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USAA sells Wealth-Management business to Charles Schwab for 1.8 Billion.

By July 30, 2019Uncategorized

San Antonio-based USAA announced that it’s selling its investment management business to Ohio-based Victory Capital Holdings Inc. for at least $850 million.

Charles Schwab became next in line for part of the San Antonio-headquarted company. Specifically, Schwab, based in San Francisco, agreed to buy USAA Investment Management Co. for $1.8 billion. It is uncertain how this transaction will impact Victory Capital’s efforts.

The deal will bring Schwab roughly $100 billion of assets from USAA. Schwab has more than $3.5 trillion in client assets. Schwab has been moving further into wealth-management for clients formerly represented by elite Wall Street firms, according to the Journal report.

USAA’s investment-management business that Victory acquired had $81.3 billion in assets under management. Victory said it hired about 230 of the USAA unit’s 300 employees.

When USAA announced in November that it was selling the asset-management business to Victory, USAA CEO Stuart Parker said it was the largest transaction USAA has done in the past two decades, possibly ever.

A deal with Schwab could be twice the size of the Victory transaction, which has the potential to increase in value by $150 million, depending on revenue figures.

At Schwab, new retail clients opening managed investment accounts have increased 63 percent at since 2015. New account holders receiving advice now average about $600,000 in assets, according to the Journal article.

Patrick Danner is a San Antonio-based staff writer covering banking and civil courts. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | pdanner@express-news.net | Twitter: @AlamoPD