JP Morgan's Wealth Management Services in the EMEA

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JP Morgan's Wealth Management Services: EMEA

J.P. Morgan's wealth managers in Europe, Middle East, and Africa (EMEA) have the job role of creating and managing strategies in wealth planning, transfer, ownership, and philanthropy. They deal mostly with high-net-worth or ultra-high-net-worth individuals or families, but in some cases, they also transact with money managers and small businesses. The key challenges they face when onboarding clients appear to stem from complex tax and regulatory requirements and clients' evolving needs when it comes to technology. To compete with other private banks such as Credit Suisse, Julius Baer, UBS, BNP Paribas, and Pictet, and emerging competitors such as family offices and specialist or boutique advisory firms, J.P. Morgan's wealth managers must adapt to the new demands of its clients.

METHODOLOGY

Taking note of the information that was provided in the original response, we started off our research with a review of J.P. Morgan's businesses in EMEA. From the company's website, we learned that the company has three businesses in the region, namely, Asset Management, Private Banking, and Corporate & Investment Banking, and that of these businesses, Private Banking is the business that provides wealth management services to high-net-worth individuals. According to the company, private banking, with its advisory services, helps individuals and families of wealth to protect and grow their wealth across generations, creating the potential for them to achieve the vision they seek for themselves, their families, their businesses and their legacies." Investopedia also defines private banking as customized banking and financial services typically offered to high-net-worth individuals.

Checking the company's Private Banking webpages, we also learned that the company's private has four capabilities, namely, wealth planning, investing, lending, and banking. Given that wealth management services are of interest, we paid special attention to the private bank's wealth planning services to determine the job role of the company's wealth managers. We also examined the profiles of the company's highest-ranking wealth advisors in the region and the job postings of the company's wealth management business.

To find the main clients of the company's wealth management business in EMEA, we consulted the company's annual reports, investor presentations, and conference calls, and conducted a press search as well. Fortunately, we found a number of helpful insights from the company's latest annual report and Euromoney's latest private banking and wealth management survey, which we then used to determine the types of clients the company's wealth managers serve.

As for the main competitors and the key client onboarding challenges, we could not locate any information specific to J.P. Morgan apart from Euromoney's ranking of private banks. Searching through the company website, the company's press releases, and the reports and news articles covering the company did not produce the desired results. Euromoney's ranking of private banks offers clues as to J.P. Morgan's direct competitors, but it does not provide any details about new competitors or client onboarding challenges. As a result, we broadened our search and looked for regional or global reports on wealth management instead. We assume that regional or global trends more or less apply to J.P. Morgan in EMEA as well. Thankfully, this adjustment resulted in us finding Ernst & Young's global report on wealth management, Gerard Cohen's article on family offices in Europe, and Euromoney's article on wealth management. From these sources, we were able to gather insights about client onboarding challenges and new competitors.

JOB ROLE OF WEALTH MANAGERS

J.P. Morgan's Private Banking business in EMEA has offices in London, Frankfurt, Milan, Geneva, Zurich, Paris, and Madrid, with London being the regional headquarters. Facing clients are a team of bankers, investment specialists, lending advisors, client service specialists, trust officers, and wealth advisors. Wealth managers, or wealth advisors as J.P. Morgan calls them, have the role of creating and managing strategies in wealth planning, transfer, ownership, and philanthropy. They help clients evaluate choices, and they offer clients guidance on how to grow and preserve their wealth. They also help clients think through crucial questions touching on the ability to continue lifestyle, the things that need to be done to provide for family and future generations, and the establishment of a philanthropic legacy.

Wealth managers assist in succession planning, the analysis of projected outcomes, the evaluation of risks to wealth plan (such as spending rate, named trustees, and asset management), the evaluation of concentrated positions, the development of charitable-giving strategies, and the execution of wealth plan. They also work with trust officers in the protection of legacy. An analysis of J.P. Morgan's highest-ranking wealth advisors in EMEA, namely, Paul Knox (United Kingdom), Yannick Stehr (Germany), Achille Gennarelli (Italy), Agnès Le Ster (France), Regis Molowny (Spain), Philippe Piedon‐Lavaux (Switzerland), and Maya Prabhu (United Kingdom), reveals that J.P. Morgan's wealth managers assist in estate planning, succession planning, philanthropic needs, and strategic wealth planning.

