JP Morgan Chase Makes Private Client More Attractive By Turning on Online Brokerages

At BestCashCow, we’ve been big fans of Jamie Dimon and what he has done with Chase over the last decade in the post-crisis financial world.

On the consumer side, Chase has tremendously outperformed its peers (Citibank, Bank of America and Wells Fargo) in every way imaginable and they have generated exciting credit card products. However, while they offer exciting cash bonuses to those who live in certain areas and open new accounts, they have yet to become competitive with their savings and money rates.

A thrust for Chase has been its Chase Private Client Services, where they offer a host of services if you maintain $250,000 in assets (such as free ATM access worldwide). However, so far, this offering has yet to be compelling against the offerings that Morgan Stanley and Merrill Lynch present to people of similar wealth. And, smaller competitors with compelling new checking account offers – like that of Radius Bank – provide a lot of the same services as Chase’s Private Client Services (including reimbursement of ATM fees) while delivering an interest rate above 0.03%.

In order to try to make its consumer offerings and Private Client Services (and its other consumer offerings) more attractive, this morning Chase has announced that it will be introducing a new digital brokerage service next week. The application, which will make access to its equity research and portfolio tools available to all of its 47 million users, will give its Private Client Services customers unlimited trades.

While Chase’s move is interesting, we have to question how compelling it will be for most users. The major online brokerages – Etrade, TDAmeritrade, Charles Schwab, Fidelity, Ally Invest – have all been competing against each other for years to make online trading very inexpensive (see our comparison of online brokers here). They also offer very compelling cash incentives to attract and maintain your business. Some are even offering interest on invested cash in cash accounts that is slightly below the best online savings and money market rates.

So, while we think retail customers should welcome Chase’s latest move, it is unlikely to move the needle for most customers considering Chase’s Private Client Services.