In a move that should send chills down the spine of every JP Morgan Securities advisor, bank brass has decided to fold the traditional wealth management arm into the banks ‘private banking’ arm. We’ve seen this particular movie before, and it doesn’t end well.
A little background here – the private bank advisors at JP Morgan are compensated via a salary and bonus structure. And are highly incentivized to peddle JPM banking products. A seriously stark contrast to the traditional ‘wirehouse’ trappings of JPMS.
“J.P. Morgan Securities’ approximately 450 brokers are being combined into a single J.P. Morgan Chase & Co. business unit weighted by salaried bank-based wealth advisors, employees were told in memos and internal phone calls on Wednesday afternoon.”
“ The new U.S. Wealth Management business will include 4,000 advisors in 3,500 bank branches and the 450 brokers in 21 J.P. Morgan Securities offices, together with employees of the bank’s fledgling YouInvest online brokerage business. It will be led by Kristin Lemkau, most recently J.P. Morgan Chase’s chief marketing officer, who earlier worked at the bank as a public relations official.”
A significantly bigger concern than any compensation changes is this: many, if not all, of JP Morgan’s private bankers have ironclad employment contracts that include garden leaves, non-compete and non-solicit language – to say nothing of their lack of inclusion in the broker protocol.
JPMS advisors should be appropriately concerned what the next 12-18 months may hold for their careers. Expect JP Morgan to tighten their grip on their clients and revenue. Via comp changes and legal maneuvering. Expect it.