JPMorgan struggled to expand the unit and decided to shut down its stand-alone multi-family office team in Geneva, one of the wealth management capitals of the globe.
This decision is partially a result of regulatory reforms made in Switzerland that have reduced the number of independent wealth managers, according to Bloomberg.
The Geneva team, which was established in early 2022, reportedly employed more than a dozen people.
However, the lender will incorporate the company into its wider range of services in Switzerland.
The decision to shut down the office represents a setback for the lender’s initiatives to target Europe’s wealthy, where the company aimed to increase its clientele.
Along with Luxembourg and London, Geneva is one of JPMorgan’s primary private banking centres in the area.
Over the past twenty years, the number of family offices catering to single homes as well as those handling combined fortunes, has increased.
JPMorgan now offers eight professionals responsible for serving multi-family offices on its private banking website.
Four of whom are based in Switzerland, with Deutsche Bank veteran Matteo Gianini identified as the division’s country head.
However, the bank is expanding in other countries. JPMorgan Private Bank announced the opening of its US family office practice in July 2023.
Finma rule adjustment
The governance of independent wealth managers in Switzerland has changed dramatically since 2020, when a three-year process of transition began in order to receive commercial licences from Finma, the financial markets monitoring authority, bringing decades of self-regulation to an end.
The authority was given 1,699 licence applications from portfolio managers and trustees through 2022, but only approved fewer than half of those requests at the time, with the longest case taking 550 days to process.
On the basis of FINMA data, over 1,000 investment businesses decided not to apply for a licence, with many opting to modify their business models in response to the new system.