MAIN CLIENTS

According to page 75 of J.P. Morgans's latest annual report, the company's private banking clients are high-net-worth individuals, ultra-high-net-worth individuals, families, business owners, small corporations, and money managers. (J.P. Morgan deals with the more affluent end of the client spectrum, while Chase deals with the less affluent end.) The focus on the wealthy and the ultra wealthy is evident in the results of the latest Private Banking and Wealth Management Survey of Euromoney, a business and finance magazine. Based on this survey, when it comes to private banking services for ultra-high-net-worth clients with investable assets of over US$30 million, J.P. Morgan ranks first in the Middle East and second in Western Europe. When it comes to private banking services for high-net-worth clients with investable assets of US$5 million to US$30 million, on the other hand, J.P. Morgan ranks fifth in the Middle East and sixth in Western Europe.

KEY CLIENT ONBOARDING CHALLENGES

Key client onboarding challenges appear to stem mostly from evolving client needs. Clients' demands are getting more sophisticated or complex, and wealth management clients now "want their private wealth to be viewed and managed holistically." Given advances in technology, they now expect "full use of digital infrastructure capabilities" and communication and support to be technologically-driven. For example, given that there are now applications that assess a person's risk and investment profile, clients will likely expect wealth managers to have these tools at hand upon onboarding. To compete with family offices, wealth managers should be ready to offer technologically-driven support that is user-friendly and that provides a positive experience for the client. Complex tax and regulatory requirements appear to cause problems during client onboarding as well. According to Ernst & Young, "the expansion of the regulatory realm and concerns about retrospective legal uncertainty loom large for wealth managers."

MAIN COMPETITORS

Based on Euromoney's ranking of private banks, the direct competitors of J.P. Morgan's wealth management business appear to be Credit Suisse, Julius Baer, UBS, and Pictet in the Middle East and UBS, Credit Suisse, BNP Paribas, Julius Baer, and Pictet in Western Europe. These are the private banks that rank closest to J.P. Morgan as far as services to the wealthy and ultra-wealthy are concerned. New challengers come in the form of specialist or boutique advisory firms, multi-family offices, and specialist wealth managers. These firms target niche client segments such as women, impact investors, or clients that prefer digital advisors. Some wealth management executives at top banks, such as Greg Fleming of Morgan Stanley, Jürg Zeltner of UBS, and Sallie Krawcheck of Bank of America, have left their jobs to start their own boutique advisory businesses. In Europe, family offices are thriving, according to experienced private banker Gerard Cohen. These family offices offer comprehensive financial and investment solutions, encompassing insurance, budgeting, charitable giving, tax services, wealth transfer, and planning for family-owned businesses. They typically serve ultra-high-net-worth individuals or families.

