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J.P Morgan makes push for affluent clients here

Rochester and all of Upstate New York are fertile ground in the pursuit of affluent clients, the head of JPMorgan Chase & Co.’s private wealth management practice said.

Joseph Kenney Jr., CEO of J.P. Morgan Private Wealth Management, and Northeast Regional Director Adam Green were in town last week to meet with JPMorgan’s board of advisers for middle market banking and to meet current and potential clients.

J.P. Morgan Private Wealth Management is a $150 billion business, one of the largest in the country. Kenney and his team target families with at least $2 million in investable assets. Some 20,000 families in Upstate New York fit those criteria, Kenney said.

"Nobody across the industry, including ourselves right now, has more than 5 percent of the market share," Kenney said of upstate.

JPMorgan wants to change that.

"We’ve had a long-standing commitment to Upstate New York, and we think the opportunity is terrific," Green said.

"The factors that go into determining the quality of an opportunity certainly include the number of high-net-worth households and the rate at which that number is increasing or decreasing. Rochester has plenty, and Upstate New York has plenty."

Green’s territory includes New York, Connecticut, Massachusetts, New Jersey, the Philadelphia area and Washington, D.C.

New Yorkers bear one of the highest tax burdens in the country, which has led some of the state’s wealthiest people to relocate to other parts of the country. Paychex Inc. founder and chairman Thomas Golisano’s decision to become a Florida resident is among the most publicized moves.

Green, however, thinks there are plenty of prospects still to be plumbed.

"Our chief investment officer jokes about the rising tax rates (in New York) and the expected rising of rates in the future as ‘Escape from New York,’" Green said. "The tax rates, and expectations around that, are real. But we don’t see much of the actual movement of people to escape rising tax rates.

"That’s possibly because there aren’t that many places to go. The whole country has the burden of a gigantic expansion of the fiscal spectrum. But also, it’s really very difficult to uproot. There probably are a few headline cases, but not so much as a proportionate total."

Kenney agreed. He also thinks New Yorkers are not being affected by the recent recessionary conditions any more than people in the rest of the nation.

"It has been severe and painful for everybody across the country, whether you have a lot of money or don’t have a lot of money," he said.

"The clients that really felt it are the ones that were really overleveraged. You think about the businesses that actually did that, and how much in loans actually took down companies and other firms. It does the same thing to individuals. You could have a lot of money, but if you have too much leverage it doesn’t work."

Those with the least leverage, in a home or an investment portfolio, are in the best shape financially, Kenney said.

"For us, it’s not always saying here’s the best investment in the world," he said. "It’s about looking at the balance sheet. Are you holding it the right way? Do you have the appropriate amount of leverage? Do you have the appropriate amount of liquidity?

"We basically go through a cycle like this every seven years. So why is this so much of a surprise? It’s more severe, yes. But it shouldn’t be a surprise."

Kenney joined JPMorgan in 1988, working in its domestic loan syndication and emerging market loan swap department. He joined the private bank operation in 1991 and became Private Wealth Management CEO in February 2008.

Joseph Rulison is the managing director and market manager for private wealth management in Upstate New York. He oversees 35 Private Wealth Management employees on the fifth floor at the Chase Tower and one employee in Syracuse.

"We have two opportunities," Rulison said. "One is the client that thinks we’re Chase (the retail bank). We are JPMorgan Private Wealth Management. We have to get them to realize that Chase is our retail, but we are not just retail.

"We can provide investments, trust, banking, custody … we have a whole range. We have to get those clients that are with us to understand that JPMorgan has all these services to offer. That’s a big challenge."

The second opportunity lies with those who know the JPMorgan name but not what it offers, said Rulison, who joined JPMorgan in May after being the Rochester market president at Bank of America Corp.

Kenney said the meetings with clients here are important.

"The most important thing for us is to be out on behalf of our clients and prospective clients," Kenney said. "That’s when we get to learn about what they’re doing and what’s happening in the local market and what we can actually do to help with all those components.

"And also, these guys are running businesses. They really know what’s happening. They see what’s happening to their businesses. We get to learn a lot, and that gets incorporated into how we measure portfolios and key points in the market and the economy."

12/11/09 (c) 2009 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail [email protected].

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