The Charles Schwab Corporation (NYSE: SCHW) has agreed to buy USAA’s Investment Management Company, including brokerage and managed portfolio accounts, for $1.8 billion in cash. The companies have also agreed to enter into a long-term referral agreement, effective at closing of the acquisition, that would make Schwab the exclusive wealth management and brokerage provider for USAA members.
USAA provides insurance, banking, investments, retirement products and advice to more than 13 million current and former members of the U.S. military and their families.
“We have long admired USAA’s mission to enhance the financial security of our country’s military service men and women and their families,” said Walt Bettinger, president and CEO of Schwab. “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.”
For Schwab, the transaction add scale to its $1.9 trillion investor services business through the addition of more than 1 million new accounts and approximately $90 billion in client assets.
The transaction has been approved by the boards of both companies and is expected to close during 2020. The conversion of USAA’s brokerage services and managed portfolio accounts to Schwab’s platform will occur at the close of the transaction.
Charles Schwab is a leading financial services provider with more than 12 million active brokerage accounts, 1.7 million corporate retirement plan participants, 1.3 million banking accounts, and $3.7 trillion in client assets as of June 30, 2019.