JPMorgan Chase & Co. (JPM), the largest bank in the U.S., announced a municipal bond deal with LPL Financial LLC, the wholly owned subsidiary of LPL Financial Holdings Inc. (LPLA). JPMorgan opened its door to LPL Financial’s extensive network of financial advisors by providing them access to the municipal bonds market.
LPL Financial, a leading organization of independent financial advisors, can now enter the municipal bonds market through JPMorgan. The extended services of LPL Financial’s 17,500 financial advisors to this market will help JPMorgan in developing its distribution channels.
Moreover, new orders by LPL financial’s advisors will be handled the same way as JPMorgan’s and other orders submitted to the underwriting syndicate. Financial terms of the agreement were not revealed.
This partnership will enable the leading municipal underwriter JPMorgan to offer diversified financial services to its municipal bond clients, giving it a distinguishable benefit from its peers. It may also help in attracting more municipal bond issuers, which in turn will boost profitability.
This move may bring respite to the stressed $3.7 trillion municipal bond market. Since last year, the municipal bond market has been struggling due to the widespread concerns surrounding Detroit’s and Puerto Rico’s financial troubles as well as probable interest rate rise.
Currently, JPMorgan sports a Zacks Rank #3 (Hold). Some better-ranked financial stocks include BancFirst Corp. (BANF) and Meridian Bancorp, Inc. (EBSB). Both these stocks hold a Zacks Rank #2 (Buy).
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