Tag Archives: brokers

Financial Services for the Masses

JP Morgan has gotten considerable attention in the press for a recent statement that serving clients with less than $100,000 in assets is unprofitable.  Not surprisingly, one response to this statement has been to frame it in terms of the message that financial institutions just want rich clients and don’t want to spend their time working with the small guy.  The broader story is quite interesting and has long-term implications for both financial services firms and their clients.

Smaller customers (those with less than $100,000 in the bank) are looking less attractive as clients these days for two reasons:

1) Low interest rates mean that a bank makes less money on its deposits.

2) New regulations have capped the fees that banks can charge for a range of services.

One of the persistent themes in the investment advisory business has been Continue reading