Just two months after
The firm’s investment management wing will acquire 55ip, which provides tax automation technology to financial advisors, for an undisclosed amount. The deal is expected to close by the end of the year, according to Jed Laskowitz, global head of asset management solutions at J.P. Morgan Asset Management.
“Tax management is one of those things that I believe has been under appreciated,” Laskowitz says.
And it’s only going to be more important in an era of low interest rates, high volatility and possibly higher taxes, he says.
J.P. Morgan Asset Management currently manages $2.2 trillion in assets and sees model portfolios as an area for growth. The potential market for model portfolios is $3.6 trillion, according to research firm Cerulli Associates.
By applying automated tax management to model portfolios, 55ip can help advisors stand out from the competition, Laskowitz says.
“We believe tax management and model portfolios are two incredible importands trends that will impact the asset management and wealth management fields,” Laskowitz says.
After partnering with 55ip and getting a closer look at the technology and team, JPMorgan realized that owning the software could allow for deeper integration, he adds.
“Until this acquisition, we didn’t have our own proprietary tax management capabilities,” Laskowitz says. “This gives us a capability to deliver our model portfolios and our asset management capabilities in a way that we [couldn’t] before.”
While independent financial advisors can be wary of potential conflicts of interest with a fintech’s new ownership, JPMorgan plans to let 55ip continue operating as a separate entity with its own branding. Paul Gamble will remain as the fintech’s CEO, and founder Dr. Vinay Nair will serve as a consultant and special advisor to J.P. Morgan Asset Management.
JPMorgan will also support 55ip’s partnerships with third-party asset managers, investment strategists and wealth management platforms, according to Laskowitz. The opportunity to collaborate with other asset managers, even if they compete with JPMorgan’s investment management business, is one of the primary benefits of the acquisition, he says.
