JPMorgan Chase & Co. (JPM) said on Thursday that it plans to double its advisor count to 1,000 in the next five to seven years and expand its wealth management service offerings to wealthy Americans, as per a Bloomberg Quint report. Shares closed down 1.3% at $150.93 on July 22.
The Advisors division currently has around 450 advisors, which means JPM has set a very aggressive target of hiring more than 500 brokers in a short period. The firm may achieve this by either poaching from competitors or taking over smaller boutique firms. (See JPMorgan Chase stock charts on TipRanks)
All of the big U.S. banks are vying to capture the growing needs of the nation's wealthiest by increasing the services offered and employing more advisors in the business.
JPMorgan Advisors remains a relatively small player. It is separate from the firms’ Private Bank and Chase Wealth Management units, which have around 4,000 advisors working in the bank's branches.
Phil Sieg joined JPM in April from Bank of America to lead the JPMorgan Advisors division. Sieg said, “We’re investing in this business. It’s really good for the teams because it’s giving them capacity.”
The firm's plan also includes appointing a “concierge” to each team of advisors who will help them transition smoothly into the firm and help with interconnectivity between its commercial and investment banking arms.
Currently, in San Francisco, the bank is formulating an intra-bank referral program, wherein advisors from the Wealth Management unit refer customers to the JPMorgan Advisors unit and vice-versa. The bank plans to roll out the program first in New York, followed by a nationwide launch.
To increase focus on the firm’s wealth management team, the bank has hired Jessica Douieb from Goldman Sachs Group (GS) as the head of wealth partners and brought in Mollie Colavita from Bank of America Corp. (BAC) as head of its practice management division. Kevin Hale took over the marketing head role for both Chase Wealth Management and JPMorgan Advisors.
Today, Goldman Sachs analyst Richard Ramsden lowered the price target on the stock to $184 (21.9% upside potential) from $188 while maintaining a Buy rating.
Overall, the stock has a Moderate Buy consensus rating based on 8 Buys, 5 Holds, and 1 Sell. The average JPMorgan Chase price target of $171.42 implies 13.6% upside potential to current levels. Shares have gained 52.5% over the past year.
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