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JPMorgan (JPM) Set to Transfer GBP1.5 Billion Fund Assets

Zacks Equity Research

As part of JPMorgan’s JPM plan to stop offering service for the direct investment trust and ISA customers, nearly £1.5 billion of its direct customer accounts are set to be acquired by online stockbrokers, Hargreaves Lansdown and The Share Centre.

In sync with this move, The Share Centre is expected to take on nearly 20,000 of JPMorgan’s investment trust clients, holding around £750 million in assets from JPMorgan Asset Management.

Richard Stone, the chief executive officer at The Share Centre stated, “It is a privilege to have been chosen by the company as the best home for their investment trust customers and we look forward to helping these customers work towards their investment goals.”

Then again, Hargreaves is set to take on as many as 33,000 retail fund clients, holding £765 million in assets, mainly in open-ended funds.

While JPMorgan has currently given customers the privilege to transfer holdings to Hargreaves free of cost, they are also allowed to select any other service provider apart from Hargreaves, if they wish to.

This will be the second transfer of JPMorgan ISA fund clients to Hargreaves.

Patrick Thomson, the CEO of Europe, Middle East and Africa for JPMorgan Asset Management said, “After due consideration and having worked closely with Hargreaves Lansdown in the past, we concluded they would be best placed to provide a high quality service to clients holding our managed funds as we cease the administration of ISA accounts.”

In the past few years, Hargreaves has taken on some investment trust clients from BlackRock BLK, Legg Mason LM and a few other asset managers.

Notably, amid efforts to focus on own funds, JPMorgan already said in 2015 that it would no longer offer FTSE shares and other non-JPMorgan investments to direct clients. The company planned to shut JPMorgan Sipp and ISA, and decided to offer only its range of OEICs and investment trusts to individual clients.

JPMorgan’s efforts to expand into new markets by opening branches, its focus on strengthening the credit card business and improving loan balances are expected to continue to support revenues. However, dismal mortgage banking performance (owing to lower origination volume and refinancing activities) remains a major concern for the company. Moreover, its significant dependence on capital market revenues makes us wary.

So far this year, JPMorgan’s shares have gained 7.9%, underperforming the industry’s growth of 11.5%.



Currently, JPMorgan carries a Zacks Rank #4 (Sell).

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