XP Inc. (XP), a technology-driven platform, provides low-fee financial products and services in Brazil.
The company has developed a mission-driven culture and a business model that provides it with strong competitive advantages in its market. The company uses these to disintermediate the legacy models of traditional financial institutions by educating new classes of investors, democratizing access to a wider range of financial services, developing new financial products and technology applicati...
XP Inc. (XP), a technology-driven platform, provides low-fee financial products and services in Brazil.
The company has developed a mission-driven culture and a business model that provides it with strong competitive advantages in its market. The company uses these to disintermediate the legacy models of traditional financial institutions by educating new classes of investors, democratizing access to a wider range of financial services, developing new financial products and technology applications to empower its clients, and providing what is the highest-quality customer service and client experience in the industry in Brazil. The company has established itself as the leading alternative to traditional banks, with a large and fast-growing ecosystem of retail investors, institutions, and corporate issuers, built over many years that reached approximately 4.7 million active clients.
Operations
The company operates an asset-light, scalable business model that emphasizes operational efficiency and profitability. It leverages its business model to serve a diverse group of retail, corporate, and institutional clients in local and international markets, with offices in Brazil, New York, and Miami. The company currently serves approximately 4.7 million active retail clients who have an investment account with it. Approximately 24% of the company’s clients are served by one of its IFA partners, whereas approximately 76% of its clients are served through direct channels, either utilizing an account through one of its websites, or served by an investment adviser through XP Direct.
The company generates its revenues primarily by providing its existing clients with a growing range of financial products and services in which to invest their existing Client Assets already on its platform; attracting additional money onto its platform from existing investors to grow total Client Assets; and attracting new clients and money inflows onto its platform across a variety of channels to increase total Client Assets. As shown in the following chart, the company generates a significant amount of its revenues from existing clients and Client Assets, which is recurring and predictable in nature.
The company’s technology-driven business model is asset-light and highly scalable. This enables it to generate scale efficiencies from increases in Client Assets. The company conducts the majority of its business online and through mobile applications and emphasizes operational efficiency and profitability throughout its operations. In addition, between the second half of 2021 and 2022, the company entered into investment agreements with, among other entities, IFAs, and at the end of 2023 and during 2024, it concluded the acquisition of minority stakes in some IFAs, such as Manchester, Blue 3, Ável, Monte Bravo, FAMI, and SVN.
Distribution Network
The company is the main benchmark in financial advisory services in Brazil according to Folha de São Paulo, and it helped develop this sector in Brazil. The company’s distribution network has a wide range of professionals, from independent financial advisors (IFA) to internal advisors and wealth managers. The company also offers a complete ecosystem for professionals, including systems and tools, such as CRM and strategic business support for third parties.
Growth Strategies
The company’s strategic pillars include leadership in investments (such as improving segmented value proposition, expanding the company’s omni-channel distribution network, growing the company’s investment platform offering, and providing the best financial planning solution for the company’s clients); retail cross-sell; and corporate & SMB.
Products and Services
The company sells a wide range of products and services in various combinations to its clients. It has developed these solutions to provide its clients with significant differentiation and a superior value proposition versus the legacy offerings of traditional banks.
Open Product Platform
The company offers its clients and partners the XP Platform, which is an open product platform that provides the company’s clients with the broadest access to investment products in the market, ranging from its own XP-branded products to those of its partners and its competitors.
Marketing, Sales, and Distribution
The company markets its brands and value proposition through its proprietary media, and it sells its products and services through its omni-channel distribution network and online portals, which are part of its self-reinforcing ecosystem that promotes XP’s products and services.
Proprietary Media and Digital Content
The company’s media and digital content is an ecosystem of portals and initiatives that aim to democratize access to financial content in Brazil. It is composed of five key initiatives: Infomoney, XP Educação, EXPERT Platform, EXPERT Event, and XP Influencers. As the company empowers Brazilians on how to take investment decisions more independently, it helps attract, retain, and monetize its clients. The company attracts clients by providing multiple, ongoing touchpoints, which help build brand awareness, trust, and a greater familiarity and comfort level with investing. These initiatives provide the company with a strong organic flow of prospective clients and a highly efficient source of customer acquisition. With millions of users navigating through its platforms monthly, the company leverages big data analytical tools and artificial intelligence technology to help create an increasingly personalized experience that helps retain clients. The company’s content also helps its clients navigate and evolve through their journey as investors, which helps them optimize their asset allocations over time.
Infomoney – acquired in 2011, Infomoney was the largest investment-related website in Latin America, with approximately 7.5 million monthly unique visitors as of December 31, 2024.
XP Educação – a key part of the company’s mission since its founding, XP Educação is a leading financial education portal in Brazil. XP Educação provides seminars, classes, and learning tools to help investors, entrepreneurs, and executives evolve through their respective journeys and according to their specific needs.
