‘There’s no ceiling’: JPMorgan’s Kristin Lemkau on the path from CMO to CEO, modern wealth management, and women’s rise to top banking jobs

Welcome to?Human Capital, an open exploration of the ideas and people moving financial services forward. In each edition, we feature a leader or rising star who’s changing the game in his or her own way. “Finance is an apprentice business,” one often hears in this sector. Here are some of the teachers. Click Subscribe above to be notified of future editions.

Kristin Lemkau sees past roadblocks.

She’s not blind to them. In fact, she admits to them more readily than others would in her role as CEO of wealth management at JPMorgan Chase, the largest U.S. bank.

There was the pandemic, which struck three months into her new job. There are competitors that have been in the business longer. There are the tech-enabled upstarts, nipping at their heels. The labor market is tighter than ever, straining hiring. All the while, the clientele is evolving before their eyes.

But throughout Lemkau’s career and the past two years as a CEO, she has learned to drive through roadblocks. She came to the corner office from her role as chief marketing officer of JPMorgan, a path that struck industry watchers as unconventional — until they heard how and why it happened.

We discussed that and more during a recent conversation, after several people, including former subjects of this series, suggested that I get to know Lemkau. Below are excerpts from the conversation.

So, in 2019 you went from CMO of JPMorgan Chase to CEO of wealth management. How did that come about?

I’ve been at the company now for 23 years. It’s a good thing to try something new at a place where you’re already well known. JPMorgan Chase is a big place, but it’s also a place where relationship capital means a lot. I had pit-forged strong relationships with people across the firm over decades that I think were an advantage.

In how it came to me, I think a lot of it comes down to how we run marketing here. In marketing, as I always tell people, your job is to drive growth for the business. It’s not to win awards. It’s not to speak at conferences. It’s not to go to Cannes. It is to drive growth for the business.

In the consumer businesses, marketing was directly responsible for credit card acquisition, directly responsible for incremental deposit growth, directly responsible for the internal sales channels.

Following one of the operating committee offsites, Jamie (Dimon) and Gordon (Smith) and Mary (Erdoes) said to me: We are a leader in almost every business, but one where we are not is U.S. wealth management, particularly for the average investor. What would we need to do to grow that business?

We serve all wealth segments, but clearly the big opportunity for us is the 64 million Chase households where my business only has 2 million of them today. Two years ago, it was even less than that. I studied the question and did that work along with partners in corporate strategy and people who were running the businesses, and we quickly concluded that investments is just too competitive a business for it not to have direct focus, direct budget, and a direct leadership team.

And I think during the course of that work, it became clear that, having written the plan of how we would grow the business, I could run it. So I took it on.

Clearly you were prepared to take on the role. But what did you find you needed to get up to speed on?

I think this is true in every new job: I had to learn to go to the thing that I didn’t know well. Rather than focus on, for example, Dipti my CMO just because I knew her space well, I had to go to the investments part of the business; I had to get some securities licenses; I had to focus on and understand the technology and the product.

I had to hire amazing people and then trust them.

I will never have the subject-matter expertise that they do — nor should I. But I needed to know enough to be able to validate decisions.

You were starting to bring together these different businesses into a newly unified wealth division — and COVID hit three months in. What was that like?

When I started this business, I think I only had two people on my leadership team, because it was embedded across other parts of the company. Everyone else, I had to recruit.

I was fortunate in that the rest of the firm was very generous when I went out seeking my dream team. But I still had to convince people who were at the peak of their careers to come over and join me.

We had just landed on the leadership team in about March, which is of course when the pandemic struck. I think in some ways it brought us closer together pretty quickly. We were doing daily calls on Zoom. The walls between your work life and your personal life were literally coming down. We were having to make what felt like life-or-death decisions in whether our sales force would go home or not.

There’s nothing like a crisis to really forge a level of trust and intimacy and partnership that might have taken years had we all been in the office.

But I think what everybody on the team bought into was the opportunity to almost do, not quite a startup, but a smaller-scale business inside of a Goliath. We’re like David inside Goliath, where we have the resources and investment and embedded client base to be able to scale very quickly.

