When the banking industry is at its worst, business is at its best for JPMorgan Chase's asset and wealth management division.
After the 2007-2008 financial crisis, wealthy clients flocked to JPMorgan for the stability its blue chip reputation promised. This past spring, they poured even more money into the New York-based company's wealth management business after a spate of regional bank failures.
The unit opened some 50,000 accounts in the roughly two-and-half weeks after Silicon Valley Bank failed in early March and the end of the first quarter, averaging four new clients with $100 million in assets or more per day — up from one-a-day last year.
Demand for the private banks' services became so intense that Mary Callahan Erdoes — who has been CEO of JPMorgan's asset and wealth management unit since 2009 — had to dedicate her entire mortgage team and a class of roughly 400 first-year analysts to a single task: opening new accounts.
"The moments where we really shine are the moments when there's a crisis," Erdoes said. "We've really established ourselves as the flight to quality institution that you go to when you reassess how important a banking relationship is."
Erdoes' team finished the second quarter with $4.6 trillion in total client assets and $3.2 trillion in assets under management. Year-on-year, those figures were up 20% and 16%, respectively.
"Those are pretty stunning numbers," Erdoes said, noting that they're both all-time records that have been steadily rising in the third quarter.
Erdoes has overseen record revenue numbers in each of her past five years at the wealth management unit's helm. With her division's profits soaring nearly 15% year-on-year in the second quarter — up to $4.94 billion — she is well on track to outperform again.
But growing steadily hasn't always been effortless, Erdoes said. She noted that maintaining the bank's high standards in times of unprecedented demand has entailed working longer hours and recruiting more talent.
"We're training people, we're growing," Erdoes said, noting that her unit has been hiring at a record-setting clip over the past two years. "It has been a really exciting and exhausting time for our people."
Erdoes has been in the news during the past year over the bank's relationship with Jeffrey Epstein, the disgraced former financier and convicted sex offender who killed himself while awaiting trial on federal sex trafficking charges. An ongoing lawsuit alleges that JPMorgan — via Erdoes' division — helped facilitate its long-time client's sex crimes.
A spokesman for Erdoes declined to comment, citing the ongoing litigation. (The lawsuit was
Erdoes noted that the bank treats the account opening process "very seriously" and requires that teams of lenders, bankers, investors and other specialists place "checks and balances" on it.
"Each one of those clients has made a decision. They could put their money anywhere, [but] they put it with us," Erdoes said. "We work hard every day to make sure we're doing the right thing for them."
Most recently, that has also involved acquiring clients from a failed bank.
JPMorgan's acquisition of First Republic Bank in May brought almost $151 billion in client assets onto the wealth management team. The move boosted its revenue last quarter by some $303 million.
Erdoes said that she expects First Republic's integration with her business — which she estimates will be finalized in 12 to 18 months — will continue to bring in cash, particularly through its client service model, to which she attributes First Republic's success before it failed due to a run on its deposits following the collapses of Silicon Valley Bank and Signature Bank.
"It's just this little gem of an institution," Erdoes said. "It will be a very healthy transaction for our shareholders."
Erdoes has also been kept busy with another expansion this year: JPMorgan's move to take full ownership of its Chinese mutual fund joint venture — China International Fund Management Co. — the newest of five acquisitions her business has spearheaded in recent years.
That buildout
In June, Erdoes helped lead JPMorgan's Shanghai summit, which brought together some 3,000 business leaders to discuss topics like China's consumer comeback, technology, health care and more. The conference was in person for the first time in three years.
"Hopefully, it was a turning point in what is reopening a dialogue that can from time to time become very difficult," Erdoes said. "It's our responsibility to keep that flowing."
Among other trips abroad — including several to volunteer in Ukraine and represent JPMorgan in talks with global leaders — Erdoes has also been overseeing an AI-fueled tech advancement campaign.
"AI is infused in almost everything that we do right now," Erdoes said, noting that her unit at JPMorgan utilizes artificial intelligence to streamline how information is shared and made available to its employees.
"It does not replace the need for our really smart people to make smart judgments and decisions," Erdoes said. "It just makes everything faster and easier for them to be the editor on top of all that information."
The continued technologization of finance has introduced what Erdoes called "Wall Street 2.0," a place where you can take meetings on your couch and ask chatbots for seamless insights.
The upshot of that transformation is that the next generation of financial leaders will be able to work more efficiently, she said, putting the days of paper files and office nights that leak into the wee hours of the morning behind them.
But Erdoes emphasized that succeeding on the Street always comes down to one thing: hard work.
"There is no substitute," she said. "Assume the position. The front row is not saved for anyone; I especially tell that to females."
