First Republic Deal Adds $151 Billion to JP Morgan’s Wealth Assets
From the desk of Jim Eccleston at Eccleston Law
JPMorgan Chase & Co.’s acquisition of First Republic Bank will add $150.9 billion of client assets to JPMorgan’s wealth segment in its Consumer & Community Banking division, according to the company’s earnings report. First Republic’s wealth unit had managed approximately $290 billion in assets at the end of the first quarter. A year ago JPMorgan’s consumer wealth unit had $628 billion in assets. The First Republic deal caused the wealth unit assets to increase 42% to $893 billion.
If J.P. Morgan can retain most of the First Republic brokers and their customers, the First Republic deal will double the roughly $200 billion in assets at the J.P. Morgan Advisors brokerage unit. As of Friday, J.P. Morgan stated that it had retained 91% of First Republic’s employees that had offered positions. J.P. Morgan extended offers to around 85% of the defunct bank’s staff. On July 2, around 5,100 First Republic personnel joined J.P. Morgan.
Since March, at least 86 First Republic brokers have left for other firms. Their total combined client assets were nearly $50 billion. Around 35 of those brokers have left since May 1, including some who were below the $2.5 million revenue threshold to receive retention offers offered by First Republic.
JPMorgan still is evaluating the 63 First Republic branches that it acquired as part of the deal. Some likely will be converted to Chase branches or J.P. Morgan Wealth offices, while others will be consolidated. JPMorgan reported 5,153 client advisors in the U.S. at the end of the second quarter, up 5% from 4,890 one year ago. JPMorgan also has 3,214 private bankers globally.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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