JPMorgan Chase's Mary Callahan Erdoes: The Most Powerful Woman in Finance
CEO, Asset and Wealth Management, J.P. Morgan
Though some other high-ranking executives at JPMorgan Chase have moved into new roles, Mary Callahan Erdoes is staying put. Erdoes, who is widely considered a potential successor to CEO Jamie Dimon, has now led the company’s asset and wealth management business for a full decade.
Asked in a recent interview if she might find a new role appealing, Erdoes demurred.
“I love my job, and I think I have one of the best jobs in the world,” she said. “I don’t think anyone should be in a job where they’re thinking about and pining for the next job, because it doesn’t make them great in the job they’re in.”
Erdoes continues to deliver strong financial results for the country’s largest banking company. Last year, the division that she leads, which is part of the investment bank, J.P. Morgan, reported net income of $2.85 billion, up 22% from 2017.
Clients entrusted the asset and wealth management division with total assets of $2.7 trillion last year, a figure that has been growing steadily. It is up about 12% from three years earlier and is more than double the level 12 years ago.
“We are very fortunate that we have such smart people working for us, that are producing these great outcomes for clients,” Erdoes told American Banker. “And as long as we do that, clients vote with their feet.”
Erdoes said that one key to success is a willingness to abandon investment strategies that are not working well. Her team has closed 229 funds over the past few years while launching 125 new products.
“You’re always trying to figure out, is there something that has changed in the markets that would allow you to do better?” she said. “I think we do that probably better than anybody else in the industry.”
Erdoes also has been focusing recently on enhancing JPMorgan Chase’s digital investment offerings. Its You Invest platform, which enables do-it-yourself investing, was launched in 2018.
“Everything we do — that we say to a client, do for a client, help a client with — we want to be able to have a client be able to do that with us or with themselves,” Erdoes said.
Ninety percent of You Invest users had not invested with JPMorgan Chase previously, Erdoes said. Those digital investors are about 15 to 20 years younger on average than those who use financial advisers in its branches, she added.
“This is hitting a whole other client base that maybe doesn’t feel the need to come in and have a face-to-face,” Erdoes said.
Erdoes’ tenure as one of Dimon’s deputies has not been without controversy lately. The 23-year company veteran has faced scrutiny on two separate fronts.
Over the summer, The New York Times reported that Erdoes overruled compliance officers who had recommended cutting ties with the financier Jeffrey Epstein after he pleaded guilty to sex crimes in 2008.
Epstein, who committed suicide in August while in jail on new charges, had brought other wealthy clients to JPMorgan Chase, and Erdoes was reportedly concerned about losing that business.
JPMorgan Chase issued an emphatic denial of the claims made in the Times article, and Erdoes declined to discuss the company’s relationship with Epstein in her interview with American Banker.
The asset and wealth management division also has faced allegations that clients were steered into in-house products that cost more than alternatives.
Back in 2015, JPMorgan Chase agreed to pay $307 million after an investigation by the Securities and Exchange Commission found a preference to put clients in proprietary products without proper disclosure.
In the interview, Erdoes said that the SEC case was entirely about disclosures and denied that the company ever had a practice of pushing clients into higher-priced, in-house investments.
“That’s not how we operate here,” she said. “We’re super-proud of the disclosures that we have now. We think for sure they are industry-leading, and our goal is to keep them that way.”