Inside JPMorgan’s strategy to hire hundreds of remote advisers

JPMorgan Chase’s wealth management division is hiring hundreds of advisers across the country over the next two years in an ambitious move that’s aimed to bolster its digital-advice business model.

With its newly minted National Branch, investors with simple investing needs will get dedicated advisers and be able to interact with them remotely over video and phone calls, according to JPMorgan. While these remote advisers will be fully licensed in the same way as a branch adviser, they will be geared toward helping investors will fewer assets to invest. 

While the offering will come with an asset minimum, the firm did not disclose the fee schedule for the new offerings.

Notably, the remote advisers will receive a salary bonus to offset any potential impacts the new model will have on advisers who are commission-based, according to a source from JPMorgan who was not authorized to talk about compensation.

The bank’s wealth management division has 3,500 branches and 21 offices across the country. 

JPMorgan is tapping a broader market of investors by filling the service gap for clients who don’t need a full-time financial adviser but still have questions about investments, said Alois Pirker, research director of wealth management at Aite Group. “This is where the industry is heading — a hybrid approach to advice — and with all the pressures sitting on advisers, I think more firms will shift to this remote advice model.”

The initiative will be spearheaded by recent hire Boaz Lahovitsky, the former head of Vanguard’s Personal Advisor Services, who was brought on as head of the wealth management, JPMorgan announced Monday. The new National Branch is meant to serve target investors whose needs fall between capabilities of a branch-based adviser and its robo-adviser You Invest.

“We are still nascent in providing video and phone-based advice to clients who prefer to be served that way all the time,” Kristin Lemkau, CEO of JPMorgan U.S. Wealth Management, said in a release.

While the details of the fledgling remote advice business will be worked out over the coming years, the big bank’s move to launch a remote offering for financial advice is just another example of how the industry is changing, said David Goldstone, head of research for Backend Benchmarking. 

“This tiered advice model allows a firm to introduce investing to young clients who are just starting to save and then provide an increasing level of service as their needs and wealth grow,” Goldstone said. “Banks are trying to expand cross-selling opportunities and increase their share of wallet with any given customer.” 

While the offering will mean increased competition in the advice industry, the move is part of a much larger trend, Goldstone said. “The surge of interest in younger clients and those with lower asset levels is a trend happening across the industry.”

The remote advice business also exposes the value proposition for human-led advice in a world that is heading increasingly toward remote communication since the onset of COVID-19, said Capco principal consultant Nikhil Sharma.

“Clients are becoming more comfortable with remote settings given the current circumstances,” Sharma said. “Hence, the location of the adviser is less relevant than before. Overall the virtual model is increasing the target market size.” 

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