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JP Morgan pushes for market share following sales team restructure

JP Morgan Asset Management head of UK field sales Mike Parsons has spent much of the past year realigning the company’s sales team and expanding its product range to meet the changing demands of the post-RDR market.

The group is now switching focus to build on its income offerings and take advantage of the Budget’s pension reforms.

Parsons was JPMAM’s head of UK intermediary sales until the end of last year when his job title changed and he was put in charge of a newly created team of stockbrokers, wealth managers and advisers across three sales teams.

A global strategic relationship management team, led by Andrew Larkin, was also created as part of the restructure to oversee advisory and discretionary fund panels and relationships with platforms and wealth managers.

Parsons says: “The implications of the RDR mean there are markedly different participants in the market now. 

“Some firms are looking to outsource all or the majority of their investments so you need a team and a proposition for this. 

“Other firms, which may have been more of a generalist IFA, are now moving to a wealth manager style of business. 

“We decided we had to specialise our sales team to provide a more targeted level of service to each of these market segments.”

Single solutions

The sales team restructure is mirrored in JPMAM’s development of single-solution products, the most recent being a multi-manager range for Tony Lanning that was launched last year. The Fusion funds range is still in its early stages but Parsons believes it will stand out in the highly competitive multi-manager space.

The multi-manager team can access research from a team of 40 analysts at JPM Private Bank, allowing it to hold strategies that many other funds of funds are unable to tap into.

Parsons says: “Getting access to strategies that others cannot means we have very little commonality with any of our competitors. In the case of four or five competitors, we only have one fund in common.

“Given that managers are generally looking through the same list of funds, that sets us apart and the ability to identify these different ideas has gone down very well with our client base.”

Parsons is also excited about the prospects for emerging markets this year. He says: “History tells you that when you get to this valuation point, you want to be an acquirer of emerging market assets with the potential to make double-digit returns at some point over the next 12 months.

“We are actively showing clients evidence of this but while they agree, many are still saying ‘But…’. A really interesting story for us will be when people start to allocate back into emerging markets.”

Income offerings

As with the rest of the asset management industry, the area that arguably offers the biggest potential for JPMAM is income-related products following the pensions shake-up announced in the Budget.

The group is planning a number of product launches that will centre on “delivering a high level of income after retirement”, says Parsons.

He says a number of JPMAM’s existing open-ended products are well positioned to meet the demands of the new income-focused market as well as its investment trust range that is the largest closed-ended offering in the UK.

Interest in the £293.7m JPM Multi Asset Income fund, which was launched five years ago, has “already gone up dramatically post-Budget”, which Parsons attributes to a “reasonably high” yield coupled with capital growth.

He says similarities with growing dividends and capital growth should also mean that closed-ended funds will become “an important feature of client portfolios in this post-retirement income space”.

Bold ambition

The expected investment flows, whether through the restructured sales team or from ongoing product development, form part of the group’s bold ambition to double its market share.

Parsons says: “We have a very clear objective of doubling the size of our business and doubling our market share over the next five years.

“We believe we are in a good place to capitalise on what we think will be a strong year of growth in the intermediary savings and investment market. 

“The RDR has been painful for all of us but the clear push from the Government to help consumers realise the state is not going to be there to help retirees in future should see the industry reap the benefits and will serve consumers phenomenally well.”

EXPERT VIEW: Ben Willis

Ben-Willis-Whitechurch-Securities-700.jpg

We have two core positions with JP Morgan that we have held for some time. We hold the £2.1bn JPM US Equity Income fund, which we backed from launch. Although the US is not a traditionally high-yielding area of the market, combined with other areas, we thought it was a way to diversify clients’ income streams. One of the hardest things about investing in the US is beating the S&P and this fund has done this consistently over time.

We also previously backed the JPM Emerging Market trust trust with this same idea of diversifying income. 

We switched to the open-ended version when it launched for liquidity reasons and also because we did not want to pay a premium when adding new clients.

Ben Willis is head of research at Whitechurch Securities

JPM top 10 best-selling funds over 12 months as of 28/02/14 (Source IMA):

Fund IMA sector Net sales (£m)

JPM US Equity Income

North America

652.2

JPM Emerging Markets

Global Emerging Markets

138.3

JPM Multi-Asset Income

Mixed Investment 20-60% Shares

138.1

JPM US

North America

94.2

JPM Emerging Markets Income

Global Emerging Markets

73.5

JPM Europe Dynamic (ex UK)

Europe ex UK

65.6

JPM US Select

North America

49.5

JPM US Smaller Companies

North American Smaller Companies

 39.1

JPM Global Consumer Trends

Global

14.3

JPM Fusion Balanced

Mixed Investment 40-85% Shares

10.7

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  1. Better try and improve performance in many of the funds first – I would have thought.

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