The acquisition will scale up Charles Schwab’s portfolio with the addition of $90bn (£72.4bn) in assets and more than one million accounts
US-based financial services provider Charles Schwab has agreed to acquire the assets of USAA’s Investment Management Company, including brokerage and managed portfolio accounts, for $1.8bn (£1.45bn).
The two companies have also signed a long-term referral agreement, which would make Charles Schwab the exclusive wealth management and broker provider for USAA members.
Charles Schwab, which already manages $3.7 trillion (£2.98 trillion) in client assets, expects the deal to scale up its portfolio by adding more than one million accounts and about $90bn (£72.4bn) in assets.
The deal was approved by the boards of directors of both companies. It is expected to be closed next year, subject to customary regulatory approvals and conditions.
USAA’s brokerage services and managed portfolio accounts will be converted to Schwab’s platform only after the deal has been closed.
Schwab president and CEO Walt Bettinger said: “We are honored to be entrusted with serving the financial needs of USAA’s members. We have long admired USAA’s mission to enhance the financial security of our country’s military service men and women and their families.
“Both of our companies share a commitment to integrity and service, and both have strong track records of achievement for those we serve, which is why we believe this relationship makes so much sense for everyone involved.”
The acquisition will scale up Charles Schwab’s portfolio with the addition of $90bn (£72.4bn) in assets and more than one million accounts
Charles Schwab
Image: The deal will add £72.4bn assets in management to Charles Schwab’s portfolio bertholdbrodersen/Pixabay.
US-based financial services provider Charles Schwab has agreed to acquire the assets of USAA’s Investment Management Company, including brokerage and managed portfolio accounts, for $1.8bn (£1.45bn).
The two companies have also signed a long-term referral agreement, which would make Charles Schwab the exclusive wealth management and broker provider for USAA members.
Charles Schwab, which already manages $3.7 trillion (£2.98 trillion) in client assets, expects the deal to scale up its portfolio by adding more than one million accounts and about $90bn (£72.4bn) in assets.
The deal was approved by the boards of directors of both companies. It is expected to be closed next year, subject to customary regulatory approvals and conditions.
USAA’s brokerage services and managed portfolio accounts will be converted to Schwab’s platform only after the deal has been closed.
Schwab president and CEO Walt Bettinger said: “We are honored to be entrusted with serving the financial needs of USAA’s members. We have long admired USAA’s mission to enhance the financial security of our country’s military service men and women and their families.
“Both of our companies share a commitment to integrity and service, and both have strong track records of achievement for those we serve, which is why we believe this relationship makes so much sense for everyone involved.”
Benefits of the acquisition
USAA members are expected to benefit from the deal, by Schwab’s scale and its ‘no trade-offs’ approach to investing. Schwab’s scale is expected to deliver products and services with lower costs and no brokerage accounts minimums.
Schwab could also offer a wide range of investment products and services to help investors meet their individual goals.
USAA CEO Stuart Parker said: “Our mission is to facilitate the financial security of the military community through highly competitive products. This agreement with Schwab can help enhance our members’ financial futures with a client-first approach that offers access to more choices in investment products.
“We are committed to making this a seamless transition for members and providing opportunities for employees. USAA remains focused on providing award-winning customer service and advice on products and services across property and casualty, banking and life insurance.”
