Magazine article American Banker

Cross-Selling Challenges for J. P. Morgan Fleming

Magazine article American Banker

Cross-Selling Challenges for J. P. Morgan Fleming

Article excerpt

A substantial cross-selling opportunity should exist for J.P. Morgan Fleming, J.P. Morgan Chase & Co.'s recently formed investment management arm, as it begins its drive to boost profits in the consumer sector.

Ronald R. Dewhurst, a managing director of J.P. Morgan Fleming, said the broader product range and investment expertise coupled with J.P. Morgan Chase's customer base makes for some compelling possibilities.

But the $705 billion-asset banking company, formed by the Dec. 31 merger of J.P. Morgan & Co. and Chase Manhattan Corp., is finding that determining how best to take advantage of the union is not easy.

Mr. Dewhurst, who oversees marketing and investments for mutual funds and pension products in Canada, the United States, and Latin America, said J.P. Morgan's and Chase's asset management groups have already blended in some ways. Their private banks as well as their marketing and sales forces have combined. In addition, on the institutional side, the asset management group is pitching Fleming products to pick up business for which J.P. Morgan would not have had the right products, Mr. Dewhurst said.

The most recent development in the blending of the companies' asset management functions came on March 1, when J.P. Morgan Chase renamed its Chase Vista funds, the $66 billion-asset group of 96 equity, bond, and money market funds, JPMorgan Funds. They were combined with the $41 billion-asset, 63-portfolio J.P. Morgan Fund family, creating a single family of funds with assets of $107 billion and 159 portfolios.

By yearend the company expects to merge about 10 pairs of similar funds and to add load charges to an unspecified number of the old J.P. Morgan Funds, all of which are currently no-load, a spokeswoman said. Also, the J.P. Morgan portion all the funds' names will be changed to JPMorgan so that all the names match, she said.

The Chase Vista portfolios were good, but the business lacked sponsorship within the banking company, Mr. Dewhurst said. And letting go of the Chase name might improve the marketability of the funds. "Morgan and Fleming are much stronger, more recognized brands," he said. J.P. Morgan Fleming incorporates Robert Fleming Holdings Ltd., the London-based asset manager Chase bought in August.

Mr. Dewhurst would not reveal any goals, saying it was still early, but said the expanded product range and distribution network are promising. "We have a wonderful opportunity now to bring Chase a bigger and more potent funds business."

But he said the company will have to use its new product range the right way. One idea in the early stages of development is finding a way to compensate branch employees for selling JPMorgan Funds.

A second idea is to find ways to increase third-party distribution of the funds, Mr. Dewhurst said. The company already distributes its funds through more than 100 banks, insurance companies, and broker-dealers. …

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