First Republic Advisors – JPMorgan’s Priority is the Private Bank: Is This Enough Juice for You?

JPMorgan’s Private Bank initiated a new family office practice geared towards the UHNW. For First Republic advisors sitting in the wealth management arm of the business, this announcement brings some concern given that the firm’s attention seems to be focused on the Private Bank. 9 billion in AUM to wealth management after attrition and some funds diverted to other segments of the firm.

JPMorgan Private Bank currently works with approximately 40% of American families with net worth greater than $100 million. None of the FRB advisors are slotted to move to this platform, it will be formed from existing professionals at the firm, and a few added for unique expertise such as legal and accounting.

Jamie Lavin Buzzard who has been named as the Head of Investments and Advice for platform stated that the FRB deal “really hasn’t” had an impact on the strategy to form this family office platform which will partner with 23 Wall, a global team that liaises between the Private Bank and some of the world’s wealthiest families. William Sinclair added that, “The goal for the Private Bank is really to further its footprint in the market. We’re really just trying to capture the opportunity with more households and to meet this growing demand and be the bank of choice for the wealthiest households in this country.”

CEO Jamie Dimon’s remarks about the FRB acquisition continue to be about solving a crisis and putting an end to more banks falling from grace. It makes you wonder if the acquisition truly has been about crisis management without a proper vision of how FRB advisors and their clients are really an integral part of the firm. To date, the division has been kept separate and likely to remain so, meanwhile FRB advisors have to sit idly by watching the Private Bank and the family office platform getting all the juice.

This is purely a case of where JPMorgan is choosing to put its focus – largely driven by profitability. The Private Banking model is more profitable, advisors are paid salary plus bonus, whereas the JPMA division is 50% commission based and is less profitable. Both divisions have access to the same suite of family office services the firm offers, it’s just simply that the firm would prefer business be slotted through the Private Bank instead of via JPMA/

For FRB advisors the question is if the lack of attention and support from the firm is good enough to endure.