financial services company offering banking and investment services. It also dramatically expanded its field of membership, which likely increased its insurance costs by taking on riskier customers. Its mutual fund offerings are high cost and medium to low performing. Its "wealth management" group provided cookie cutter solutions at a high cost relative to other options. When I was with the wealth management group the concept of index investing was foreign to the wealth manager. All he could offer was a portfolio of managed stocks which meant constant churn and sub index performance. Plus the wealth manager seemed focused on selling me more life insurance when I didn't need or want instead of trying to tailor an investment program to my individual needs. The company seems to have become a large, bureaucratic, high cost operation trying to control expenses by offering one size fits all solutions. Needless to say moved my investments several years ago (much better performance with index funds at Vanguard) and I'm bidding out my auto and homeowner's insurance this year.

USAA has a big office building in Tampa in addition to San Antonio and Phoenix. It makes me wonder why the high investment in technology hasn't brought the company the capability of offering more custom tailored insurance, banking and investment solutions with less headcount. If the company is backing out of investments and banking, will it aggressively take out the headcount or will it end up with fewer businesses and high overhead?

Several times I tried to have conversations with senior executives at USAA about the slipping service, high costs relative to competition, and other options in the marketplace. I came away with the conclusion inertia, not vision, is driving the business. None could articulate a vision for me. If you don't know where you are going, any road will take you there. Unfortunately when you arrive you may find yourself underwater.
__________________
Retired at 57. Now a happy camper!
NC 57 is offline   Reply With Quote
Old 04-13-2019, 09:19 AM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,686
Yes, Fidelity has a lot to offer. I expect that by the end of 2019, our inherited investments will be transferred to Vanguard and Schwab.

I don't see imminent problems with Victory Capital taking over. There is mention of this in proxy statement, that expenses will stay same, with VC making up any difference that occurs. That will be for a limited time, though.
target2019 is offline   Reply With Quote
Old 04-13-2019, 09:22 AM   #49
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,686
Quote:
Originally Posted by NC 57 View Post
Several times I tried to have conversations with senior executives at USAA about the slipping service, high costs relative to competition, and other options in the marketplace. I came away with the conclusion inertia, not vision, is driving the business. None could articulate a vision for me. If you don't know where you are going, any road will take you there. Unfortunately when you arrive you may find yourself underwater.
That's typical of a lot of companies, I believe. There's fear of failure when new ideas are proposed. The old model is broken, but no one person is powerful enough to bring in rapid change for the better.
target2019 is offline   Reply With Quote
Old 04-13-2019, 09:39 AM   #50
Thinks s/he gets paid by the post
 
Join Date: Jul 2009
Posts: 1,605
Retired military ...

Like so many others have reported, USAA was great in the days when they were an insurance company - responsive and crisp in the days of phones AND they mitigated their risk and my costs by insuring people like me - pretty darn reliable and consistent - the officer corps of the US military.

When they started spreading into investments, I tried them for awhile, but found their performance - even in managed funds - to be lacking that compared to other managed funds - and, especially low cost index funds - so, I jumped ship.

Had several discussions, as well, with relatively senior management at industrial events and shows - all had the same corporate babblespeak that comes from getting bonuses.

Over the years, it became harder and harder to justify the additional cost of USAA insurance - and, sure we lived in areas where USAA had a large base - and sometimes high costs due to hurricanes. So, we gave up on them for everything except for auto insurance - and we are considering going elsewhere for that.

Our last serious contact with them was trying to get an umbrella policy - we spent 45 minutes on the phone with someone who simply was ill-trained to service our needs. Gave up and obtained the umbrella elsewhere.

I'd like to have them back - to where they insured my risk group only.
stephenson is offline   Reply With Quote
Old 04-13-2019, 09:54 AM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
athena53's Avatar
 
Join Date: May 2014
Posts: 7,326
Quote:
Originally Posted by corn18 View Post
I just finished moving all of my banking and investments to Fidelity. Not because I hate USAA but because FIDO offers so much more flexibility and access to all investment types.
I have no military connection but for some reason was able to get a USAA checking account several years ago. Just a few days ago I got tired of one little "feature" that was an annoyance often enough that it became a dealbreaker: the time period for which you could access your transaction detail on-line was frustratingly short. Most recently, I wanted to access transactions from last December- not available.

So, I've opened up a new account within Fidelity (I have a lot of investments there already) since it's easy to set one up with checkwriting and bill-paying. It will take awhile for all my direct deposits to land there but at least I've initiated the changes.

Unfortunate about USAA- I was in the insurance business starting with my first job out of college in 1975 and USAA was always a class act- both for employees and customers. Things certainly have changed.
athena53 is offline   Reply With Quote
Old 04-13-2019, 10:05 AM   #52
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,199
Quote:
Originally Posted by athena53 View Post
I have no military connection but for some reason was able to get a USAA checking account several years ago. Just a few days ago I got tired of one little "feature" that was an annoyance often enough that it became a dealbreaker: the time period for which you could access your transaction detail on-line was frustratingly short. Most recently, I wanted to access transactions from last December- not available.
Anyone can open an account at USAA Federal Savings Bank. It's just the insurance that requires a connection.

You could have seen those older transactions by using the Search function. The default for the drop-down list is only 90 days but the older ones are available.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 04-13-2019, 10:53 AM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
athena53's Avatar
 
Join Date: May 2014
Posts: 7,326
Oops- more to add to the "What I Learned" thread. Should have complained here first! I still plan to move the account- consolidation will simplify my finances.
athena53 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Small victory for the little guy mickeyd FIRE and Money 53 01-03-2018 01:59 PM
A quiet, anonymous little victory.... Koogie Hi, I am... 41 09-03-2016 08:31 PM
Victory -Razor Blades - Chapter 3 imoldernu Other topics 10 03-10-2014 09:26 AM
A small victory for systolic Khan Health and Early Retirement 6 05-03-2008 07:38 PM
USAA for investment help? Joss FIRE and Money 10 05-18-2007 01:49 PM

» Quick Links

 
All times are GMT -6. The time now is 11:50 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.