USAA Investments Review 2018

By Claire Boyte-White  | January 23, 2018

A brokerage company built for military personnel and their families, offering banking, advisory services, and a robust trading platform.

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Overall Rating

3.5/
5.0
Products & Fees
3.3
Trust
4.2
Special Features
0.8
Desktop Experience
3.5
Mobile Experience
4.2
Customer Support
3.8
Research & Insights
3.9
Education
3.2
Banking
5.0

USAA Investments Fast Facts

Started as a small syndicate of 25 military officers who agreed to insure one another's cars in 1922, USAA has grown into one of the largest financial institutions in America. It now supports military personnel and their families with a wide range of services and products -- from banking and insurance to investment advice and retirement planning.

USAA has more than 11 million members and a sterling reputation in the financial industry, making it one of the biggest players in personal finance. Considered not just a top-rated institution but also a top-tier employer, the company has built a reputation for quality individualized service.

pros

  • One-Stop Shopping
    Banking, insurance, financial advice, and an investment platform, all in one place
  • Advisor Services
    Financial advisory services, both robo and human, are available to help users achieve their goals
  • No Monthly Fee
    Use of the investment platform is free
  • Advanced Charting
    Flash-enabled chart allows for in-depth technical analysis
  • In-Depth Education
    Morningstar-powered "Investing Education" section includes lessons and quizzes about ETFs, stocks, and mutual funds

cons

  • Higher-Than-Average Commissions
    At $8.95 per trade for stocks and ETFs, USAA's fees aren't particularly competitive
  • High Account Minimum
    There is a $3,000 minimum to open a new brokerage account
  • No Stated Fraud Policy
    There is no specific, written policy stating that funds lost due to unauthorized use will be refunded
  • Mostly Restricted to Military Members
    Full membership is available only to active or retired military personnel and their families (including adult children)
1922
Founded
11.4 Million
Number of Members
(as of 2015)
$128 Billion
Total AUM*
*(as of 2015)

Products & Fees

3.3

While USAA does provide a full suite of products and services, making it a convenient choice for investors, it's not exactly the cheapest brokerage around. The fee structure is simple, with no complicated tiered pricing, but there are certainly more economical choices available.

  • Stocks & ETFs
    $8.95/trade
  • Options
    Base Pay + $0.75 per contract
  • Mutual Funds (No Load)
    $45
  • Bonds (Broker-Assisted Only)
    $45
  • US Treasury Securities
    At Auction
  • Futures
    Not Available
  • Forex
    Not Available

Trust

4.2

Like any good brokerage, USAA is a member of both the SIPC (Securities Investor Protection Corporation) and FINRA (Financial Industry Regulatory Authority). In addition, it is a member of the Investment Company Institute and the Financial Services Roundtable, two organizations that focus on making improvements in the financial services industry and advancing public education about investing. However, USAA does not have any formal policy with regard to fraudulent account activity.

$250,000
Total Cash Insured
(Per client sublimit for cash claims)
$500,000
Total Securities Insured
(Per client aggregate limit for all claims)

What you need to know

USAA takes online-account security very seriously, using cookies and TLS encryption for both its public and client-only sites. Brokerage accounts have multiple levels of optional security, including security questions, codes, and tokens. The mobile apps even allow for biometric identification through fingerprint, facial, or voice recognition.

Special Features

0.8
special features

USAA's brokerage product isn't heavy on special features. While the platform is definitely functional and user-friendly, it isn't built for active DIY traders who want a full suite of in-depth research tools. However, the brokerage does provide a variety of advisory services to assist clients in reaching their goals with professional help. Financial advisors are available via online chat, and USAA has both robo and human portfolio-management products.

Digital Investment Advisor
Simple & Diversified Portfolio
(For 0.5% annual fee)
Personal Advisory
Managed Portfolios
(Human advisory services available for accounts of $25,000 or more)
High-level Advisory
Custom Portfolio Management
(High-level advisory services for accounts of $500,000 or more)

What you need to know

USAA doesn't have paper trading, backtesting, or advanced routing options, so this isn't the brokerage for advanced traders who like to dive into research and hone their strategies. Similarly, while it always tries to obtain best execution for all orders, there is no best-price or execution guarantee. USAA's primary offering is advisory services for investors with different financial goals and risk tolerances. With a somewhat minimalist platform and a variety of products aimed at retirement, education, and wealth-building investment goals, the USAA platform is designed to encourage users to choose a managed-portfolio option to maximize returns.

