J.P. Morgan's online brokerage platform not meant to disrupt
J.P. Morgan Chase's anticipated launch of an online brokerage platform is not so much about disrupting the industry as it is about being responsive to customers, Jamie Dimon, the bank's chairman and CEO, told analysts during the company's third-quarter earnings call on Thursday.
J.P. Morgan Chase is testing several trading and investing platforms and will at some point be talking about "what might or might not work," he said.
Dimon declined to provide analysts with a strategic view of online platforms, saying only that he "looks at all of those things from the client perspective." The bank would give more insight at a later date, probably around Investor Day in February, he said.
In his letter to shareholders this year, Dimon listed self-directed investing and electronic trading among the fintech initiatives the bank planned to roll out in 2017.
Whatever direction the bank ultimately takes, its global wealth management businesses appear to be thriving, according to its latest earnings results.
Global wealth management, which includes both J.P. Morgan Private Bank and J.P. Morgan Securities, generated $1.7 billion in third-quarter revenue, up 7% year-over-year. Revenue, however, was flat from the previous quarter.
For the first nine months of 2017, the bank's global wealth management businesses brought in $4.9 billion, up 8% from $4.5 billion the year before.
The bank posted its first increase in the number of wealth management client advisors after two years of attrition in its advisor force. At the end of the third quarter, the two units employed 2,581 advisors, up a modest 1% from last year.
Assets under management, meanwhile, were up appreciably, jumping 17% to $507 billion from $433 billion at the end of the third quarter of 2016.
Global wealth management is part of the bank's asset management business, which earned $674 million on $3.2 billion in revenue in the third quarter. In addition to global wealth management, the asset management business includes the bank's mutual fund and institutional business segments.
Separately, the bank's retail wealth management business, which includes its mass-affluent Chase Private Client offering, posted strong gains in client investment assets. At the end of the third quarter, the retail wealth management business had $263 billion in assets, up 13% from $232 billion a year earlier.
Overall, J.P. Morgan earned $6.7 billion, or $1.76 per share, in the third quarter, compared with earnings of $6.3 billion, or $1.58 per share, in the same quarter a year ago.
"J.P. Morgan Chase delivered solid results in a competitive environment this quarter with steady core growth across the platform," Dimon said.