JP Morgan launched its Family Office Solutions unit in September last year to serve family offices with more than $500m in assets. Samy Dwek, EMEA head of the new unit, explains to Nicholas Moody what JP Morgan plans to do differently
Networks are important to family offices and important to Samy Dwek (pictured).
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The managing director of Europe, Middle East and Africa (EMEA) Family Office Solutions (FOS) mentions "networks" about a dozen times in our interview and its these networks that JP Morgan is trying to do more to service.
"Family offices work in networks they like to exchange information, it is all about the peer group: sharing best practice, peer knowledge, sharing investment ideas, themes," he says.
The FOS unit is a recent creation. It was set up in September 2011 with four founding staff, and is the first of its kind globally for the bank. However, as Dwek points out, while this formalised offering may be new, the US-headquartered bank has generations of experience serving the ultra wealthy.
Despite this experience, JP Morgan undertook its inaugural Family Office survey in March. The study received 125 responses from single family offices (SFOs) in multiple jurisdictions who managed assets in excess of $100m.
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By GlobalDataThe results, which were published in July, have helped the bank direct its Family office strategy.
Unsurprisingly, the geographic mix of respondents matched the spread of family offices worldwide.
About 40% came from EMEA, 35% from the US, Latin America accounted for 15% of respondents and Asia 10%.
Wealth preservation remains the primary motivator for family offices with 73% of respondents rating it as the most important part of managing investments.
The decision-making differences were also intriguing.
On a regional basis the survey found that the principal took the investment decisions in 60% of the cases in the US, 70% in Asia, while only 30% in EMEA and 23% in Latam. Another key finding was the staff resources available to family offices.
More than a quarter employed only 4-6 people, of this only 1-2 will be investment professionals, Dwek asserts.
Family office execs time-poor
Dwek explains that the raison detre of the FOS unit is to make the lives easier for the family offices.
"Time is [a family offices] most expensive commodity how can we make their life easier in talking to JP Morgan? By bringing them all the potential opportunities and solutions."
Dwek continues: "If you have a focused team who understands what family offices are thinking about, who live, breathe and eat family offices, they understand what they need.
"The FOS team work across the lines of business to bring them those potential opportunities and solutions that makes the family offices job much easier.
"They dont need to have multiple relationships across a bank."
Dwek gives an example of how this has worked in practice. "One family office said Were looking to do a multi-billion dollar transaction in another part of the bank.
"We picked up the phone, made the introduction and it was done the FO said Wow that was great."
The FOS head is less keen to share details about the performance of the new unit.
He will not comment on the number of $500m+ clients it is dealing with but says the offering is based around quality which means not having too many FOs per banker.
He is also unwilling to share details about the charging structure of the service.
What is clear is that JP Morgan faces a host of competitors in this space as universal banks look to boost collaboration and ease of access for UHNW clients.
HSBC launched its Family Office Partners in September 2010, while Société Générale Private Banking established its Private Investment Banking unit in March this year.
Selective solutions
Another survey finding underlined why JP Morgan is pushing the solutions angle of its offering.
"More than 50% of SFOs use more than six investment providers, so yes, there are a lot of quality banks, all trying to offer services. I dont think its about services; its more about solutions," says Dwek.
"One of the things weve done is to look beyond JP Morgan. Were going to find them solutions, if its a very niche product sure well show them what JP Morgan can do, but if we can find an external hedge fund manager, we can build them a specific external solution," he says.
This does not mean it is open architecture. "We are very selective on the people you are putting your clients with.
"We have to be comfortable were not putting them in harms way we need to give them the right solution with the right comfort," he says.
Ultimately, says Dwek, it is looking to cross-leverage the expertise in asset management and the JP Morgan Group to deliver quality information to its UHNW clients.
"Were doing this slowly, building slowly as we need more resources because there is more demand, we will add more people.
"To go headstrong with 10 people, it needs to be done in a co-ordinated way," he concludes. <
