USAA said Tuesday it has completed the sale of its investment management company, including its brokerage and managed portfolio accounts, to the Charles Schwab Corp.
The deal adds more than a million accounts with about $80 billion in assets to San Francisco-based Schwab, which now has total client assets of $3.8 trillion.
About 400 USAA employees will join Schwab.
When the deal was announced last summer, it was valued at $1.8 billion.
USAA and Schwab have entered into a long-term referral agreement that makes Schwab the exclusive provider of wealth management and investment brokerage services for USAA members.
“USAA and Schwab share the same unwavering commitment to facilitate the financial security of our members and clients,” USAA CEO and President Wayne Peacock said in a statement. “Schwab approaches every decision ‘through clients’ eyes’ and offers a wide selection of investment products and services for some of the lowest costs in the industry.”
The sale is part of USAA’s strategy to simplify its business and focus on its core products and services in insurance and banking.
Last summer, USAA completed the sale of its asset management business to Victory Capital Holdings Inc. in a deal that could be valued at $1 billion. The business oversaw a portfolio of 47 mutual funds, six exchange-traded funds and a college savings plan.
Victory subsequently relocated its headquarters to San Antonio from Ohio. About 140 USAA employees in San Antonio joined Victory.
S.A. VOTES
USAA boasts some 13 million members, but only about 10 percent of them have tapped its wealth management and brokerage services. Schwab officials see an opportunity to increase that percentage.
“Only 10 percent of (USAA) members use wealth management,” Schwab CFO Peter Crawford said in a conference call to discuss the transaction with analysts last summer. “They’d like that number to be up much higher than it is today, and so would we, of course.”
USAA’s membership is comprised of current and former military personnel and their families.
Patrick Danner is a San Antonio-based staff writer covering banking and civil courts. To read more from Patrick, become a subscriber. pdanner@express-news.net | Twitter: @AlamoPD