WaMu buy gives JPM 15% of bank-broker market

Sep 26, 2008 @ 4:17 pm

By Evan Cooper

Accounting for roughly 10% of the nation’s retail-securities business done at banks, JPMorgan Chase & Co. is set to become even more dominant in that segment once it completes its $1.9 billion takeover of Washington Mutual Inc.

WaMu Investments Inc., the Irvine, Calif.-based broker-dealer of the Seattle-based bank holding company, employed 460 Series 7-licensed brokers, 535 Series 6-licensed platform representatives, 207 sales assistants and 36 managers at the end of last year, according to Scott Stathis, managing director at, a research firm based in Windsor, Conn., that specializes in the securities and insurance business of banks.

JPMorgan Chase has 2,000 Series 7-licensed reps and 10,000 Series 6 reps, he said.

“WaMu accounts for about 5% of bank brokerage,” said Kenneth Kehrer, a principal with Kehrer-LIMRA.

“The two banks do comparable kinds of business, mostly mutual funds.”

At WaMu, variable annuities account for 49% of revenue, mutual funds 42% of revenue and the remainder in life insurance and fixed annuities, Mr. Stathis said.

Standing to lose out from the acquisition is Boston-based National Financial Services LLC, which provides transaction services for WaMu. New York-based JPMorgan Chase has “a robust self-clearing platform,” according to Mr. Kehrer, who believes that WaMu’s clearing business eventually will migrate there.

National Financial declined to comment on its business relationships and JPMorgan Chase did not return a request for comment.

A call to WaMu Investments on Friday was referred to corporate headquarters in Seattle, where phone lines were overwhelmed by callers.

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