Dimon Says JPMorgan Can Offer Free Robo-Advice to Best Clientsby
No-cost brokerage trades also an option for bundle of products
Bank’s chief executive officer compares idea to Amazon Prime
JPMorgan Chase & Co. can give valued clients a free automated investment service or a checking account that comes with no-cost brokerage trades as part of a future bundle of digital-banking products, Chief Executive Officer Jamie Dimon said.
“When you talk about robo and investing, well we can do that, and give it away for free if we want,” Dimon, 60, said Thursday during an investor presentation in New York.
“If you’re a good account, it’s no different than Jeff Bezos doing the $99 Prime and adding services to it, so you’re always making the clients satisfied,” Dimon said, referring to the Amazon.com CEO. Clients with retirement accounts would be one potential target, he said.
Banks are racing to incorporate new technology, including robo-advice, to fend off new entrants seeking to steal established firms’ customers. The service, popularized by Wealthfront Inc. and Betterment LLC, uses algorithms to generate investment-allocation advice with minimal human interaction. JPMorgan, the biggest U.S. bank by assets, has partnered with On Deck Capital Inc. to use its technology to offer small-business loans to the bank’s customers.
Dimon asked the audience how many would open a Chase account if it came with five to 10 free trades per month. A few raised their hands.
“We’re going to build it anyway, folks, and then we have to decide how to price it,” Dimon said. “But we want to add these great services.”
The bank’s asset-management chief, Mary Callahan Erdoes, signaled in November that she was less confident in robo-advisers. The technology is “unlikely to work as successfully in a bear market as it did in a bull market,” Erdoes said.
Darin Oduyoye, a spokesman for JPMorgan’s asset-management division, said the bank is “committed to building a world-class digital wealth-management offering.”