JPMorgan Chase & Co.'s Bear Stearns brokerage is in growth mode, a year and a half after its sale to one of Wall Street's banking giants.
Bear Stearns Private Client Services has recruited more than 70 financial advisers in 2009 — the most in its history — and plans to open two or three new offices next year, its first office openings in 15 years.
JPMorgan Chase's chief executive, Jamie Dimon, said at a securities industry conference recently that the company wanted to more than double the size of the brokerage force, to 1,000 advisers, with a specific goal to recruit top-tier talent. In recent years major brokerages have increasingly focused on attracting brokers who manage money for the richest of the rich.
The brokerage unit has some high-net-worth clients, but its average client account is $5 million. Bear Stearns has $55 billion of assets under management, up from $45 billion a year ago. Revenue has climbed 4% from a year ago.
In an interview, Bear Stearns' CEO, Barry Sommers, said the business has "completed the transition process [after it was acquired] and is poised for growth."
After beginning this year with 324 financial advisers, Bear Stearns now has 380, with most of the new recruits joining from major competitors, specifically wire houses.
Many were high producers, averaging $1.1 million in annual production and managing client assets of $160 million.
Sommers said the new recruits were not simply replacing advisers who have departed.
"Our attrition [rate] is close to zero. In a very volatile market, we have had four brokers leave to go to the competition" over the past year, Sommers said.
Bear Stearns has seven major offices in cities including New York, Boston and Chicago, as well as seven smaller satellite offices. The brokerage's expansion plans include setting up new locations in the Houston market, the Middle Atlantic region and Florida, Sommers said.
"It may be all three, it could be two out of three or another [location] that we may throw in there," he said. While other major firms such as Bank of America Corp.'s Merrill Lynch, and Morgan Stanley Smith Barney, have large brokerage forces of more than 14,000, Bear Stearns plans to maintain its smaller, boutique size.
"Most of these firms have more offices than we have people, and have a lot of open seats to fill," Sommers said. Bear Stearns, he said, has the "ability and flexibility" to be more selective in hiring and has an easier time providing resources to a smaller advisory force.