Sources
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Quotes
  • "In its advisory capacity, Private Banking helps clients to protect and grow their wealth across generations, creating the potential for them to achieve the vision they seek for themselves, their families, their businesses and their legacies. Clients benefit from a diverse range of expertise, spanning investments, wealth structuring, trust and estate planning, credit, banking and risk management. "
Quotes
  • "J.P. Morgan has operated in Europe for nearly 200 years and has a sophisticated local market presence across Europe, the Middle East and Africa, with headquarters in London."
Quotes
  • "Decisions made at every stage of your life can have long-lasting implications. We can help you evaluate your choices, as well as provide guidance to grow and preserve your wealth for all you envision now and in the future."
  • "We have worked with countless individuals and families for over 200 years. This experience has taught us that while each person is unique, there are common goals and concerns."
  • "Partnering with your other professional advisors, we help implement strategies to preserve your wealth—so you can enjoy your lifestyle, provide for your family and support the causes most important to you."
  • "Our Trust Officers are available to work with you and your other professional advisors to evaluate your situation and deliver a strategy tailored to your unique needs. By serving as executor, we are prepared to assume the many responsibilities required in settling and managing complex estates."
  • "The Philanthropy Centre guides clients through the many aspects of developing their philanthropic approach and effectively managing a private foundation."
Quotes
  • "Paul leads the Wealth Advisory practice in the United Kingdom and Europe, and assists the firm’s clients with their estate planning, succession planning and philanthropic needs."
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  • "Yannick has been providing wealth management advice for high-net-worth individuals for more than 10 years. He delivers specialized asset and estate planning advice to clients, particularly with regard to foundations."
Quotes
  • "Achille has been providing wealth management advice for high-net-worth individuals and families for more than 15 years. He has broad expertise across a number of key areas, including financial planning and investment optimization."
Quotes
  • "Agnès has been providing financial advice for organizations and high-net-worth individuals and families for more than 20 years. With expertise spanning corporate and family wealth management, she enables investment banking teams to meet clients’ strategic advisory needs. She also helps clients understand complex technical information, making it clear and digestible for them."
  • "Rather than proposing ready-made solutions, Agnès works closely with clients and their lawyers to understand their specific needs. She then develops bespoke solutions based on industry best practices, with support from the Private Bank legal team."
Quotes
  • "Regis advises ultra-high net worth individuals, family and family firms on the strategic planning and organization of their wealth."
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  • "M. Piedon-Lavaux is responsible of the Wealth advisory practice covering the Swiss Market as well as the UK business in Geneva."
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  • "Wealth Management offers investment advice and wealth management, including investment management, capital markets and risk management, tax and estate planning, banking, lending and specialty-wealth advisory services."
  • "Private Banking clients include high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide."
Quotes
  • "I lead JP Morgan Private Bank's the Wealth Advisory practice across the EMEA region and advise families on strategies to plan for and support the harmonious transition of their family wealth and family businesses to the next generation. My areas of focus include developing family governance and communication strategies, next generation engagement and development, establishing family offices and in crafting effective and rewarding philanthropy strategies. I have worked with families around the world especially the UK, Middle East and Asia."
Quotes
  • "The demands of HNWI+ are changing beyond recognition. Demographics, including one of the biggest generational shifts in the history of humankind, along with technological factors like smartphone penetration and increased app usage, are placing higher expectations on wealth managers. Today’s clients want their private wealth to be viewed and managed holistically. "
  • "The impact does not stop at financial asset allocation, but spans all assets, liabilities and life plans with the aim of delivering better approaches for after-tax wealth preservation and performance. Moreover, the ultra-low interest rate environment has made clients more price-sensitive and they expect a new breed of support, which is advisory rather than product-driven."
  • "Wealth management clients are demanding what is already a matter of fact in the retail industry: full use of digital infrastructure capabilities. Although some aspects of interaction with clients will remain at a personal level and within the traditional advisory process, clients and their advisors should be able to opt for smart and purposeful technology-driven support."
  • "The role of the advisor will most likely shift toward the profile of a requirements engineer and client supporter serving as a contact, backed by digital tools. The future business model focuses on the wealth manager’s technology and digital infrastructure, and is increasingly independent of the advisor. "
  • "Added value is generated by technology infrastructure, which enables a holistic perspective on the client’s private wealth situation and advice. Consequently, infrastructure and technology-driven capabilities will be fundamental to a wealth manager’s activity in the future."
  • "Wealth management in this segment will remain a people business; however, digitally enabled production and advice will have a major impact on the business models of wealth managers."
Quotes
  • "Currently, there is somewhere around 28,500 ultra-high net worth individuals in Europe, collectively contributing about 3.3 trillion of the global market. "
  • "With this gargantuan group of ultra-high net worth individuals in Europe—one that is largely expanding—a “perfect storm” is brewing for Family Offices. Single-Family Offices, private banks, global banks, and especially the Multi-Family Offices can serve these high-stake-holders with efficient and exclusive services—ranging anywhere from investment to asset protection. With the growth of wealthy individuals tremendously inclining in Europe, the annual growth of Family Offices will inevitably follow the inclination. "
  • "The fact that Family Offices are investing huge sums into technology to further the satisfaction for their wealthy clients coincides with Cohen’s statement, and in the next two years, it is possible that Europe will dominate the Family Office sector—and therefore, the global economy."
Quotes
  • "The last 20 years of private banking have been all about building scale, international growth and professionalization; the top wealth managers are still getting bigger and are confident they have the right model – but as they struggle to maintain quality of service under pressure on revenues, new specialists are emerging."
  • "Alongside these new focused and nimble entities, family offices are increasing, multifamily offices are expanding and specialist wealth managers are emerging to serve specific segments such as impact investors, women, or even clients that want the autonomy and low fees of a digital adviser."
Quotes
  • "Private banking includes personalized financial and banking services generally offered to wealthy high net worth individual (HNWI) clients. For wealth management purposes, HNWIs have typically accrued more wealth than the average person, so they have the means to access a larger variety of conventional and alternative investments. Private banks aim to match such individuals with the most appropriate options."
Quotes
  • "Family offices are private wealth management advisory firms that serve ultra-high-net-worth investors. They are different from traditional wealth management shops in that they offer a total outsourced solution to managing the financial and investment side of an affluent individual or family. For example, many family offices offer budgeting, insurance, charitable giving, family-owned businesses, wealth transfer and tax services."