JP Morgan Private Bank regularly tops lists for service and satisfaction. With $422 billion in assets worldwide, it ranks in the top ten in terms of size but higher in terms of the softer measurements of client feedback.

JP Morgan Private Bank regularly tops lists for service and satisfaction. With $422 billion in assets worldwide, it ranks in the top ten in terms of size but higher in terms of the softer measurements of client feedback.

After the firm was voted top in a list of US wealth managers by the Bank Insurance & Securities Association, WealthBriefing spoke with Catherine Keating, the chief executive of the private bank’s US operation, which has $270 billion in assets.

Ms Keating, who joined the bank in 1996 from the law firm Morgan, Lewis & Bockius, discussed what it takes to lead such lists at a time when the wealth management field has more entrants and aspirants than ever.

What has been the key to JP Morgan Private Bank’s consistently high satisfaction ratings in the US?
We have a lot of assets and our assets have been growing. But our client base remains small and our staff remains small. We’re focused on the ultra high net worth segment of the market. We’ve been growing, though, in a couple of different ways. We’re expanding geographically. We’re up to about 20 offices now in the US. That’s about the right number. It’s helped our growth. The other thing is we want the client experience to remain intensely personal. We’re adding 5-8 per cent to our client staff each year. The typical relationship manager works with 20-30 families and we think it’s important to keep the ratios at those levels.

Where is the growth coming from?
In terms of geography, the key growth areas are the west and south. Our roots are here in the northeast, but when you look at the growth rates in Florida and the south, you see lots and lots of opportunity for us. If you look at it from the client perspective, we’re in the fifth year of a global wealth expansion. It’s been a great time for wealth creation - either from people running their business correctly or from lots of IPOs. The business owner client has been a real driver of growth. People get wealthy today the same way they did 100 years ago with concentrated positions – rail and steel then versus hedge funds and media today.

How do you translate the benefits of size to customers at different wealth levels, e.g. $10 million vs. $100 million vs. $1 billion?
Size in and of itself is not a strategy. You’re going to be successful if you have great performance, great people and great service. Size helps us in that the families we work with are the size of institutions. Having the size we do, we can offer them an array of products. Size is also a benefit because of infrastructure. As we move away from paper, we’re able to process things, report on things, have a state of the art Morgan online website – all things that take a lot of investment. Where people worry is when they ask, will size be a trade off because we’ll become impersonal. We work every day to make sure that’s not the case. That’s why our clients have a team of 20-30 people. The team they have is the same.

So, are new clients sold on JPM PB based on its size and range of product offerings or by the feeling that they are going to get a boutique-like team within a large organization?

It’s both. Clients are looking for great people to work with, great performance, great service. If it’s about talking to the senior people that happens here every day. I meet with 250 clients a year.

How do you insure the continuity of service across the US PB? For example, how do you make sure the client is getting the same advice in San Francisco and New York and West Palm Beach?
We feel very strongly that when a client joins us he’s working with the local individual team but getting the benefit of the institution. We have a single chief investment officer who thinks about the markets and portfolios for clients. We have a strategy team. We have a single portfolio construction team so we end up with model portfolios for everyone.

The experience of the client is very consistent. Everyone starts their day on east or west coast time with a 15-minute morning meeting that reviews what happened over night in Europe and Asia, and what it means to our clients today. So everyone on our staff around the country starts out on the same page. We do everything we can to make sure the client working with us is getting everything the institution has to offer.

What are the most common demands clients make?
Our business is a combination of art and science. Wealth management is a very technical business – there is expertise in markets, wealth planning, structure, leverage, spending. Our clients clearly expect the very best. There’s also some art to what we do.

Our business model is not to be all things to all people. It’s getting to know families from one generation to the next and earn a seat at the table from one generation to the next. Clients come to us and understand our focus. They know we’ve been working for very wealthy families for a long time.

Over the years we’ve built a real library of best practices and white papers. What does it mean to build wealth in a concentrated position over time? What is a prudent amount of leverage for a family? Our families have wealth that will outlive them. The average size of one of our client’s portfolios is probably about $40 million – though they have considerably more overall - but you have up into the billions in there. Our clients aren’t coming to us asking how they’re going to fund their kids’ college education. They want to give to philanthropy.

They appreciate that we have the institutional knowledge, and they appreciate that we’re working exclusively with other families like them.

What are the hardest needs to meet for a client?
The hardest things to meet are things that are intangible and harder to quantify. A client can log into our website and see how their portfolio has gone up or down. When you start thinking about planning for the next generation that is not quantifiable. That’s one of the hardest things for our families to assess.

What’s next for the JPM PB in the US?
I think for us we sit in a very fortunate space. We have a wonderful legacy that’s been handed down to us. We have capabilities as a bank, a trust company, a wealth manager. What we have is very state of the art. We feel very fortunate.

On the other hand, the shelf life for good ideas has never been shorter. You need to be in the market to bring good ideas to clients. We are going to have a national election in 2008. Being very attuned to what might happen on the legislative front is important. We believe, for example, that a 15 per cent capital gains rate is as good as it gets, so we’re very aware of advising clients to structure their portfolio in the right way. It’s about being very nimble and in the market.