Inside JPMorgan’s strategy to hire hundreds of remote advisers

Inside JPMorgan’s strategy to hire hundreds of remote advisers

Since the onset of COVID-19, investors have become increasingly comfortable receiving advice through videoconference or phone calls

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.” 

Recent Articles by Author

Cetera zeroes in on user experience with Riskalyze

Cetera zeroes in on user experience with Riskalyze

The broker-dealer is leveraging its enterprise partnership with Riskalyze to automate risk management and enhance customer experience, which are now available to Cetera’s network of 8,000 advisers via the AdviceWorks platform.

Wealthfront claims M1 Finance spied on client research sessions

Wealthfront claims M1 Finance spied on client research sessions

The robo-adviser claims that at least one M1 employee lied about employment in order to get information about Wealthfront products and listen in on direct feedback from clients.

What the Biden administration really means for fintech

What the Biden administration really means for fintech

While conventional wisdom suggests a Democratic administration will move to strengthen regulations, there's potential for focus on how fintech can be used to help accomplish the new administration’s goal of expanding access to financial services.

Wealthtech funding hits record $3.7 billion in 2020

Wealthtech funding hits record $3.7 billion in 2020

Investments in wealthtech are expected to increase this year as millennial-friendly brokerages acquire large customer bases and expand product offerings. Industry trends including increased interest in sustainable investing and API integrations will serve as a catalyst for wealthtech funding through 2021.

Goldman Sachs to expand Marcus Invest internationally in 2021

Goldman Sachs to expand Marcus Invest internationally in 2021

The Wall Street bank’s entrance into robo-advice may be late, but CEO David Solomon outlined how the platform will be able to compete in a crowded marketplace

X
X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print