Desktop Experience

3.5
desktop experience

The USAA web-based platform is user-friendly and responsive. It doesn't have many bells and whistles, but it does have all the basic tools the average casual investor might need. Customizable charts allow for decent technical analysis, and a simple interface makes it easy to set up watchlists and alerts and navigate among pages. It's not ideal for more advanced investors, or those who need up-to-the-tick data, however.

Pros

Aside from being free, the biggest upside to the USAA platform is its simple user interface. Generally speaking, everything is exactly where you'd expect it to be, and getting from research to trade execution is quick and straightforward. You can easily see your account balances, order history, and portfolio performance upon log-in, and navigating to a quote or trade screen takes just one or two clicks. Much of the data is in real time, and users have effortless access to options chains and analysis.

Although the advanced chart requires a Flash plugin, it provides a good selection of studies and indicators, as well as the option to compare other tickers or indices. The platform also offers a fairly robust selection of educational and research resources.

Cons

This platform's primary drawback is its lack of advanced features or consistent streaming data. While the Flash-enabled "interactive" chart is a great tool, there are no other features for in-depth analysis or advanced strategies. Users cannot place conditional orders or trade fractional shares of stock.

While most quotes come up in real time, this isn't true across the board, and the interactive Flash chart--the most robust tool available--displays data delayed by at least 15 minutes. In addition, even real-time data isn't streaming--everything requires a manual refresh. Again, this platform isn't built for day traders or others who want to have their finger on the market's pulse.

Mobile Experience

4.2
mobile experience

Like its web-based platform, USAA's mobile site and apps are easy to use and highly intuitive. Though they lack the full functionality of the online trading platform, they allow users to execute trades, read news, and check on account information from any location. What's more, the mobile apps provide even greater security than the website by offering biometric-identification features.

Pros

Although it may seem like a small detail, one of the best things about the iOS mobile app is its variety of quick log-in options. Once your app is linked to your account, you can set up facial or voice recognition, use your saved fingerprint, or just use your PIN. After logging in, you can easily see your investment accounts, insurance policies, and other USAA products, along with your account balances and premiums. You can transfer funds, pay bills, deposit checks (using your phone's camera), view charts and news for any ticker, and place trades with just a few clicks. Clicking the "Help" link automatically connects you to a live chat with a USAA rep. The "More" section of the app menu takes you to an extensive menu of resources, such as an ATM finder, loan-payment calculator, and educational tools for those looking to buy or sell a home or car.

The mobile website has a few additional options not available on the apps, including the ability to pull up documents related to any of your USAA accounts, as well as transcripts of any customer support chat conversations you've saved.

Cons

Like most mobile offerings, USAA's app and mobile site are not as robust as the full web-based platform. While the chart on the iOS app does allow for a few comparative studies and indices -- somewhat rare for a mobile chart tool -- it's not nearly as extensive as the Flash-enabled version. Similarly, the app has a decent selection of relevant news, but the feed is not searchable.

Customer Support

3.8

USAA makes customer support a priority, and offers a number of ways for both current users and non-members to get in touch. The "Help" function on the website is very useful--one click and a chat box opens with options for speaking to someone, reaching the Support Center or Security Center, or finding an ATM. Depending on your selection, you'll be provided with the relevant info, redirected to the page you need, or connected to a representative.

USAA also offers specialized phone services for the hearing impaired, as well as several other accessibility-focused features for users with disabilities.

What you need to know

While phone lines are staffed only Monday through Friday, 7:30 a.m. to 8:00 p.m (CT), and Saturday 8:00 a.m to 5:00 p.m. (CT), USAA's Twitter account is moderated 24/7. Both the Twitter and Facebook accounts are updated regularly with articles and information aimed at military-service members and their families. Though they are not focused on brokerage support, an active online question-and-answer forum and a YouTube channel, both maintained by USAA, aim to foster a sense of connection among its members

Research & Insights

3.9

While the USAA platform is somewhat lacking in high-tech features, its research materials make up for that. From news to analyst ratings, option chains to stock screeners, the web-based platform has ample resources for investors who want to take a broader look at the overall market or drill down to find opportunities that match specific criteria.