Let’s talk more about your plans for the business going forward. What’s the strategy? What are the challenges?

I’ll give you an overview of the different pieces of the business. There’s Chase Wealth Management, comprised of community-based advisors who operate out of Chase branches. There are just over 4,000 advisors in that business, and that’s our largest business. Then there are about 500 of our office-based advisors in what’s J.P. Morgan Advisors, which is high-end, boutique, full service. And then there is self-directed, which we started in 2018.

They are all strong, core businesses. They’re just sub-scale when you look at Fidelity, Schwab, Merrill, Morgan Stanley.

Challenge No. 1 is scaling those core businesses through investments in hiring, advisor tools and productivity, and better capabilities in self-directed, where we’re only three years in and our competitors have been in there for decades. It’s also looking at where we have gaps, like the personal advisor channel of hybrid advice, which is a very fast-growing part of the industry that Vanguard and Fidelity and others specialize in.

We can have better digital integration inside our app. We’ve got 57 million digital users and our main acquisition play is inside the branch. While the branch acquisition play is super powerful, we also have credit card clients, business banking clients, and more who are digitally active. We want to engage with them as well.

As you think about the modern financial advisor and the model for wealth management going forward, what does that look like?

It is still a very human, high-touch experience. Yes, they need to be more digitally savvy, but it is still a human-to-human connection.

People keep thinking branches will go away; they haven’t. We have 5,000 of them. Foot traffic has gone down, but branches are still powerful, and we’re expanding.

The digitized advisor I don’t think will happen in our lifetime.

Yes, some people will want some digital wealth-planning tools and experiences. But you would be surprised how deep that personal connection has forged. It’s why it is a red-hot market for advisors right now.

More than any other role in the firm that I’m aware of, when an advisor leaves, often many of the clients will follow. That’s true throughout the industry, because that connection is so strong.

I know diversity is extremely important to you, as it relates both to your team as well as to the clientele you want. How are you going about addressing both of those?

The industry has I think two challenges. We don’t have enough representation in the overall client base — both women and people of color are not invested at the same level as white men. And the industry lacks representation in the advisor ranks.

Those two things are related, but they are not the same thing and they each deserve focus. We have had good success but are not where we need to be with the community-based advisors in the branch. We recruit from the local banker population. It is a diverse group of people, but continued progress still takes focus, measurability, and accountability.

With the office-based advisors, it’s a competitive market for experienced advisors. But we are building that same type of pipeline into that population of ours through an advisor development program and an advisor growth program, where we can bring in more diverse people at any entry point.

One of the things we have to ground ourselves in is, on the client opportunity, this is hand-to-hand combat in acquiring clients, both new investors and competing for existing investors. There’s a whole group of people who aren’t necessarily investing.

More people got invested last year. Women have 50% control of the wealth and that’s going up to 55%. They will control 80% of the transfer of wealth. But only about a third of women have a financial advisor.

Women want to get more engaged, and obviously the industry isn’t hitting their unique pain points to win their business.

People say they’re focused on women, but it tends to become about events and generic education, not about what it is that they’re looking for in a financial relationship that a trusted advisor can execute.

This is a vast generalization of course, but what are you finding that women clients and prospects want?

All of the research backs up my own sample size of one of what we experience in our life: They’re super busy. They want someone who will listen to them. They don’t want to feel intimidated by the experience, or shamed because of some notion that they’re not doing enough or that they don’t know enough.

By the way, I think that’s true of a lot of people who aren’t investing. It’s not necessarily gender-specific. But that is a lot of what we found.

What do you tell them?

I would tell them the same thing I would tell anybody, which is: It’s never too early to get invested. There is value in longevity. It’s like exercise: Small steps matter.

Make it about a goal, not about benchmarking yourself daily against your portfolio. Show people what happens over a long cycle. It’s goals-based planning, which is really where the industry overall has moved to.

And the goal can be short-term or the goal can be long-term. The goal can be retirement, or the goal can be going to Bali, or it can be a new couch. Either way, start by laying out your short-term and your long-term goals.

I know you said technology won’t replace advisors. But what is its role in wealth management today?

