JPMorgan To Buy Fintech Company OpenInvest To Better Serve Wealth Management Clients

Financial services giant JPMorgan Chase & Co. JPM is making a bolt-on acquisition that will help accelerate environmental, social and governance capabilities for its wealth management clients.

What Happened: JPMorgan said Tuesday it has agreed to buy OpenInvest, a fintech company providing values-based financial solutions that helps advisors unlock the true impact of their clients' investments.

JPMorgan said OpenInvest will retain its own brand and will become a part of its Private Bank and Wealth Management client offerings.

The companies did not divulge the terms of the deal.

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Why It's Important: OpenInvest, backed by venture capital firms Andreessen Horowitz, Y Combinator and QED, among others, was founded in 2015.

"Clients are increasingly focused on understanding the environmental, social, and governance (ESG) impact of their portfolios and using that information to make investment decisions that better align with their goals," said Mary Callahan Erdoes, CEO, JPMorgan Asset & Wealth Management.

The financial giant sees OpenInvest as a powerful resource for its advisors to use in helping clients personalize their investments. The acquisition will also help advance the bank's strategic focus on sustainable investing.

"Our partnership with J.P. Morgan combines leading ESG technologies with America's largest bank and the ability to reach nearly half of all American households," said Joshua Levin, co-founder and chief strategy officer, OpenInvest.

JPMorgan Asset Management recently acquired 55ip, another fintech focused on delivering tax-smart investment strategies through model portfolios. Over time, the company expects to leverage OpenInvest's ESG capabilities with 55ip's tax-smart investment strategies to deliver customized solutions to Private Bank and Wealth Management clients that are values-aligned and tax-efficient.

JPM Price Action: JPMorgan shares were adding 0.63% to $155.30 at last check Tuesday. 

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