The war in Ukraine and worsening inflation raising fears of a recession didn’t leave any time on J.P. Morgan Chase’s first-quarter earnings call for CEO Jamie Dimon to discuss the company’s substantial financial advisor recruiting gains.
The firm’s private bank and J.P. Morgan Wealth Management added more than a combined 650 registered representatives on a net basis over the past year — a notable haul that marks at least the third quarter in a row that has seen more than 500 new advisors join the company. Understandably, though, the analysts who spoke with Dimon on a call after the megabank reported its earnings on April 13 focused primarily on the potential threat of a recession.
Dimon reminded them that he “can’t forecast the future any more than anyone else” and that “everyone’s wrong all the time,” according to a transcript by investing website The Motley Fool. Some aspects of the “very strong underlying growth” of the economy are “not stoppable,” Dimon told them, citing the strength of businesses and credit and $2 trillion he said that consumers have in their savings and checking accounts. On the other hand, there are “two other very large countervailing factors” with the inflation and Russia’s invasion of Ukraine, he said.
“Wars have unpredictable outcomes. You’ve already seen it in oil markets. The oil markets are precarious,” Dimon said. “That’s another huge cloud on the horizon, and we’re prepared for it. We understand it. I can’t tell you the outcome of it. I hope those things all disappear and go away, we have a soft landing and the war is resolved. OK? I just wouldn’t bet on all that. Being a risk manager, we’re going to get through all that. We’re going to serve our clients, and we’re going to gain share. We’re going to come to that earning tremendous returns on capital like we have in the past.”
The bank caught a jittery Wall Street by surprise by putting $900 million aside to be ready for the worst, on top of the more than $5 billion in reserves it freed up last year in case of potential loan losses during the pandemic, The Wall Street Journal reported. Its stock price slumped after the earnings, adding to its declines during the recent equity volatility.
However, the metrics most important to financial advisors and other wealth management professionals looked far rosier. For coverage of the firm’s fourth-quarter earnings, click here. To see the main takeaways from J.P. Morgan’s first-quarter earnings, scroll down our slideshow.
Note: The firm doesn’t break out specific wealth management metrics across its organization, which includes the Global Private Bank in its Asset & Wealth Management division and J.P. Morgan Wealth Management in the Consumer & Community Banking segment.