USAA rating

USAA Brokerage Review


USAA Investments Commissions, Fees, and Minimum Deposit


InvestmentsCommissions
Stocks and ETFs $8.95
Foreign stocks $70
Stocks and ETFs broker assisted $50
Options $8.95 + $0.75 per contract
Mutual funds $45
All listed corporate bonds $25 + $3 per bond
U.S. treasury securities at auction $45

Investments stocks, options, mutual funds, bonds, ETFs
USAA brokerage minimum deposit to open account $0
FeesUSAA brokerage fees


We begin our 2017 USAA Investments review with pricing and minimums. The broker's commission on stock and ETF trades is high at $8.95. Mutual funds are priced higher than average at $45 to buy, sell, or exchange. Options contracts are $0.75 each plus $8.95 trade ticket.

There is no minimum deposit requirement to open USAA brokerage accounts as well as no minimum account balance requirements. Broker does not charge maintenance or inactivity fees for all accounts.


USAA Brokerage New Account Setup

USAA brokerage (member of SIPC) accounts can be created without having to deposit funds first or pass USAA member eligibility - anyone can open an account. When user creates an account, he or she will be asked how much they want to invest, and if they are not ready to deposit funds, they can enter "0" and proceed. Account opening is fast, usually taking around 10 minutes to complete.


USAA Mutual Funds


USAA Investment Services offers around 50 house branded index and mutual funds. 28 of those funds hold 4 or 5 star ratings from Morningstar, a company that reviews mutual funds for stability, returns, and fees. A common complaint is that the USAA funds are expensive when compared to competing products from discount brokerages. This is true, as many of the funds carry expense ratios above 0.6%. This means that an investor will be paying $6.00 a year for every $1,000 they invest in the fund. That does not sound like much, but after years of investing these fees can take up a significant amount of money.

In 2014 USAA entered into an agreement with National Financial Services, the trading platform that forms the backbone of Fidelity. The website still looks the same to USAA investors, but investors now have access to all of Fidelity’s commission free fund offerings. Instead of paying 0.28% to buy the USAA branded S&P 500 index fund, you can now buy the discount Fidelity S&P 500 fund for just 0.09%. USAA members can buy dozens of Fidelity fund offerings with rock bottom expense ratios. For those looking to buy actively managed funds, USAA members can now buy positions in the famous Fidelity Contrafund and dozens of other well regarded Fidelity offerings without paying a cent in commissions.

There are still compelling reasons to stick with USAA branded funds, even though they are typically more expensive than their Fidelity counterparts. The USAA funds have very low minimum investments, you can start investing in most for as little as $500 if you set up a monthly deposit of at least $50. For brand new investors or those wanting to keep their financial house all under one roof, it may make sense to stick to the USAA funds.


IRAs


Because USAA is a full-service brokerage, they also offer special tax advantaged accounts. Roth IRAs, 529 college savings accounts, and annuities are all sold through the USAA Marketplace platform. The fact that USAA members now have access to Fidelity’s offerings and USAA’s product line makes the USAA brand a decent player in the retirement investment world.

There are no annual, maintenance or inactivity fees for USAA IRA accounts. Closing a retirement account at this broker will cost a customer $35.


USAA Brokerage Website/Trading Platform/Tools


Website

The USAA system looks dated are very minimalistic. Their trading platform resembles older versions of E*Trade and Ameritrade. USAA does not provide the support that high volume day traders or those performing market analysis are likely to demand, but it does provide a very simple way for most retail consumers to buy and sell mutual funds, stocks, bonds, and ETFs. If you are an active trader, USAA is probably not the best platform to serve your needs.

USAA brokerage offers stock and mutual fund screeners, interactive chart data, detailed company information and summaries, as well as interactive retirement and investment calculators. Though the firm have made significant gains to improve these tools in recent years, overall, we would rate their tools and resources as average to slightly below-average.

The stock and mutual fund screeners are simple to use but a little user-unfriendly if trying to make quick modifications or corrections to the search criteria. The interactive charts provide good information but lack the substance to gain a quick and concise understanding of the company or product being examined. It seems all the right content is there for a user to use but the overall feel of the resources would be best described as slightly disorganized.