Industry and Sector News
Learn about what's happening in the industries you invest in
Mutual Fund Screener
Dedicated online trading platform for bonds and other fixed-income securities
Financial Statements
Look at historical financial data to assess a company's financial health
Global News
Get a broader view by reading up on international markets
Stock/ETF Screener
Find investment opportunities based on specific criteria
Market Events Calendar
Stay on top of earnings reports and other important dates

Pros

USAA doesn't have any additional "advanced" platforms, so all of its tools and resources are included in the free web-based interface. The user-friendly layout allows investors to easily find information on anything from company fundamentals to global-market news. The Flash-enabled chart includes a number of studies and indicators and is a cinch to customize and save. Screeners help users identify investments based on their own criteria, and the Markets News and Research section has information on big market movers, sector and index performance, and upcoming market events.

Separate "Research" tabs for Stocks, Mutual Funds, and ETFs provide additional information on which securities are making the biggest moves, which have been upgraded or downgraded by analysts, and which tickers are seeing the biggest volume

Cons

Because not all the data on the USAA platform is real-time, the research resources may be hit or miss for traders who need up-to-the-tick information. The current suite of research tools, while fairly extensive, is still aimed at long-term buy-and-hold investors, rather than day or swing traders. In addition, while options trading is supported, there are no screeners for options and only limited quote information in addition to the basic chain.

The USAA online community is pretty active, but it is focused on providing general support for military personnel and their families, not on in-depth investment advice or analysis. The research articles do not have comments sections or other means for users to gauge social sentiment.

Education

3.2

The "Investor Education" section of the platform provides educational articles on five broader topics: Retirement, Education Savings, Investing Principles, Taxes, and Personal Finance. A secondary education resource is powered by Morningstar and provides a thorough curriculum to educate newer investors on mutual funds, stocks, and ETFs through a series of lessons and quizzes. This section is, confusingly, not found in "Investor Education." You must access it through the general "Products" page. The upside of this layout is that the Morningstar Classroom is available to the public.

Morningstar Investing Education
Back to School
(Learn about stocks, ETFs, and mutual funds, from basics to advanced topics)
Investing Articles
Target Your Goals
(Filter by topic, difficulty level, publishing date, and source)
Morningstar Market Commentary
Check-in With The Pros
(Get insights from USAA portfolio managers and Morningstar analysts)

What you need to know

Like other large brokerages, USAA is focused on long-term investors and those looking to plan ahead for retirement. The site offers a good selection of educational resources on multiple topics, but mutual funds, ETFs, retirement investing, and educational savings are covered in greater depth. Since USAA also offers in-house mutual funds and ETFs, the site's educational resources are, unsurprisingly, aimed at encouraging investment strategies that include those securities

Banking

5.0

Unlike some of its competitors, USAA was built to be a full-service financial institution. In addition to its online brokerage, USAA also offers retirement accounts, basic banking services, credit cards, insurance, and loans. While only military personnel and their families (including adult children) can take advantage of all of USAA's products, some -- like investment accounts and life insurance -- are available to the public.

Retirement Accounts
Save For The Future
(Open an IRA, roll over existing accounts, or invest in annuities)
Get Low Interest Rates
Credit Cards
(Get cash-back cards, rewards points, interest rates as low as 7.9%)
Loans
Finance Big Purchases
(Conventional and V.A.-back mortgages, auto loans, and personal loans are available)

What you need to know

If you or an immediate family member have "honorably served" in the U.S. armed forces, and you're looking for a one-stop financial shop, USAA may just be the brokerage for you. Tailored specifically to the needs of military personnel, USAA is uniquely prepared to help members take advantage of military-focused financial perks, such as V.A. loans and reduced interest rates for active-duty members.

Bottom Line

o For civilians without a family member in the military, the complete suite of USAA membership perks is, sadly, out of reach. However, membership eligibility also extends to adult children of anyone who has ever had a USAA auto or property insurance policy, which means you could get grandfathered in to USAA without having served. Even better, USAA has recently extended its investment, life insurance, and shopping-discount products to non-military consumers. So, while you may not be able to have your banking, mortgage, and brokerage accounts all in one place, you can still take advantage of the free investment platform, regardless of military service.

If you are eligible for membership and aren't looking for a day-trading platform, the free USAA product is worth considering. While the lack of consistent real-time data and absence of high-tech features make it a poor fit for very active traders, both the web-based and app-based platforms are more than serviceable for the average investor. With ample research and educational resources, and a wide range of other financial products, USAA makes it easy to take care of all of your financial and investing needs in one place.

Claire Boyte-White
Reviewed by Claire Boyte-White

Claire has been writing about retirement planning, tax policy, investing and corporate finance for over a year. After leaving her career in the insurance industry working for high-profile clients, Claire decided to pursue a career in writing. Her keen attention to detail and head for numbers has made her a perfect fit for Investopedia.

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