It’s everything. This is a human business, but like everything else today, it’s also a technology business.

One, it’s the advisor’s desktop and actual experience — enabling them to serve clients better, and making that look great. Which, at least today, it does not for us.

Then, making it more interoperable with what the client sees and does, so that they can actually operate off of the same experience. Back to the example of the busy mom, I want to be able to look at what the advisor sees after I get home from work or perhaps at night, not necessarily between 8 a.m. and 5 p.m. when they’re in the office. And I want to be able to collaborate with it.

It’s also about a better self-directed experience, which is obviously a huge part of the growth in the market and where competitors like Robinhood and others have seen great success.

And then it’s a hybrid advice component, which we know has also taken off in the industry. That’s phone- or video-based advice, sometimes dedicated, sometimes just available when you need it. We need to build out that capability.

But regarding the technology, and to your earlier question of whether the advisor needs to be digitally savvy, the tech should be so good that they don’t necessarily have to be. They shouldn’t be reading a manual on the tech or the update that you just shipped them.

As people think about different career paths in finance, what do you tell them about wealth management?

Come work for me!

Sounds like you’re hiring a lot?

We are. Being a financial advisor is a great career if you care about people, if you really want to do purpose-driven work, if you want to set your own hours, if you want unlimited upside in commission.

People who connect with people do well. Yes, you need to know the markets. Yes, you need to know how to build a financial plan. But the best advisors are really ones who have empathy and like building strong relationships. That’s the distinguishing factor.

Looking at your own career path so far, what lessons stand out?

I’m one of three female CEOs in our consumer business. Allison Beer runs the card business; Jen Roberts runs the consumer bank. Both of those women succeeded women in those roles. And the three of us report to two women, Jenn Piepszak and Marianne Lake.

All five of us had what you might consider atypical entry points into our roles. Allison worked deep in the payments organization. Jen started out in operations. Jenn and Marianne started out in finance and accounting.

I think what we all had the benefit of is people identifying and appreciating the talent formula that happens to work here: being able to execute; being able to collaborate; being able to work hard; and knowing how to lead while inspiring people to follow you. Those people put us in roles where they thought those capabilities could transfer, and then had the patience as we learned the job — because everybody has to learn into a new role.

On advice, I’ve been given several that I pass on:

If you want a bigger job, make your own job bigger.

Which to me means: Don’t wait for somebody to tap you on the shoulder. Make your own job feel so big that it becomes obvious for you to take on the next thing.

Be the person everyone wants to work with.

And really, we all know who they are. We know the people who we would want on our team because we know they can execute.

And then, when trying something new, remember failure is not something to be afraid of.

By the way, five women in leadership positions like that is ahead of the curve of most other finance firms. What do you attribute that to?

Oh, it’s not an accident. The five women I mentioned, we all had the benefit of working for Gordon Smith and for Jamie. They have created an intentional, repeatable process, which is: Identify raw talent; disabuse yourself of notions like “she’s an operations person” or “she’s a finance person” or “she’s a communications person”; intentionally put them in roles that give them more optionality for leadership; be patient as they grow into it; and be thoughtful about how you stage them.

I’ve adopted it in my own organization. Two years is about a minimum amount of time that somebody should be in a role. If you move somebody every 18 months, you never really get a chance to see the kind of impact that they can have.

Three years is the right amount of time to start looking for a new experience for your best people.

Five years in one job feels too long if that job hasn’t materially changed.

If you move people around every three years or so, all of a sudden the amount of experience they have sets them up for different options in leadership. People who just keep going straight up in one org only have one option, which is the thing ahead of them. You want to create more of a lily-pad effect.

You also have to have the forums to apply that discipline: You have to have talent reviews; you have to identify who your franchise players are; and then you have to have the discipline to move them around, because managers will always want to hang on to them. As a franchise, you have to say, OK, it’s time to start plotting that next move or expanding the scope of that role; otherwise, people get stuck.

Here, the benefit is there’s no ceiling. Like, the ceiling is Jamie’s job. You can keep going if you have a set of experiences that give you options for many different jobs. Take it from me: There’s always going to be a big job open.

Join the conversation with your own take on these topics in the comments below.