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JPMorgan adds advisors, even without counting First Republic influx

By Dan Shaw
July 14, 2023 1:20 PM
JPMorgan 2 by bloomberg
Bloomberg News

Even without including the incoming brokers from  its acquisition of First Republic Bank this spring, JPMorgan Chase's financial advisor headcount increased slightly in the second quarter. 

The number of advisors working  for JPMorgan Wealth Management and the firm's Global Private Bank unit increased by a net gain of 53 brokers from the first quarter, rising to a total of 8,367, according to the firm's July 14 earnings report. That figure does not include the advisors who joined as part of JPMorgan's May takeover of First Republic. Representatives for the firm declined to say how many former First Republic advisors remain on staff.

First Republic's website still lists 200 employees as either "wealth managers" or "wealth advisors." At the time of acquisition, the site had shown 236 employees in its Private Wealth Management division, including 219 who held the job title of wealth manager and 17 who were wealth advisors.

JPMorgan has been trying to persuade them to stay. Despite those attempts, the bank has watched some advisory teams leave for large Wall Street rivals like UBS Group as well as smaller firms. 

Regardless of the headcount for former First Republic advisors, the acquisition of the regional bank added $150.9 billion in client investment assets in JPMorgan's wealth management division. That helped boost the total to nearly $2.86 trillion.

Read more: ETFs dethrone mutual funds among financial advisors

To see the main takeaways from JPMorgan Chase's second-quarter earnings, scroll down the slideshow. For coverage of the firm's first-quarter earnings, click here. For analysis of the wealth arms' results for the fourth quarter, click here.

Note: The firm doesn't break out certain wealth management numbers for its entire organization, which includes the Global Private Bank in its Asset and Wealth Management division and J.P. Morgan Wealth Management, which is part of the Banking and Wealth Management unit.

Wealth management results

JPMorgan's Consumer and Community Banking division, the parent of its Banking and Wealth Management unit, reported net income of $5.3 billion, up 71% from $3.1 billion year over year.. 

The Banking and Wealth Management unit generated revenue of $10.9 billion, which is up 67% from $6.5 billion year over year. 

Higher interest rates pushed up the  division's earnings.  Increased headcounts and wages drove the division's expenses.

Private bank results

JPMorgan's Asset and Wealth Management business, which includes the private bank, also saw a boost from the acquisition of First Republic. It reported $1.22 billion in net income, of which $119 million came from First Republic. Without that infusion, the total was up 10% year-over-year.

The unit's revenue climbed nearly 15% year over year to $4.94 billion, out of which the former First Republic contributed $303 million.The private bank's revenue surged nearly 30% to $2.8 billion.

Higher margins on deposits and rising management fees from asset inflows boosted the unit's business in the quarter, according to the firm.

Wealth management advisors

The number of financial advisors in the Banking and Wealth Management business rose to 5,153 in the second quarter, up less than 1% from the previous quarter's 5,125. The headcount was also up 5% from 4,890 in the same quarter last year. JPMorgan announced plans in May to hire roughly 1,300 new advisors over the next three years.

Private bank advisors

JPMorgan's Private Bank had 3,214 client advisors in the second quarter, a less than 1% increase from the 3,189 headcount for the previous quarter. Still, the total was up from 2,866 in the same quarter last year, a 12% increase.

Client assets

Altogether, the firm ended the second quarter with $4.6 trillion in client assets across all its wealth units.That was up a whopping 21% from the $3.8 trillion year-over-year. The increase was the result in part of fund inflows and improving market conditions.

The Banking and Wealth Management unit reported its client investment assets increased by 42% year over year to $892.9 billion in the second quarter. The private bank had $2.17 trillion in total client assets, up 24% from $1.75 trillion a year ago.

Remark

"The U.S. economy continues to be resilient," CEO Jamie Dimon said in a statement. "Almost all of our lines of business saw continued growth in the quarter. … Asset & Wealth Management had record long-term inflows of $61 billion, with inflows across channels, regions, and asset classes."
Dan Shaw
Reporter, Financial Planning
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