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Matt Levine

JPMorgan Forgot to Tell Clients It Wanted to Make Money

Though presumably most of them figured it out.

JPMorgan Chase Bank is in the business of, among other things, investing rich people's money for them. It charges them a fee for this service. It invests a lot of their money in mutual funds. The mutual funds also charge fees. If the mutual funds are run by JPMorgan, then JPMorgan gets both fees. If they're not, it only gets one fee. Two fees are more than one fee. JPMorgan invests some of its clients' money in its own mutual funds, and some of it in outside mutual funds, but it says: "We prefer J.P. Morgan managed strategies unless we think third-party managers offer substantially differentiated portfolio construction benefits."

Here is how JPMorgan describes the reasons for that preference, or rather, strictly speaking, how it describes some reasons for that preference and one other random thing :