J.P. Morgan courts wealthy with online service
The company plans to unveil an online private banking service as it continues to build a $1 billion electronic business initiative.
The service will cater to wealthy individuals with at least $1 million in investment assets, according to sources. Private banking services offer advice on such topics as structuring trusts and diversifying assets.
J.P. Morgan representatives declined to comment. A press conference has been scheduled for Monday.
The service will build on J.P. Morgan's technology strategy, in which the company plans to invest $1 billion this year.
In addition to Monday's announcement, J.P. Morgan today announced the formation of an electronic finance unit, called LabMorgan. The plans involve investing in various ventures inside and outside the company. LabMorgan adds to the five technology services the company has rolled out since June.
"This initiative takes advantage of all the skills and assets found throughout the firm," said Peter Miller, managing director of LabMorgan.
Brick-and-mortar investment banks are increasingly looking for ways to mine the Internet, as a growing number of online brokerages compete for their business.
LabMorgan will operate as an incubator and early-stage merchant bank for financial services and technology start-ups, Miller said.
LabMorgan will take ideas supplied from companies, individuals and even its own employees to create separate businesses that it will support with funding, advice and access to contacts in the financial markets. The unit also will consider licensing in-house concepts, Miller said.
The new unit will also oversee some of J.P. Morgan's earlier technology initiatives.
During the past nine months, the investment bank launched Cygnifi, an independent Web-based derivatives company; Horizon, a Net-based risk-assessment tool that's marketed to other companies; and FpML, a Web-based protocol that allows derivatives traders to exchange information.
The company also has launched several portals. MarketAxess is a multidealer trading portal, while VolCenter is designed for traders of foreign currencies and precious metals derivatives.
"LabMorgan will do more of what we've been doing but in a more formal way," Miller said. "We want to look at ideas inside and outside the firm and accelerate their product value."