By Brett Philbin
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- JPMorgan Chase & Co.'s (JPM) Bear Stearns brokerage is in growth mode, a year and a half after it was bought by one of Wall Street's banking giants.
Bear Stearns Private Client Services has recruited more than 70 financial advisers in 2009--the most in its history--and plans to open two or three new offices next year, its first new office openings in 15 years.
The growth comes as JPMorgan Chief Executive Jamie Dimon recently said at a securities industry conference that the bank would like to more than double the size of the brokerage force to 1,000 advisers, with a specific goal to recruit top-tier talent. In recent years, major brokerages have increasingly focused on attracting brokers who manage money for the richest of the rich.
The JPMorgan unit has some high-net-worth clients, but its average client account is $5 million. Bear Stearns manages $55 billion in assets under management, up from $45 billion a year ago. Revenue has also climbed 4% from the year-earlier period.
In an interview with Dow Jones Newswires, Bear Stearns CEO Barry Sommers said the business has "completed the transition process [after it was acquired] and is poised for growth."
After beginning 2009 with 324 advisers, Bear Stearns now has 380, with most of the new recruits joining from major competitors known as wirehouses. Many were also high-producers, who had an average of $1.1 million in annual production and managed $160 million in client assets.
Sommers said the new recruits weren't simply replacing departures.
"Our attrition [rate] is close to zero. In a very volatile market, we have had four brokers leave to go to the competition" over the past year, he said.
Bear Stearns has seven major offices in cities including New York, Boston, and Chicago, as well as seven smaller satellite offices. The brokerage's expansion plans include setting up new locations in the Houston market, in the mid-Atlantic region, and in Florida, Sommers said.
"It may be all three, it could be two out of three or another [location] that we may throw in there," he said.
While other major firms such as Bank of America Corp.'s (BAC) Merrill Lynch and Morgan Stanley Smith Barney have large brokerage forces of more than 14,000, Bear Stearns plans to maintain its smaller, boutique size.
"Most of these firms have more offices than we have people and have a lot of open seats to fill," but Sommers said the firm has the "ability and flexibility" to be more selective in hiring and has easier time providing resources to a smaller advisory force.
-By Brett Philbin, Dow Jones Newswires; 212-416-2173; brett.philbin@dowjones.com