JPMorgan Asset Management is pulling out of direct-to-consumer services and two of the UK’s largest online stock brokers will be the beneficiaries, taking on the orphaned retail clients. The asset manager wants to refocus its attention on fund management and is to transfer 53,000 clients to Hargreaves Lansdown and the Share Centre, along with £1.5 billion in assets.
JPMorgan Asset Management had built up a direct-to-consumer investment platform, through which clients could invest online in FTSE shares and funds such as investment trusts. It also offered ISA and SIPP wrappers. Four years ago the decision was taken to withdraw from the consumer facing side of its business to refocus on fund management.
Apart from the fact consumer-facing investment services tend to be low margin compared to fund management, JPMorgan’s investment platform meant it was in some ways in direct competition with companies such as Hargreaves Lansdown and the Share Centre. With it relying on such partners to sell its funds, this no longer seemed strategically wise.
The Share Centre will take on 20,000 JPMorgan Asset Management clients that come with around £750 million of assets invested mainly in investment trusts. Hargreaves will take on around 33,000 customers who are predominantly invested in open-ended funds accounting for £765 million of assets.
The customers will not be obliged to move to either new home and some could choose another provider. However, those who do not take active steps to do so will be automatically transferred to one of the two online UK investment platforms.
Hargreaves Lansdown has happily re-homed JPMorgan Asset Management clients in the past. In 2015 the FTSE 100-listed online stock broker, the UK’s largest, took on 7000 JPMorgan ISA and SIPP account holders whose investments were no longer supported by the asset manager.
Announcing the latest agreement, Patrick Thomson, JPMorgan Asset Management’s chief executive for Europe, Middle East and Africa explained:
“After due consideration and, having worked closely with Hargreaves Lansdown in the past, we concluded they would be best placed to provide a high quality service to clients holding our OEIC managed funds as we cease the administration of Isa accounts. Hargreaves Lansdown is a household name and we are pleased our clients will have the opportunity to access a more comprehensive range of services following this transfer.”