Photo: Lisa Du, Business Insider
Jamie Dimon is a major voice in this week’s New York Magazine’s cover story on Wall Street’s business model. The piece is called ‘The End Of Wall Street As They Knew It,’ and it basically breaks down what is forcing the industry to change its compensation practices.As you probably noticed, Jamie Dimon is a media darling, so he’s already publicly said a lot of the things he said in the article. We did manage to catch something new though, and it paints a really good picture of where the JP Morgan CEO thinks Wall Street is going.
“Companies big and small will still need underwriting, credit, capital management, and advice. McKinsey did a report that showed that the credit needs of multinationals are going to double in the next 10 years,” he said. “The net worth of the world is going to double in the next decade. Institutional funding will double in the next 10 years. We’re a store, you can buy bonds, FX, advice—we provide great products at a great price. That store is not going to go away. If you’re a big, smart investor and we can give you the best price and the best service, you’ll still be coming here, just like Wal-Mart and Costco.”
There are two things that spring to mind when you read that quote. First thing’s first: 6 years ago anyone who compared Wall Street to Wal-Mart probably would’ve gotten laughed out of town. Wal-Mart is about as far as you can get from the super luxe image the industry has enjoyed since the 1980s. It sounds like an insult.
But it’s really not. Dimon’s saying that Wall Street will survive. It will look different, but the demand for what Wall Street can sell — the traditional stuff, the advice, the simple products — is still there and increasing. Pension funds need Wall Street, and they’re not going away. Emerging markets need Wall Street, and they’re not going to turn back and shrink their economies if they can help it.
Obviously this isn’t to say that investment bankers are going to be wearing smiley face stickers and name tags anytime soon, but it’s definitely a change.