JPMorgan Chase & Co. disclosed Tuesday that it has reallocated 881 employees from its asset and wealth management division to another business as part of a reorganization.
During the second quarter of 2020, the bank transferred the technology and support staff from the asset and wealth management division to the consumer and community banking division.
The move was part of an ongoing reorganization of JPMorgan’s U.S. wealth management business, initially announced in December. The bank is in the process of combining wealth management operations catering to affluent clients with its Chase bank branch-based financial advisory unit and its online brokerage You lnvest.
The total headcount of the bank’s asset and wealth management unit dropped to 22,949 in the second quarter from 23,830 in the first quarter as a result of the transfer.
The transfer didn’t involve any advisors. The bank ended the second quarter with 2,869 wealth management client advisors, down slightly from 2,878 in the previous quarter but up from 2,735 in the second quarter of 2019.
A JPMorgan spokeswoman tells FA-IQ the employees transferred were in “product, operations, digital” roles.
“We had to get the HR and finance pipes organized for the new business before we transferred these employees over,” she says.
In February, JPMorgan said it expects its U.S. wealth management division to be one of its main growth drivers over the next decade. In a powerpoint presentation at the time, the bank said the new division is expected to “expand [its] branch footprint to capture wealth opportunities in selected markets,” “increase advisors and boost productivity to accelerate growth” and “leverage technology to build new, efficient channels to better serve clients.”
The JPMorgan asset and wealth management division’s AUM reached $2.5 trillion in the second quarter, up 12% from the previous quarter and up 15% year-over-year, according to the company’s second-quarter earnings report. JPMorgan attributes the growth to net inflows into liquidity and long-term products.
Client assets ended the second quarter at $3.4 trillion, up from $3 trillion in the previous quarter and the second quarter of 2019, according to the report. The bank says the 8% decrease in net income was “driven by reserve builds.”
Net revenue in the asset and wealth management unit was $3.6 billion in the second quarter of 2020, or about the same as in the previous quarter and up 1% from the second quarter of 2019.
But provisions for credit losses, driven by reserve builds, shot up to $223 million in the latest quarter, up from $94 million in the first quarter of 2020 and just $2 million in the first quarter of 2019. That contributed to a drop in net income for the unit to $658 million in the second quarter of 2020, down from $664 million in the prior quarter and $719 million in the same quarter last year.
Expand branch footprint to capture wealth opportunities in selected markets Source: JPMorgan Chase & Co.
Increase advisors and boost productivity to accelerate growth Source: JPMorgan Chase & Co.
Leverage technology to build new, efficient channels to better serve clients Source: JPMorgan Chase & Co.
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