With a maximum of thirty to forty clients per private banker, J.P. Morgan Private Bank claims to distinguish itself in the Benelux region. “We want to grow substantially,” said Annabelle Azoulay, head of the bank’s branches in Luxembourg, Brussels, and Amsterdam, “but we’re certainly not going to tinker with that ratio.”
The success of its approach will likely be judged in the coming years by the growth of J.P. Morgan’s Benelux workforce, as the bank does not provide data on client numbers or assets under management. Azoulay, in an interview with Investment Officer, hinted at openness to all possibilities, including acquisitions.
JP Morgan’s private banking ambitions reflect industry-wide shifts and consolidation with Benelux firms at the centre. Just last week, ABN Amro expanded its private banking presence in Germany with the acquisition of Hauck Aufhauser Lampe. Meanwhile, in Luxembourg, ING Group announced strategic plans to boost its private banking services here, a move that includes shedding thousands of small retail clients. In Luxembourg, many smaller private banks find it challenging to turn a profit amid increasing regulatory pressure and the need to innovate. Luxembourg already lost a third of its private banks since 2015.
A few years ago, the threshold for Ultra High Net Worth Individuals (UHNWI) was commonly set at 25 million—dollars in the US and euros in Europe. Today, however, the more widely accepted benchmark has risen to 30 million. This UHNWI group is the specific target of J.P. Morgan Private Bank, setting it apart from other private banks in the Benelux that typically cater to clients with assets starting from half a million to a million euros.
Named “Best Private Bank in the World” for the fifth consecutive time by Global Finance late last year, J.P. Morgan Private Bank values this niche market, Azoulay told Investment Officer. Until recently, clients in Luxembourg, Belgium, and the Netherlands were served from New York, London, and Paris. However, the bank has since opened branches in Luxembourg (2019), Amsterdam (2020), and Brussels (2022).
Long history in the region
Despite these recent expansions, J.P. Morgan’s presence in the low countries is far from new. “We have a long history here and are very proud of that,” said Azoulay, referring to the investment bank and asset manager operating in the region under the J.P. Morgan brand. One of its legal predecessors established itself in Brussels in 1919 as the first American bank, and the bank has had a presence in Amsterdam since 1944, according to its website.
Establishing physical branches for the private bank in the region was a strategic decision. “Besides the global reach of J.P. Morgan’s international network, the local touch is also very important,” Azoulay explained. “It’s essential to be close to your clients. Relationships are key, and there can be significant differences in language and tax rules.”
The physical branches also signal J.P. Morgan Private Bank’s long-term commitment to the region. Growth remains an objective, with the team in the three branches currently comprising over 30 professionals. “We hire new people every year,” said Azoulay, without specifying concrete growth targets. While the bank does not disclose assets under management or client numbers, based on the current staff and client ratio, it can be estimated that J.P. Morgan Private Bank serves a few hundred clients in the Benelux.
Art as a differentiator
Art is one of the specialities with which J.P. Morgan Private Bank aims to differentiate itself. “Art continues to fulfil a dual purpose for many clients, as a passion and as a potential alternative investment opportunity,” said Azoulay. “It is a unique asset because of its emotional ties, but also due to the inherently illiquid nature of a work of art and its relative stability over the long term.”
Art can be an integral part of a wealth plan. “As advisers, we help finance and manage these extraordinary assets. Clients can extract liquidity from their art without selling it by using the art as collateral for loans,” explained Azoulay.
This lending process involves an extensive assessment, including evaluating the client’s financial health and balance sheet, often requiring personal or corporate guarantees. J.P. Morgan works with industry experts to determine the value drivers of each artwork, tailoring loan terms to each client’s unique requirements, such as increasing loan-to-values or extending maturities.
Holistic approach
Azoulay described the bank’s approach to the high-net-worth market as “holistic.” “Everything we do is based on what the customer wants, so it is first and foremost a matter of listening,” she said.
J.P. Morgan involves specialists from its network in its advice, whether they are tax experts, planners, investors, or experts in art and philanthropy. “No client is the same, and we are always available to discuss everything with our clients at any time. Our solutions are always fully customised.”
Changing face of philanthropy
A recent J.P. Morgan Private Bank survey of 190 family offices worldwide indicates a changing face of philanthropy. Forty-six percent of respondents now regard philanthropy as a top priority. The next generation of philanthropists is keen to use more of their own resources to promote good causes, such as time, talent, and networks.
Among millennials, 74 percent consider themselves philanthropists, compared to 35 percent of wealthy baby boomers. The survey estimates that over the next two decades, approximately 1,000 wealthy individuals will pass on 5.2 trillion dollars to their heirs.
This article was originally published on InvestmentOfficer.nl.
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