USAA Brokerage Review


Advanced Trading Platform

Unfortunately, USAA investment services does not offer professional level trading platform which is available at many online brokers, such as TD Ameritrade, Etrade, Charles Schwab, and Interactive Brokers.


Mobile Trading

USAA mobile smartphone application is available for iPhone, Windows, Android and Amazon Fire. It allows clients to see real-time quotes, place trades, read articles, watch videos related to investing, and deposit checks directly into eligible investment accounts. The app is rated very highly by the users in Google Play and iTunes stores: 4.5 stars out of 5.

USAA Investments Review


USAA Managed Accounts


Like their mainstream competitors, USAA offers a financial advisory service for a fee that ranges between 1.10% and 0.9% of your account balance. This fee falls in line with what market competitors, like Chase Private Client, charge. This optional service requires that you invest at least $25,000 with USAA and entitles you to personalized account advice that considers your taxes, goals, age, and personal situation. Customers used to an involved relationship with their investment advisor may find this service comforting. For many retail investors, it likely is an expense that can be avoided without much downside. This is especially true for people making use of Target Retirement funds.


Customer Service


USAA did not grow to its current size of 11.4 million members and $24.4 billion in annual revenues by only providing highly competitive prices on insurance and financial services. It got there by providing world class customer service and convenience to a customer base that is highly mobile, often deployed, and in need of serious support. Does this service apply to the brokerage side of USAA’s business?

It does, somewhat. On the good side is USAA’s tech based support. Unlike many other brokerage houses, USAA is willing to conduct their business entirely through a secured webmail service that is internal to the USAA website. This may not be a big deal if you have constant access to a cell phone, but for servicemembers who may not be able to make a phone call for weeks or months at a time, this service may mean the difference between living with a major account error and having things corrected in time. USAA also offers enormous support for deployed service members, is willing to work with people designated as an account holder’s power of attorney, and has enormous protections for clients who are accessing accounts from overseas. Simply put, USAA presumes you are right and will act to protect you and your money even when you are unable to do so.

USAA investment services is not ideal for those looking for a face-to-face customer service experience. Unlike large brokers, USAA only has two physical locations and customer service for brokerage clients at the San Diego branch is done entirely through video teleconference. While this is likely not a problem for younger, tech trusting clients, it may pose a serious hardship for traditional clients who are seeking a relationship with their investment banker, for those seeking a fiduciary for financial advice, or for high net worth clients who want comprehensive advice from a full-service firm.


USAA Investments Review: Pros


  • Excellent mobile app
  • No account maintenance, inactivity or hidden fees
  • Great customer service
  • Good banking services
  • No-fee IRA accounts


USAA Investments Review: Cons


  • Higher than average commissions
  • Additional $0.01 per share is charged for stocks priced under $1
  • Basic trading tools
  • Few educational resources
  • Limited research services


USAA Investments Review Summary


USAA investment services is offering commissions that are higher than the average in the industry: $8.95 per trade on stocks and ETFs, and $45 per mutual fund transaction. However, USAA's own mutual funds can be traded commission free.

USAA brokerage doesn't have surcharges on extended hours trading or large orders, but does charge additional $0.01 for each share on stocks priced under $1. There are no account maintenance or inactivity fees for both IRA and non-IRA accounts. In general, the company has very few fees when compared to multi-page lists of fees at some other brokerage houses. The list of all USAA brokerage fees is located here.

USAA is not a firm for traders looking for sophisticated trading tools or investors looking for varied investment research from multiple sources. Their trading tools are basic and the company does not offer an advanced trading platform found at many competitors.

USAA is known for competitive banking services and insurance products which are available not just to military and their families but also to the general public. The services include completely free checking account, low rates on car insurance, as well as credit cards with cash, gas and groceries awards.

To summarize our USAA brokerage review: higher than average commissions make the company a good option only to investors who want to complement USAA's banking and insurance products with an ability to invest in mutual funds, stocks and ETFs.


Open USAA Brokerage Account


Open USAA Account



USAA Brokerage reviewed by Brokerage-Review.com on . Rating: 3




Copyright ©2009-2017 Brokerage-Review.com. All rights are reserved.
Brokerage-Review.com has relationships with other companies. See Terms of Use.