Recently appointed head of the Registered Investment Advisor (RIA) channel for JPMorgan Funds, Steve Lundquist will be responsible for the business strategy of the institutional advisor group and managing the sales and national accounts teams. After leaving Fidelity Investments, Lundquist joined JPMorgan in 2001, when the firm's entry into the intermediary channel was just taking place. Staff Editor Kara P. Stapleton spoke with Lundquist in late July about his new position.
Can you talk about your business strategy for the channel?
There's really three pieces. The first thing to look at is that we deliver insight and market intelligence that we believe is unique from our organization to the channel. You'll see us try and capitalize on that in a couple of different ways. One of the things that we hold on an annual basis is our Wealth Management Symposium. Somewhere in the neighborhood of 100-120 of the top advisors across the investment advisor channel will come spend a couple of days with academics speaking about such things as asset allocation principles, the use of alternatives in portfolios, structured notes, market and economic commentary, and so forth. We just did our tenth annual a couple of months ago. In addition to that we host three Alternative Investment Forums.
Secondly, we have nine relationship managers that work on three different teams representing the east, west, and central parts of the U.S. There are about 1,400 advisors in the space, and we're trying to target the top 1,100 or so, which would get about $200 million in assets under management (AUM). The team-based approach is more like our managers as consultants to the advisors. They're getting out there and trying to understand and work with these advisors in regard to their business, how they implement portfolios, asset allocation design, and so forth.
The third piece is the product capabilities that we can deliver to the channel. There are a number of them that are unique strategies. For example, a portfolio we're having a tremendous amount of success with is the Tax Aware Real Return--a portfolio where we marry high-quality municipal securities with CPI swaps. There's a big opportunity with munis, and we've got the ability to deliver a very tax-efficient form of income to the client. Also, because of our partnership with JPMorgan's investment bank, we have the ability to offer structured notes to RIAs. These notes come in a couple of different formats--they can be standard off-the-shelf notes, or we have the ability to custom tailor notes, specifically to the needs of an advisor or advisory firm.
How much of JPMorgan's funds are distributed through these RIAs?
I think probably a better way to answer that is to look at our business overall. We have about $400 billion in AUM for our mutual fund business. From that, you're going to find roughly $350 billion is in the form of mutual funds. We also handle separately managed accounts and that's somewhere in the ballpark of $10-15 billion. The remainder of that comes from our sub advisory relationships. As a firm, we have $1.2 trillion AUM.