J.P. Morgan Asset Management
For adviser use only
Summary
J.P. Morgan Asset Management (JPMAM) is a subsidiary of the global company, JPMorgan Chase & Co. Being part of a wider organisation provides it with corporate stability and
enables it to take a long-term view on its strategy and continue to invest in its operations. However, there is the potential for reputational risk by being associated with a global
bank. In 2013, the business undertook a product review in an effort to strengthen its core proposition.
Facts
Highlights
To consider
• JPMAM is a wholly owned subsidiary of JPMorgan
Chase & Co.
• The firm recently re-evaluated its structure at
corporate level and moved to a global structure
instead of being regionally focused.
• Historically, JPMAM had a strong product franchise
with its Natural Resources fund. In recent years it has
worked hard to build strong product franchises in other
areas such as Cash, Fixed Income, Equity, Absolute
Return and Multi-Asset. However this is taking time
to fulfil.
• Asset Management contributes 8.3% of the Group’s
net income at Q1 2014.
Corporate
structure
• JPMAM is a multi-national organisation operating in
the Americas, Europe, Middle East, Africa, Asia and
Japan.
• JPMAM continues to be well diversified across
distribution channels and investment capabilities.
• In the UK, it has re-focused its effort around a reduced
range of products and key strategic relationships.
All information is correct as at 23 June 2014
J.P. Morgan Asset Management
For adviser use only
Facts
Highlights
• Whilst the JPMorgan brand is recognised globally,
• JPMAM is seen to take pride in maintaining strong
JPMAM has gained reputation through the sheer size
corporate values. Activities within the company follow
of its operations. It has offices around the world and
robust processes and local knowledge is fed into
provides a range of strategies across all asset classes.
global networks to ensure that the intellectual capital,
expertise and resources are shared around the globe.
• The firm strengthened its footprint in the retail advisory
Reputation &
brand
market through a training programme called Academy, • The firm sponsors sporting events including the
aimed at UK advisers. Its success led the business
Premiership Rugby Sevens series and the ‘Round the
to propose new forums for advisers to access its fund
Island’ yacht race on the Isle of Wight. These events
managers. JPMAM has now launched a new training
reflect its brand values.
programme called Market Insights which provides
advisers with comprehensive market information and
helps them to interpret economic data and articulate it
to their clients.
To consider
• Whilst the business is starting to introduce forums for
advisers to access fund managers, the firm has, until
recently, relied on product specialists to provide fund
updates and views.
• The strength of the JPMorgan brand can also be a
weakness. An example where JPMAM was exposed to
this was the ‘London Whale’ rogue trader case that hit
its parent company JPMorgan Chase & Co.
• JPMAM has also launched IncomeIntelligence, an
income related online resource in the UK. Much of
the content, including timely market commentary
and analysis of complex themes, is provided by the
strategists in J.P. Morgan’s Market Insights team,
partnering with the Chartered Insurance Institute to
support the continuing professional development of
UK financial advisers.
• The financial information shown relates to J.P. Morgan • It is encouraging news that growth in global AUM has • N/A
Asset Management globally.
recently been supported by the strong performance of
its mutual funds, with 67% of mutual fund AUM ranked
• AUM was $1.6tn at Q1 2014; up 11% on the same
in the top two quartiles over five years.
period in 2013, driven by net inflows into long term
Financial
performance
products and higher market levels, partially offset by
net outflows from liquidity products.
• Reported revenue of $2.78bn for Q1 2014, which is a
5% year on year increase (Q1 2013: $2.65bn).
• Q1 2014 was its twentieth consecutive quarter of
positive net long-term client flows.
J.P. Morgan Asset Management
For adviser use only
Risk oversight
& operations
Facts
Highlights
• JPMAM follows a team-based investment
management approach using disciplined processes.
This suggests that no one individual is solely
responsible for investment decisions.
• Risk management is an integral part of both its culture • In early 2013, JPMAM commenced a comprehensive
and business strategy and is embedded in everything
strategic review with the objective to strengthen its
it does.
core proposition in the UK. Numerous funds have
been earmarked for closure, including the Institutional
• All funds have an appropriate level of scrutiny, which
Balanced, Global Mining, Pacific Technology, UK
is adapted to the risks associated to each particular
Equity, Emerging Markets and Infrastructure Funds.
asset class, for example equity funds are reviewed
We see this rationalisation as positive, enabling the
quarterly.
business to shape its long-term product strategy and
• The firm has recently introduced processes and
shed underperforming funds.
controls to monitor the information displayed on data
vendors’ websites.
• The governance structure of the firm contains a
number of committees, in line with its corporate policy
and attended by the ‘heads of’ the various lines of the
business. In addition, there are independent oversight
functions, including Compliance, Risk Management
and Internal Audit.
To consider
• Underlying the global organisational structure of
JPMorgan is a management structure consisting
of global, regional and local management team
members. These team members have a direct impact
on the existing control environment.
Compliance
• TCF is embedded into practices and processes in
all areas of the product lifecycle including product
development, sales, marketing and client services.
It is governed through monthly Service Excellence
meetings and overseen by the UK Risk Committee.
• In the current context of increased regulatory scrutiny,
JPMorgan is undertaking a review of its compliance
function, including resources, processes and controls.
This is further evidence of its constant effort to comply
with the FCA’s policies
Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.
Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and
the Prudential Regulation Authority.
www.adviserzone.com
• There are existing litigations against JPMorgan Chase
& Co and its subsidiaries around the world; however
there is no impending material litigation on the asset
management business in the UK.