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Occasional Contributor

With speculation around USAA's sale of it's brokerage and wealth-management business to Schwab, and it's recent sale (non-speculative) sale of it's mutual fund business to Victory, can someone explain in layman's terms what the member impact will be? Same login? Same statements? Same single dashboard view? Same level of service? Communication around this has been less than stellar. Full disclosure, this feels sad to me - I've viewed USAA as a family for a long time, and now I feel like it's breaking up.

13 REPLIES

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Same question here.  The main reason I've stayed with USAA Brokerage is because of the tight integration with the Banking services: Easy transfer of funds between accounts, single source of statements and tax data, single mobile app/user account, etc.  With the Schwab divestiture, what changes can we expect in terms of integration, investment options/limits, and fees?  Thanks.

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Waaaay Off Course - As always, USAA is committed to our mission and members and we do not comment on speculation. - Jason

 

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There is a page on USAA's site that answers these questions: https://www.usaa.com/inet/wc/investments-management-update

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I have a few questions...

 

1. Since NFS presumably would no longer be involved in the brokerage transactions, I am assuming that Fidelity commission free is going away? I am fine with this, but would like confirmation.

 

2. When will this deal close? I see reports stating middle of 2020...is it really going to take that long?

 

3. Can I currently buy Schwab commission free at this time, since USAA is using them for brokerage services in the future? If the answer is no, this should change as soon as possible in the interim. 

 

My issue is up until now, I have purchased Fidelity funds because they were the best commission free option available, but now since I want to stay in one place, I am on hold essentially until USAA completes this deal, unless I continue to buy Fidelity for the time being and then sell and reinvest into Schwab in the future, when the deal is completed. It would help to have an idea of a timeframe and what we can expect.

 

4. Just as we heard with the Victory deal, again we see that the benefit beyond these new companies offering us new products is that USAA is going to focus on being better and more competitive in the banking and insurance space, when can we expect to see that, as of right now, I don't see anything changing?

 

Thanks for your time! Although I see I am replying to TampaMike, this is for USAA Social.

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I too have Fidelity Funds in my brokerage account and I looked at the Schwab site. It looks like Fidelity Funds are commission free.

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Not sure that is correct, only because I did a search through them for no load-no transaction fee funds and clicked on Fidelity specifically and no dice. You can buy them, but you have to pay the transaction fee each time you make a purchase. For an IRA, not the end of the world because you can just sell what you have from Fidelity and find comparable Schwab fund, but if you have sizeable taxable account, and want to stick with Fidelity, might benefit you to transfer to Fidelity and go with them. 

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When I contacted Schwab they indicated the Fidelity ETF's that are currently commission free with USAA are NOT included in their Schwab ETF OneSource portfolio of 500+ commission free funds.

 

Maybe that will change by the time the deal closes (doubt it), but you can always make the choice to sell shares (any losers?) commission free via USAA before the deal closure (taking the tax hit/benfit if outside of a retirement account), and then buy into comparable Schwab OneSource ETF's, or Schwab managed ETF's which are also commission free, afterwards.

 

After a transfer-in-kind to a Schwab account, you can still sell the Fidelity ETF's at $4.95 fee per trade...

 

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I'm a bit concerned as well.  Been a USAA member for 46 years.  I guess now all of my investments will move to Schwab.  Understand they are a good company and very competitive with the other big firms like Vanguard and Fidelity.  I'll wait and see how this pans out.  I have a mix of funds now that include a number of non-USAA funds.  Time will tell if I stay with Schwab.

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One change with the sale to Victory is that you can no longer do instantaneous transfers between mutual funds and checking.  It is now no different than if the money was elsewhere, you have to "sell" the mutual fund and wait days for it to show in your checking acct.

 

I am going to start looking elsewhere, as my primary reason for keeping money in USAA mutual funds was the convenience of access to my money.