JPMorgan to Impose Fees on Low-Balance Chase Private Client Customers
(Corrects first sentence to show that $150,000 minimum includes balances in savings and investment accounts.)
In another example of big banks’ push to glean more assets from mass affluent branch customers, JPMorgan Chase & Co. next month will begin charging a monthly service fee to Chase Private Client customers whose start-of-month balances fall below $150,000.
The fee will be $35 monthly. Balances in basic business banking accounts will not count toward the minimum requirement, according to notices customers are receiving from Chase Private Client head Frank Barbieri.
Chase will begin assessing the fee on November 8, but will not deduct it until next year to give customers time to contact their private client banker “to discuss a plan to increase your balances,” according to Barbieri’s letter.
If the accounts remain under $150,000 as of January, Chase will “automatically transition them to an appropriate deposit product based on their balances,” the Chase spokeswoman said.
Chase launched the private client program in 2007 for customers with more than $250,000 in assets but who don’t qualify for its Private Client Direct minimum of $5 million and its J.P. Morgan Private Bank minimum of about $10 million.
The bank is currently soliciting branch customers to upgrade to private client status by offering them $2,000 if they deposit $250,000 into new J.P. Morgan personal investment, checking or savings accounts (a checking account is a prerequisite to a saving account), and maintain the balance for at least 90 days.
Private client benefits include ATM fee waivers, “discounted” mortgage rates, a dedicated service line and access to a Private Client consumer “banker” who can supplement credit products with financial planning and no-commission online trading, according to a Chase website.
While building its consumer wealth base, J.P. Morgan has reorganized wealth management for high net worth and upper high net worth clients, saying its market share is disproportionate to its size. The new U.S. Wealth Management business combines some 4,000 bank branch advisors with approximately 450 traditional J.P. Morgan Securities brokers. In May, the bank restructured sales management of the consumer bank advisors.
Chase is not alone in challenging customers to upgrade low-balance private banking accounts with carrots and sticks.
Morgan Stanley in January introduced a CashPlus brokerage account for advisors to market for clients to manage their “short term investment needs. It has a $15 monthly service fee that is waived if customers automatically deposit $2,500 monthly, or have average daily balances of $25,000 a month and are enrolled in an online program and have another Morgan Stanley investment account.
On its higher-interest CashPlus Platinum brokerage account, Morgan Stanley charges $45 a month. The fee is waived if customers arrange for a recurring automatic monthly deposit of $5,000 and also meet the $25,000 daily average balance, online and investment account criteria of the lower-end program.