JPMorgan, the Dimon Principle and Fiduciary Duty

The meaning of the statement “the bank (is) a fiduciary…” begins to take shape in this document. 

Siedle notes the JPM document language suggests fiduciary duty may not apply when JPM executes trades or sells alternative investments. Additional language lists a host of “Conflicts of Duty,” but offers no explanation of the implications of the conflicts for the investor, or opportunity to provide explicit informed consent on each conflicted transaction. Numerous circumstances are mentioned where additional fees or expenses may be levied against the client, but there is no explanation as to the amounts of fees or expenses. Further, the bank may “effect” the purchase or sales of securities for the client account “which may coincide,” coincidentally, with the purchase or sales of “the same Securities” … of “the account of Morgan affiliates.”   

It appears when the bank representative said the bank was a fiduciary with “respect to the client’s accounts” he or she meant only some of the accounts some of the time. The Dimon Principle is as high—or higher—a standard as is the Volcker Rule. 

A central question for retail investors is whether what JPM suggests is its fiduciary duty rule meets the higher demands of the Dimon Principle.