As in so many other areas of the bank’s franchise, JPMorgan’s wealth management performance in 2023 was a good illustration of the unique qualities of the US’s preeminent banking institution. It is North America’s best bank for wealth management.
The superlatives are hard to avoid. The bank’s asset and wealth management division pulled in nearly half a trillion dollars of net new money in 2023, a feat it attributed in part to investors seeking a haven in the turmoil of the US regional banking crisis in March 2023. JPMorgan says it pulled in client flows at twice the rate of any other publicly listed rival.
Client investment assets rose 25% to $800 billion, even before the acquisition of First Republic Bank through a process managed by the Federal Deposit Insurance Corporation at the end of April 2023. JPMorgan ended 2023 with $950 billion in client investment assets, just shy of its long-term goal of $1 trillion.
“Our industry-leading growth of client assets is a testament to our unwavering commitment to delivering on our fiduciary responsibilities and dedication to serving clients’ best interests,” wrote JPMorgan’s chief executive of asset and wealth management, Mary Callahan Erdoes, in the bank’s annual report for 2023.
Within JPMorgan’s asset and wealth management division, revenues in the global private bank rose 20% to $11.7 billion in 2023, about 7% of the bank’s total revenues. Client advisers rose 12% to 3,515. In our private banking awards in March, Euromoney named JPMorgan Private Bank as the best in North America and in the world.
But the business goes beyond the private bank: within the firm’s consumer and community banking division sits JPMorgan Wealth Management, a less rarified unit that the bank set up four years ago. Taking that into account, client assets rose 30% to $3.2 trillion in 2023, while the number of client advisers rose 10% to nearly 9,000.
Wealth management relationships, as measured by unique families, have soared. Since before the pandemic they have risen 60% to about 2.5 million. The bank said the 120,000 investors who came to it for the first time in 2023 was a record for the firm.
Many investors are coming to the bank through Wealth Plan, JPMorgan’s financial planning platform that enables them to explore their options online and then have that process seamlessly integrate into a conversation with a client adviser. The bank launched it in December 2022, and during 2023 about one million plans were created.
The superlatives are hard to avoid. The bank’s asset and wealth management division pulled in nearly half a trillion dollars of net new money in 2023
The bank has come a long way since the days when it used to neglect wealth management. As JPMorgan chief executive Jamie Dimon told shareholders in his annual letter for 2023: “We underinvested for years in the wealth management business because we were always focused on the value of deposits versus investments.”
Today he uses it as an example of how wrong thinking can become entrenched unless people “question everything”.
For Erdoes, everything starts with investment performance. At the bank’s investor day in May 2023, she argued that the rest followed from that: investment performance leads to growth in assets under supervision, which leads to revenue growth and then profit growth. In 2023 each of those was a record for her business.
And for all the striking numbers that JPMorgan can boast across the wealth management franchise, the one that Erdoes picked out for special recognition was managed assets at Chase Wealth Management, one of the units of JPMorgan Wealth Management, which has grown 14-fold over the last 10 years to stand at $224 billion.
“I promise you we have only begun to scratch the surface there,” she added.
