Sometimes being the most powerful person in an industry means facing the greatest scrutiny. For Mary Callahan Erdoes, running one of the most reliably profitable businesses at the country's largest banking company now means weathering part of the regulatory storm sweeping over JPMorgan Chase.
Erdoes has spent the past four years as head of the company's asset-management division, which handles more than $2 trillion in assets for its wealthiest customers. Her division frequently appears on lists of top money managers, and has been a steady source of profit for the parent company at a time when most in the banking industry are struggling for reliable returns.
But not many are envying JPMorgan Chase or its top executives recently. Since April 2012, when the extent of a disastrous trade in its chief investment office came to light, the firm and high-profile Chairman and CEO Jamie Dimon have been in the crosshairs of regulators, lawmakers, shareholders and the press.
The London Whale's $6.2 billion trading loss opened the floodgates to Congressional hearings, and to a long and loud (and ultimately unsuccessful) shareholder campaign this year to strip Dimon of his chairmanship. It also precipitated a steady stream of executive departures and increased regulatory scrutiny of almost every corner of JPMorgan Chase's operations, including the business line run by Erdoes.
"We spend a lot of time with the regulators and they work very closely with our business. We have a great relationship with all of them," she said in an interview this summer. "It's a very good, healthy dynamic. It doesn't mean we won't trip up on something, somewhere in the future, and then we'll learn from it, we'll work hard at it and we'll move on. ... Trust me, there's self-learning every second of every day."
Brisk yet thoughtful, Erdoes does not engage in pity parties, but she carefully lays out her case that JPMorgan Chase is more bellwether than outlying bad actor when it comes to regulatory targets.
"In many ways we're sort of a highlighted example," she says. "I feel incredibly proud to work for a bank, and incredibly proud to work for JPMorgan. ... Not happy for some of the mistakes we've made along the way, but the mistakes will make us better."
She also downplays the effects of the C-suite turnover. Since last year, Dimon has lost or replaced a chief financial officer, a co-chief operating officer, a chief risk officer, a chief investment officer, a co-head of litigation and several more senior executives and heads of businesses.
"Personally, it's never fun to see people you enjoy working with retire or leave," Erdoes says by phone in late July, on her way to a retreat in Massachusetts for JPMorgan Chase executives.
"[But] does it affect me doing my job? Not at all."
Erdoes, age 46, is part of Dimon's 12-member operating committee, and a pillar of stability at a company that, even before last year, regularly rotated executives through various lines of business. She has spent 17 of her 24 years in the industry at JPMorgan, all of them in asset management or private banking, and has earned widespread respect for her ability to handle the money of pension funds, central banks, foundations and the rarefied wealthiest 1 percent.
"Our asset management business delivers consistently strong results, and Mary's leadership is the driving force behind that performance," Dimon says. "She has an incredibly deep understanding of our clients' needs and the strategic vision to deliver solutions for them. She's an extremely talented leader."
Asset management businesses and their more mass-market incarnations are increasingly important to the industry, as banks struggling with low interest rates and poor margins turn to the steady revenues yielded by wealth-management fees. JPMorgan Chase has led the charge, building special locations devoted to serving wealthy customers and resettling branches to position them closer to the most affluent.
Banks are "looking for areas of revenue growth, and they're looking for areas that have less volatility and risk. Wealth management's been a natural segment that's been highlighted and has done well for the banks," says analyst Marty Mosby of Guggenheim Partners. He praises the performance and high ranking of JPMorgan's mutual funds, saying, "That bodes well for the image that the company has of becoming more than just a bank in the eyes of its customers."
Erdoes has navigated the more competitive landscape with a sharp eye for hiring the best wealth managers. Such "talent management," she claims, is her most important role and greatest strength.
"The hard part of the job every day is the investment performance. You can't will it, you can't have a lock on it ... and it's the most dynamic part of what we do," she says. So "you spend all of your time and energy making sure that you have the right people sitting in their seats and that they have the right resources. ... And it's also the weeding out of the people who aren't going to make it, because it's hurting our clients."