USAA has become (arrogant) used car salesmen, I'm leaving after 50+ years

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Contributor

I'm a 52 year member, Vietnam vet, and 77 yrs old. Today was the last straw- I'm moving my accts out of USAA. 

 

They will probably respond with their typical "you're complaint has been referred to the appropriate department" garbage. Hear this USAA: worry about the complaint I and others filed with FINRA, not moderating this post. If anyone else had this experience I urge you to file a complaint with FINRA. 

 

My USAA IRA's were misdirected to National Financial Services, who exclusively controlled them after 5/26/20. They did not go to Schwab during the USAA-Schwab merger as promised. ALL BECAUSE OF MISTAKES USAA MADE. I wasted two months and countless hours on the phone between NFS and USAA cleaning up their mess- usually being lied to, given wrong information, in a few cases brokers refused to give their names!

 

Here are just SOME of the highlights of the Schwab merger mess: 

 

  1. Despite over five contacts with USAA in the days before the Schwab transition, they failed to tell me a security in one of my accts would cause Schwab to reject them and force them to NFS. In fact I was told IT WOULD transfer to Schwab. Removing the acct and the problem security from NFS was a complex, multistep nightmare that USAA completely wiped their hands of- once at NFS USAA claimed no responsibility- even though they caused it to be there.

 

  1. USAA assured me shares in one IRA would be redeemed by the last trade cut off date of 5/20/20 and gave me confirmation numbers for the trades. They weren't redeemed. But they changed the acct status preventing it from going to Schwab- forcing it to NFS. The only way to get the acct from NFS to our preferred brokerage Vanguard was to redeem the shares at NFS. NFS charges trade fees, had they gone to Schwab we could have placed the trades online for free.

 

  1. Most stunning- they sent us notices in June that "The assets in your account are now carried by National Financial Services LLC ("NFS") in a taxable brokerage account with limited access and features.” THEY CLAIMED THEY CONVERTED MY IRA TO A TAXABLE ACCT without warning. At that point they had not converted them yet and we the accounts before that happened, but that conversion almost surely violates SEC rules. 

 

When a family member reviewed my accounts with USAA she was stunned at how blatantly they sold me terrible investments: an annuity INSIDE an IRA where they recommended I put HALF of my 401K, the rest in entirely managed funds- not a single index fund- none of which outperformed the market, on top of their 1.1% "management fee." I've lost thousands because I made the mistake of trusting USAA and I will spend the rest of my life making up for their sales pitches. 

 

In addition they sold me a whole life policy- because that's where they get huge commissions. Never, ever listen to the sales pitches for a whole life policy- they push these hard. (USAA tried to sell my single, childless, adult daughter a life insurance policy) 

 

Today when I called USAA I talked to "JT" who seemed openly irritated and impatient with my legitimate questions about how we could take the cash value of the life insurance policy- at one point asking why we were asking these questions. At another point reminding us -more than once- that if we take the cash value they would take the 4% interest off the top because "we're going to get our money"- as if our request was tantamount to robbery. 

 

This was the final push I needed. His tone was arrogant and impatient, not helpful or informative, for asking questions about my OWN money. But that is what USAA has become.

 

I made the mistake of trusting USAA advice- they were not bound by the fiduciary rule. They sold me investments and policies that caused me to lose money while they profited with nice commissions. 

8 REPLIES

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@CostaB, I appreciate you taking the time to share your experience with us. I am forwarding your concerns to a specialist to weigh in. ~Danielle

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Usual meaningless reply from USAA, these kinds of issues should be going up to CEO level not "some specialist".

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Incredibly I sent a detailed but concise letter to the CEO via my USAA acct and email and filed a "complaint case" with the office of the CEO. Their response? Nothing. Social media posts perhaps will get thier attention.

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@CostaB

I ran into the same arrogance back in 2017 when I had several issues with my credit card and investments. Of course that was before the great migration USAA made to Victory Capital and Schwab. Endured 65 minutes of lecturing by a young representative so I decided to cut my ties at that moment. I closed my 35yr credit card, bank accounts (for me and my family) and moved all my investments out of USAA to Vanguard. Moved them using Vanguard directly. My cost ratios with USAA were high and I never got the returns I was expecting. Vanguard's are almost nothing and the returns are much better. I guess I was fortunate to avoid the investment issues that a lot of others seem to be experiencing at USAA. Let us know how it goes.

 

Note to USAA: No need to upchannel this to the next level since I no longer have any of those products with USAA.

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Rather than reply in writing, USAA called me today and reminded me it was me who decided on my investment choices- I did not have the time or energy at the time to discuss it. If you want to call me again, by all means do so and we’ll get my daughter on the line who is managing my finances.


Yes, that's right USAA. I made the colossal mistake of assuming your “advice” was good and appropriate for me- that was before 2016 when the Dept of Labor required brokers to act as fiduciaries. Before that brokers could sell you anything- and USAA did. Annuities are where they make their biggest commissions. After the rule was passed, annuity sales fell dramatically.


The facts speak for themselves: you put 50% of a 73 yr olds retirement savings in an annuity INSIDE an IRA (breathtakingly stupid) where I would be penalized for removing it for the next 7 years. ALL of my mutual funds were in managed funds with high management fees-not a single index fund- on top of the 1.1% management fee you charged for horrible advice.


Are you really USAA going to defend your advice? You took advantage of a Veteran and 50 yr member. Pathetic. Why don’t you respond here, publicly, about how it was really my fault.

 

I am getting out of USAA for good. Perhaps others can learn from my mistakes and get out before it's too late. 

 

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AGREE AGREE AGREE   I have seen USAA dispense advice to my kids that has me on the phone in 2 seconds flat asking them what the h***.  First of all, USAA you are not tax advisers so don't act as such, leave that to the professionals (that would be me) and secondly, I haven't seen USAA recommend a decent investment to any member of my family yet.   The good thing - my kids are fairly smart and were smart enough to ask me whether USAA was right or not.    The bad thing - USAA showed that they were truly incompetent.     The first two classes I would recommend -  Class 101 for USAA - Understanding basis calculations     Class 102 for USAA - Understanding the rules for Roth distributions   

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Agreed, agreed, agreed. 

 

USAA customer "service" is a joke. They had no business dispensing financial "advice." For almost everyone, annuities are a terrible investment and whole life policies are terrible for everyone. Why does USAA push them? They produce fat commissions. 

 

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I am also 77 years old and became a USAA Member upon graduating from OCS in 1967.

USSA is an excellent insurance company - I have had all of my insurance with USSA for more than 50 years.

 

I have never used USAA for anything else other than insurance.  USAA branched out into other fields about 20 years ago.  Realistically, USAA can not compete with established investment companies like Fidelity, Vanguard, Schwab.  Those companies do not do insurance and are specialized in investing.

 

USAA management will disagree.

 

If you want someone to manage your money, use someone like Vanguard.  The fees are very low, like 1/4 of 1% per year.  They will put you into a mix of their funds, based on  your risk profile.

 

Regards,

 

peter