CEO | J.P. Morgan Asset Management
Mary Callahan Erdoes keeps finding new frontiers to explore.
Her latest geographic frontier is China, where last year the JPMorgan Chase unit that she leads became the first wholly foreign-owned asset management operation in Shanghai's free trade zone.
Major U.S. banks have long sought access to the fast-growing Chinese market, but their ambitions were circumscribed by government restrictions on foreign ownership of financial services firms. In many instances, JPMorgan Chase's operations in China remain limited to minority-owned joint ventures.
The free trade zone in Shanghai, a four-year-old pilot project, gives the New York-based banking giant a rare chance to go it alone in mainland China. It allows the asset management unit to sign up wealthy Chinese clients, as well as to develop deeper insights about Chinese companies that can be shared with investors in other countries.
"China is one of the most important regions for us in the world," Erdoes, who is a board member of the U.S.-China Business Council, said in a recent interview.
In a sign of China's significance to the $2.6 trillion-asset bank, the J.P. Morgan International Council, whose members includes luminaries such as Tony Blair and Henry Kissinger, will have its annual meeting there later this year.
Erdoes said ultrawealthy investors in China tend to be younger than in other part of the globe, which heightens their expectations for the technology they use. "The billionaires in most of the parts of the world, the average age is in the 50s, 60s and 70s, whereas the billionaires in China are in their 30s and 40s," she said.
Evolving demographic trends, in China and elsewhere, are a key factor in another frontier Erdoes is pushing: the digitization of wealth management services.
Last year, JPMorgan Chase committed to spend $300 million over three years on digital enhancements in her business. In September 2016, the company formed a strategic alliance with InvestCloud, in an effort to accelerate the development of new digital capabilities for individual investors.
Erdoes, who joined the nation's largest bank by assets in 1996 and moved into her current role in 2009, is trying to balance the demands of the most sophisticated, digital-savvy clients with the needs of those who just want a simple way to execute online trading. "You have to basically cover the full gamut," she said. "For us, the design and flow of it all is of critical importance."
The U.S. wealth management industry is being influenced by a new breed of robo-advisory firms, including Betterment and Wealthfront. Those automated, self-directed services often appeal to young investors whose financial lives are still relatively simple.
But as people accumulate wealth and make more sophisticated financial decisions, JPMorgan Chase still holds the upper hand, Erdoes said.
"I can't imagine there are clients in the world that will only want one thing from now until eternity," she said. "A lot of these monoline offerings from different firms are interesting but incomplete, because you will grow and need different things."