The Military Guide


Coming Soon: New USAA Brokerage Services


[Note: anyone can sign up for an account with USAA’s investment products, and you do not have to be a USAA member. Their website says “Our focus always has been and remains the military community, but USAA investment products are available to the general public.”]

USAA’s investment services will soon get even better: they’re adding a new brokerage platform and expanding their product line.

The company’s core business is property and casualty insurance, but over the decades they’ve added banking and investments. Outstanding member service has still been the priority across all of their divisions and products. The company is owned by its members, so its return on capital can be spent on long-term improvements to member services instead of chasing short-term share performance.

That philosophy carries over to USAA’s investment services. They are not the biggest financial company, but they rank high on trust. They don’t try to compete with other financial firms on price, but they compete on service. They don’t have the nation’s lowest expense ratios (like the Thrift Savings Plan) but they have competitive mutual funds.

Image of USAA logo |
Coming soon– new products!

Instead they offer consolidation and convenience. The typical USAA customer is a very busy military family. They already have their property and their vehicles insured with USAA. Perhaps they’re using banking services like personal checking, savings, and credit cards. They might have a USAA mortgage or CDs. When they transition from uniform to a civilian bridge career (or retirement), they can keep their membership and continue to enjoy all of these member services.

As USAA (and its membership) grew larger, the company added mutual funds and a brokerage. Customers can keep all of their savings, investments, and insurance with one trusted company and move their funds quickly between accounts. They can see all of their finances on one screen, and (most importantly) they can log in from a combat zone or overseas base housing at 3 AM on a weekend. Members can trust that no matter where they are or what they’re doing, they’ll be able to contact a USAA member services rep who can take care of their business with one phone call.

This degree of comprehensive service and convenience was unprecedented in the 1980s, but today it’s a commodity. Almost every financial services company offers consolidated account views (even across different investment firms) and every firm wants to help you move your money faster. USAA was losing their lead.

I spoke with USAA’s financial services execs about their upgrades. Kevin Craft is USAA’s Vice President of Investment Operations and Sean Grindall is the Assistant Vice President of Retirement & Wealth Solutions. They have the daunting task of overhauling a 15-year-old system while improving its member services.

Instead of spending millions of member dollars on an arms race of networks and features that would look like every other major financial company, USAA has contracted National Financial’s brokerage technology. The company is a subsidiary of Fidelity Investments, so if you have a Fidelity account then you already see National Financial’s trade execution and other back-office support. This upgrade brings one of the world’s top brokerage platforms to USAA’s member service. National Financial will handle trades along with share custody and clearing. Better yet, they’ll offer a few new features: options trades and strategies, brokered CDs, and immediate access to cash trades. USAA’s current brokerage customers have already been notified of the change and the conversion will roll out later this summer. As the upgrade moves from USAA’s servers to National Financial’s servers, the only obvious change to members will be the new products.

Is USAA encouraging its investors to pick their own stocks and trade options? Well, only if they want to. Members have been asking for more brokerage services for years, and they’ve had to find them at other financial firms. Now members can use these complex investment techniques right at USAA instead of having to split assets across multiple companies. If you don’t pick stocks or trade options now then there’s no reason to start.

The upgrade also frees USAA to focus on their expert financial advice & management along with outstanding customer service. (National Financial is only contracted for the infrastructure and execution.) Members still have a consolidated view of all their assets. USAA still offers one of the Internet’s most user-friendly retirement planners. You can still plan your savings for college or other goals. You’ll still enjoy access to USAA’s market-analysis tools. You can still check your accounts and execute trades with their mobile investing app. Their member service representatives are happy to help with asset allocation questions using USAA mutual funds or exchange-traded funds. They’ll even manage a member’s accounts. Best of all, National Financial’s systems offer faster execution at a lower price. Take a look at USAA’s fees and see if you’re eligible for free trades.

By the way, many military veterans still remember when USAA membership was only for officers. That is no longer the case, and USAA has been trying for nearly two decades to get the message out to eligible veterans. The criteria is All who have served honorably, and their families”. You might even qualify without any military service– if your parents or grandparents were in the military and discharged honorably, then they can join USAA. Once they join USAA, then you can join too.

More questions? Start with USAA’s investing center or add a comment below!

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