To make Philadelphia the hub of its Middle Atlantic private client business, J.P. Morgan & Co. plans to move 15 professionals to new office space there in July.
J.P. Morgan, New York, has just two professionals in its year-and-a- half-old representative office in the city. To set up its beachhead in Philadelphia, Morgan hired Catherine M. Keating from a local law firm, Morgan Lewis & Bockius. She was quickly joined by vice president Joseph Kozza, who had worked at Brown Brothers Harriman & Co.
The plan is to have 30 professionals in place by January and 60 in five years.
The firm opened a 29-person private client office in Dallas in January.
Besides New York, the other private client locations are Chicago, Los Angeles, Palm Beach, Fla., San Francisco, and Wilmington, Del.
When targeting entrepreneurs in the Philadelphia area, J.P. Morgan plans to distinguish itself by pitching investment banking alongside private asset management, said Ann Borowiez, the J.P. Morgan managing director in charge of the expansion.
Ms. Borowiez said the mix of new and old money and the size of the market make Philadelphia attractive.) Though Morgan provides separately managed accounts only for clients with $2 million invested, she said, there are clients with a lot less in brokerage accounts. And the minimum investment in Morgan's mutual funds was lowered to $2,500 last year.
"We want to dispel the notion that you have to have mega-millions," Ms. Borowiez said.
Philadelphia's old money, Main Line image has discouraged many companies from entering the market, said Norman R. Lubin, chief executive officer of FMS Consulting, Blue Bell, Pa.
"Philadelphia, for a number of years, was underrated in terms of its opportunities to grow a money management firm's wealth management business," he said.
"The reality is there are lots of successful people who live in the Philadelphia area. Those successful people and businesses are now targets for money managers," Mr. Lubin added.
Many well-entrenched firms - including Glenmede Trust Co. and Pitcairn Trust Co., which both focus on wealthy investors - have quietly enjoyed the business the area's affluent has brought them.
PNC Bank Corp., Pittsburgh, also has a stronghold there, and Wilmington Trust Corp. is expanding in the area. First Union Corp. gained entry from its purchase last month of CoreStates Financial Corp., the last big bank based in the city.
Mellon Bank Corp., Pittsburgh, which entered the Philadelphia market in 1983 by buying Girard Co., has seen a spurt of private client growth there. New business booked through Philadelphia has increased 30% to 35% in each of the last three years, said Douglas Kloppenburg, senior vice president of the bank and regional manager for Mellon Private Asset Management, which has 125 professionals working in the region.
Eighty-five percent of Mellon's new private clients already had a relationship with the bank, Mr. Kloppenburg said. The rest are recruited by Mellon salespeople or, as more often is the case, referred by local attorneys and accountants.
"Someone coming in is going have a little more difficult time establishing those relationships with those intermediaries," Mr. Kloppenburg said.
Ms. Borowiez said Morgan has more to offer affluent prospects than other firms in the area by drawing on its various components, from investment banking services to private equity investment expertise.
"We view our competition as in one of four categories: commercial banks, brokerage firms, asset management, and trust companies," she said. "And you don't find competitors across all four categories. That's our competitive advantage."
