When JP Morgan announced that it was moving to integrate its JP Morgan Securities unit into the Private Bank several eyebrows were raised. Those eyebrows were directed at issues such as payout and overall comp as opposed to decision making with HNW and UHNW accounts.
BrokerChalk has learned, based on conversations with several JP Morgan Securities sources, that a nefarious process has emerged that aims to snatch large accounts from advisors and move them to the private bank – with zero input from the advisors themselves.
As the process was described to us, JP Morgan Securities Advisors we’re asked to fill out forms giving significant detail to accounts they held that were larger than $5M. Not only the assets held in the account, but the annual revenue produced by the accounts and other key metrics. Once that activity was completed those clients were approached by a division in the bank known as JP Morgan Integration. That unit made it known to accounts larger than $5M that their assets would now be held at the JP Morgan Private Bank, and be taken away from JP Morgan Securities and their advisor. **Readers Digest version: JP Morgan is stealing accounts from advisors at their corporate discretion.
You can imagine the alarm bells that are going off with some of the largest JPMS advisors across the country. Many are scrambling in talks with recruiters to find a suitable competitor to transition to as quickly as possible. Working for a firm that will steal accounts from you at any moment, and frankly, go directly to the client to do so is incredibly disturbing.
One advisor we spoke with at JPMS had this to say:
“The process here is really, really shady. It was sold to more than a third of us that we were being tabbed to create a new ‘elite’ division, not unlike Merrill’s PWM group. Instead, once we finished reporting on our larger accounts, I got reports of clients getting emails from a JP Morgan ‘integration’ unit letting them know that their account was being moved to the Private Bank. Stunning.”
”What I am left with is a million questions. If the bank can indiscriminately take accounts from me how in the hell do I trust them with anything else? It’s impossible. Totally impossible.”
We’ve heard plenty of stories of JP Morgan being the worst offender when it comes to pushing proprietary product and being miles away from the execution of even a ‘best interest’ standard. In other words, institutional arrogance. But taking it this far, stealing the largest accounts from advisors in one of its divisions? And doing so by going directly to the client? Insane.
You can expect the exodus of larger advisors and teams at JPMS to accelerate over the next 3-6 months. Asking advisors to fill out stat sheets on their biggest clients so the bank can kidnap them – wow, just wow.
