JPMorgan advisor headcount rises in third quarter

JPMorgan's advisor headcount rises thanks to First Republic influx

October 13, 2023 1:47 PM

JPMorgan Chase's advisor headcount rose by 500 in the third quarter thanks in part to an infusion of wealth managers from the Wall Street giant's acquisition of First Republic bank in the spring.

JPMorgan reported Friday in its third quarter earnings call that it had 8,867 advisors in its Wealth Management and Global Private Bank units by the end of September. That figure was up 500 advisors from the second quarter.

A JPMorgan spokesperson confirmed the tally includes former First Republic advisors but didn't have figures for exactly how many. First Republic's website still lists more than 200 employees bearing the title of either wealth advisor or wealth manager.

JPMorgan has been at pains to prevent those advisors from leaving as it joins other Wall Street powerhouses in trying to build up its wealth management units. That business delivered $1.4 billion in net income in the third quarter, up from a $144 million loss in the same quarter last year. That helped to drive the firm's total profits up by 35% to $13.2 billion.

"Things are going well, arguably a little better than we had modeled with the acquisition [of First Republic]," JPMorgan Chief Financial Officer Jeremy Barnum said in an earnings call. "And we're happy to see that."

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

The Banking and Wealth Management's parent unit, Consumer and Community Banking, reported a 36% year-over-year increase in its net income of nearly $5.9 billion. The former First Republic contributed roughly 14% of that increase.

The Banking and Wealth Management unit's net revenue rose by 43% to $11.3 billion. The former First Republic contributed roughly 13% of that increase.

The results, according to JPMorgan's earnings release, were driven by "higher net interest income, reflecting higher deposit margins, partially offset by lower balances."

Private bank

JPMorgan's Asset and Wealth Management unit, which includes JPMorgan's private bank, reported a 10% year-over-year increase in net income of slightly more than $5 billion. Without the former's First Republic's contributions, though, the results would have been flat.

The unit's noninterest expenses were up 4% year over year to $3.1 billion. That left it with roughly $1.4 billion in net income, a number up 16% year over year.

The higher revenue was "driven by higher management fees on strong net inflows and higher average market levels, offset by lower performance fees and lower net interest income," according to JPMorgan's earnings release.

Assets

The Wealth and Asset Management unit reported a 22% year-over-year increase in assets under management, bringing the total to $3.2 trillion. Its client assets — which includes assets held in custody — were up 21% to $4.6 trillion.

Of the assets under management, $888 billion were held with JPMorgan's private bank, which specializes in working with high net worth clients.

Advisor headcount

Of the 8,867 advisors who were at JPMorgan by the end of September, 5,424 were in its Banking and Wealth Management unit. That count was up from 5,017 in the third quarter of 2022. JPMorgan has said it eventually wants to bring that number up to 6,000.

JPMorgan's private bank reported having 3,443, a number up from 3,110 in the previous year's third quarter. The private bank has set itself a goal of bringing on 1,600 new advisors by 2026.

Remark

JPMorgan CEO Jamie Dimon started off the earnings call by warning that now "may be the most dangerous time the world has seen in decades," citing not only the wars in Ukraine and Israel but the U.S.'s tight labor market and the likelihood that interest rates will have to climb higher to combat inflation.

"While we hope for the best, we prepare the firm for a broad range of outcomes so we can consistently deliver for clients no matter the environment," Dimon said.