Charles Schwab in talks to purchase USAA wealth arm

Pedro Gonçalves
Charles Schwab in talks to purchase USAA wealth arm

Charles Schwab is in talks to buy USAA's brokerage and wealth-management operations for about $2bn, the Wall Street Journal reported.

The two sides may reach a deal this month, the sources tell the WSJ. A deal could bring Schwab about $100bn of assets to add to the more than $3.5trn of client assets it already has.

Since 2015, the number of new retail clients opening managed investment accounts at Schwab has increased by 63%, and new accounts receiving advice now average around $600,000, the Journal notes.

Texas-based USAA offers banking, investing and insurance to people and their families in the US military. USAA earlier this month sold its asset-management business, including its mutual fund and ETF operations and its 529 college-savings plan, to Victory Capital in a $850m deal.

The San Francisco-based brokerage firm told employees it is scrapping an annual trip to Hawaii or other popular destinations for high-performing employees, saying the event was rooted in "a different era" and now poses "significant reputational risks," the Wall Street Journal reported, citing a company email to employees.

"At the same time, our regulators are more closely examining how award programs might skew client services or outcomes," according to the email.

In place of next year's trip to Hawaii for about 200 employees, the company will give those making the Chairman's Club an after-tax check for $5,000 and a paid week off. The move will also cut costs, although the company did not disclose how much money will be saved.

A spokesperson at Schwab declined to comment. USAA also declined to comment.


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