JPMorgan to Hire 1,000 Private Bankers, Executive Says
JPMorgan Chase & Co. plans to hire around 1,000 advisors in its U.S. private banking division to win more business from high net-worth clients, according to the head of its Wealth & Asset Management division.
The new hires would increase advisor headcount by 38% at a time when many large wealth management firms have significantly reduced recruiting. J.P. Morgan ended 2017 with 2,606 “wealth management client advisors,” about 100 more than 12 months earlier but well behind the 15,000 to 18,000 brokers and private bankers at rivals such as Bank of America and Morgan Stanley.
Mary Callahan Erdoes, who repeated her hiring goals for the private bank at a financial services conference on Tuesday, described the bank’s share of the high net worth market for clients with $3 million to $10 million, as “very small.”
She did not specifically discuss growth plans for the J.P. Morgan Securities retail brokerage unit of fewer than 500 advisors that the bank inherited from Bear Stearns during the financial crisis. Unlike the brokers in the unit who get a grid-based payout tied to the total fees and revenue they generate from customers, private bankers are salaried with a bonus supplement.
“[We’re] small relative to the biggest players but not necessarily on a profit basis,” Erdoes said at the Morgan Stanley Financial Services conference in New York. “There are only a few players that are left in the global private banking, non-commission-based, advice-driven business and that’s a really important business for us.”
Erdoes did not give a timeframe for adding the thousand new advisors, but in the company’s annual report in April she alluded to expansion plans in “both new and existing markets” that would include about 1,000 new private bank hires “over the coming years.”
The firm’s recruiting and training programs make J.P. Morgan advisors “among the top in the industry” by productivity, Erdoes wrote.
While so-called wirehouses like Merrill, Morgan Stanley and UBS have shrunk recruiting, other investment and commercial bank powerhouses that have not been big players in retail brokerage have also been staking out turf the wealth management. Goldman Sachs plans to grow the number of brokers in its private wealth management division by 30% to around 900, Chief Executive Lloyd Blankfein said in February. He also boasted that production of the brokers is “much higher than [at] our large bank competitors.”
Morgan Stanley Chief Executive James Gorman, whose purchase of Smith Barney between 2009 and 2012 vaulted the company’s wealth management unit to the largest in the retail brokerage industry, said at the firm’s conference on Tuesday that the cost-conscious firm is focusing on increasing productivity and efficiency through technology, not through additional hiring.
At JPMorgan, Chief Executive Jamie Dimon has enunciated a plan to double market share in Erdoes’ asset and wealth management division over the next decade. The firm’s market share of the U.S. high-net-worth private banking business is only 1%, he wrote in the April annual report.
Erdoes said at the Morgan Stanley conference that J.P. Morgan has an even smaller share of the wealth market outside the U.S. but has plans to package its wide-ranging lending, investment banking and alternative investment management prowess into a compelling package that will also attract “very sophisticated…super-wealthy” clients in Europe and Asia.