When JPMorgan Chase & Co. agreed to merge with Bank One Corp. in 2004, Jes Staley, head of the former’s asset management arm, got a friendly warning about his new boss, Jamie Dimon, from a longtime colleague of Dimon’s. Staley had championed a closed-architecture strategy at JPMorgan Chase’s private bank, whereby the bank offered wealthy clients only its own in-house investment products. But Dimon, the Bank One CEO who would soon take the top job at JPMorgan Chase as part of the merger, had long advocated that banks adopt an open approach and offer clients a variety of products, including funds developed and managed by other firms. He had clashed over the issue with Sanford Weill’s daughter, Jessica Bibliowicz, when she was Dimon’s subordinate running Smith Barney & Co.’s mutual funds in the 1990s, a dispute that some insiders believe led her to leave the firm.
“He’s your boss now,” Staley recalls the colleague warning him. “You might want to rethink your view.”
Staley did no such thing. Instead, the veteran banker stuck to his guns, arguing with — and eventually persuading — Dimon that his closed approach was the right way to go because it underscored the need for the bank’s fund managers to deliver strong performance. He also managed to win Dimon over to the idea of buying a hedge fund, Highbridge Capital Management, something the CEO had strongly opposed. “Jes was a breath of fresh air,” Dimon tells Institutional Investor, referring to the debate over closed architecture. “He said from the start, ‘We have to perform for the client.’” ....