A drive to attract more British millionaire clients marks a first phase of plans by J. P Morgan to expand its private banking services across Europe, the Middle East and Africa (EMEA), targeting clients who are rich if not yet in the "ultra rich" bracket.
Tracey Reddings, chief executive officer for UK Private Wealth Management at the US bank, said she is charged with bringing in more "core millionaire" clients.
These are people with between $3 million and $25 million, increasingly courted by banks because there are more of them, their needs are less complex than their even wealthier contempories and they can therefore generate higher margins.
Such an expansion looks to be a formidable task, against chilly economic headwinds limiting growth in the pool of millionaires and a widely held perception that the US group is primarily an investment bank.
Reddings also has to battle against preconceptions that only super-rich people, those with $25 million or more to their name in investable assets, are eligible to join the client list of the US group's private bank.
But she has high ambitions, aiming within five years for the business to become one of the leading institutions in the already mature and well-banked British market.
"It's a big market in the UK. There is something in the order of 84,000 individuals with 5 million pounds ($7.7 million) or more of investable assets," she said in her first interview since joining from French rival Societe Generale last year. "If we can double our market share in terms of the clients that we look after, the assets we manage (and) t he revenue that we drive, I 'll be delighted." One of her targets is that by 2015, the number of bankers in her charge will have increased tenfold.
She declined to discuss how many bankers that represents in absolute numbers, but a source close to her at the bank said that could amount to around 50 private bankers.
The UK business she heads marks a first stage in the bank's plans to expand the strategy across the EMEA region and follows closely a similar push in Asia led by former Standard Chartered Plc private banking chief Peter Flavel. Reddings joined last September from SocGen where she was head of UK private banking at its British unit SG Hambros.
She now works from JP Morgan's new London private banking centre in the upmarket Knightsbridge neighbourhood, best known as home to Harrods department store and ostentatious real estate projects built for the very rich such as One Hyde Park.
Flavel joined a year earlier as chief executive of Asia wealth management having led the development of a similar business at Standard Chartered. The UK market, though offering rich pickings with a large population of wealthy people, may be tough to expand into with established local competition that takes in Coutts, which has included Queen Elizabeth among its clients.
Even with the UK still mired in recession, Reddings believes that after the market trauma of the financial crisis, clients of other institutions will be looking for something new.
"People are tired ... They are looking for new ideas, for innovation. They still have wealth to manage and they are looking for firms that can work with them," she says. On the back of the planned tenfold increase in UK-based private bankers, she hopes to double assets, but declined to quantify the target as JP Morgan does not disclose assets under management for individual markets. The bank has around $830 billion in private wealth assets globally.
Reddings declined to comment on whether the recent trading losses from a failed hedging strategy at another unit of the bank have hampered her efforts to woo new clients.
But she insists the private wealth business has continued to grow throughout her tenure, despite the tough economic backdrop, and will continue to do so. "I'd use the phrase cautiously optimistic, because we're in very volatile times," she said. "It's challenging and it's difficult and we have to work harder than ever.
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