In an effort to service wealth management customers who don’t visit bank branches, JPMorgan Chase & Co. will introduce a robo-advisor program offering investors a digital platform.
“JPMorgan Chase does business with about 66 million households, but not all of them walk into branches every day,” Boaz Lahovitsky, Head of J.P. Morgan Personal Advisors, told Barron’s. “There’s a population out there that’s happy to interact with professionals remotely.”
But before clients can sign up, they must meet with a human being via video conference. During this session (and sometimes, there may be two to three meetings), the advisor will help establish a financial plan and recommend a professionally managed portfolio. After these steps, the robo-advising begins.
But nothing happens until that first meeting with a human advisor. “We actually won’t let you open an account until you speak with us,” Lahovitsky said.
The digital service will provide automatic rebalancing as market conditions fluctuate, and customers will also have on-demand access to professionals to discuss any updating.
The video call center staff members hold Series 7 and 66 securities licenses, and many also have the Wealth Management Certified Professional (WMCP) designation. Some have the more widely recognized CFP certification, though Lahovitsky contends the WMCP has a more practical focus.
Competitors Vanguard and Schwab also have hybrid robo-advice programs. Vanguard’s Personal Advisor Services has a $50,000 account balance minimum, compared to Schwab’s $25,000. JPMorgan’s minimum is also $25,000.
JPMorgan charges an annual fee of 0.6% of the account balance on accounts with up to $249,999. The fee drops to 0.5% for balances of $250,000 to $1 million, and 0.4% for accounts with more than $1 million. Vanguard charges a flat 0.3% fee, while Schwab’s hybrid uses a subscription model, with clients paying $300 for an initial planning fee and then $30 a month on an ongoing basis.
As of November, JPMorgan has 200 advisors in place at video call centers and plans to add 100 more in 2023, according to Barron’s.