JPMorgan Chase’s You Invest, which includes its automated advice platform, or so-called robo advisor, Portfolios, saw a steep uptick in the number of new accounts opened in 2020 compared with the previous year, said Dr. Kelli Keough, head of digital and client solutions at the firm. The growing popularity of the two-year-old digital investing feature underscores the financial services company’s appeal to retail investors, said Keough, speaking at the CB Insights Future of Fintech virtual conference. The firm is also expanding its remote and in-branch advisor capabilities, anticipating the need for human-powered advice as clients’ needs get more complex.
You Invest all but doubled the number of accounts it was servicing from September 2019 to the same period this year, increasing by 97%, while assets increased 131%, said Keough. Even as early as March, JPMorgan was seeing a spike in increased account opening, she added. “It’s been a time when clients have been wanting to invest with us, where they bank.”
The pandemic reaffirmed JPMorgan’s digital-plus-human thesis, said Keough. Even as lockdowns and remote advising took hold earlier in the year, “You Invest was right there, at the right time, if [clients] wanted to do online investing,” either with—or without—a human advisor, she said.
Investors using You Invest are younger than JPMorgan’s typical advised client base, but they’re also older than the target demographic of pure-digital firms like Wealthfront. The typical You Invest investor is 42 years old, while the Private Banking client is typically 56 years old, said Keough. You Invest investors are 43% millennials, followed by Gen X, “in the 30% [range].”
While millennials and Gen X investors using You Invest tend to make similar trades, they differ notably from the firm’s presumably more sophisticated Private Banking clients, said Keough, in ways that contradict the notion that retail investors are "the dumb money."
“Our clients who are in You Invest and Chase Wealth Management only sold 31 days from February through October,” she said. “They were buyers the rest of the time. That’s in contrast to our Private Banking clients, who sold four times as many times. [Private Banking clients] were net sellers most of the time.”
JPMorgan’s plans to build a “national branch” of remote financial advisors is also proceeding apace, she said. The centralized, “service center-type advised relationship” is designed to allow branch-based advisors to spend “quality time” with customers, where appropriate, she said. Across its channels, the firm has roughly 5,000 financial advisors, she added.
“We’re going to continue to invest in the human-led advice space, but importantly, we don’t believe that it is just throwing tens of thousands of advisors at the world,” she said. “Instead, we want to serve our clients in a smarter way. We know digital is a really important part of every client’s life—now—whether they work with an advisor, or they’re [investing] on their own.”
“We’re trying to get scale,” she added, “but not just by throwing bodies at it.”