EXPERT Platform – The company’s proprietary investment phygital content platform comprises a research group of specialists serving retail clients in Portuguese and institutional clients in English. This group produces a wide range of content, which includes insights into fixed income, equities, funds, REITs, asset allocation, economics, and politics, among others, covering from the basics to more advanced content. The company’s digital research retail platform is free and has over 868 thousand monthly visitors that come to its website, which utilizes a robust SEO strategy to attract new viewers, along with educational content and in-person events.
EXPERT Event – The company’s annual conference for clients, IFAs, and partners has become the largest investment event in Latin America. In 2024, the EXPERT event was held both in-person and virtually, and had over 84,000 attendees, including over 200 sponsors, over 170 journalists, and over 2,800 news articles written about its event. EXPERT 2024 included a roster of world-renowned speakers, including former NBA player and businessman Magic Johnson, president of Queen’s College and chief economic advisor of Allianz Mohamed El Erian, volleyball coach and entrepreneur Bernardinho Rezende, among many others.
Omni-Channel Distribution Network
The company onboards and serves its clients through its omni-channel distribution network, which enables it to deliver its products and services through a range of proprietary channels designed to provide different levels of service and functionality. These include:
XP Direct – The company’s full-service website and internal advisory teams focused on mass-affluent clients, which provides access to all of its products and more sophisticated functionality.
Rico – The company’s online-only solution for self-directed investors, which provides powerful, yet convenient and easy-to-use investment services, decision-making tools, and custom-designed educational software applications. These are delivered through a simple, attractive, and intuitive online portal that is supported by a dedicated marketing and digital media program. Online stock trades at Rico are not subject to brokerage fees.
Clear – A part of XP since 2014, Clear was the first to offer zero brokerage fees in Brazil. Clear’s goal is to provide its clients, both professional and novice investors, with the best investment experience at a low cost. One of Clear’s main highlights is an intuitive and simple Home Broker application that allows the user to invest in various asset classes in the equities and futures market, such as options, stocks, ETFs, and futures contracts, among others. Clear is a 100% digital service, with innovative collateral management tools and proprietary front ends designed for retail active traders, and is integrated with the best trading platforms available in the market.
IFA Network – The company’s proprietary distribution network of approximately 14,000 IFA partners as of December 31, 2024, who solicit new clients and help it onboard them as XP clients. These IFAs are located in 1,725 offices in 172 cities across the country and form the largest independent financial advisor network in Brazil, which is a competitive advantage for the company. The company’s IFA partners choose to work with it for a number of reasons, including: the company’s deep understanding and appreciation of the IFA business model and its promotion of IFA careers given its origins as an IFA; its dedicated suite of technology tools designed to help IFAs manage their businesses more effectively; its trusted brand and reach across Brazil; and the company’s proprietary market information, which can help IFAs reach and sell their services to customers more effectively.
Technology
The company’s technology is a significant competitive advantage for it. The company has developed a powerful, integrated suite of data-driven technology systems, applications, and development resources that enable it to differentiate XP in the market, manage all of its solutions, conduct all of its activities, and operate with low-cost advantages and efficiencies. The company is leveraging the significant technology DNA in its organization, its innovation and development teams, and agile software development methods to develop a suite of new products, services, and technology applications that engage and serve its clients across their financial journeys.
XP Genius Platform
The company’s core technology is XP Genius, which is an integrated, cloud-based technology platform with a modular architecture that is highly scalable and secure, and hosted in two fully redundant hot site data centers that operate with real-time data synchronization. XP Genius enables the company to: connect its various systems, micro-services, technologies, and environments, enabling it to expand its capabilities modularly, while maintaining an efficient architecture and software code base; power its solutions and applications across the organization with integrated data harmonized code; manage its large, valuable, and rapidly growing central database of proprietary data with the ability to access information in its data lake in real time; conduct its big data analytics and artificial intelligence initiatives, such as its online customer behavior monitoring and its machine learning techniques to identify deviations in customer information; and provide it with proprietary information and market insights from across its integrated ecosystem.
XP Innovation Development Teams
The company has also built a dedicated innovation development program, called XP Innovation. These dedicated technology resources develop and support its solutions by using agile software development methods and leveraging the company’s significant technology and data assets. These include XP Tribes, comprising two to three managers each, that help guide and support its development priorities across numerous projects, and XP Squads, comprising autonomous integrated teams of eight to ten people, including a product owner and business expert, a UX specialist, a technology leader, and several developers, that collaborate to create new technologies and solutions or improve its current offerings. These teams focus on the complete customer experience, conducting client interviews, prototyping, behavior analysis, and user tests. One of the most visible external examples of its technology capabilities is the suite of technology applications that the company provides to its clients and partners. The company’s technology evolution was followed by a deeper and broader corporate transformation process, which involved the creation of business units and integrated the company’s front office to its foundations – back office, middle office, and innovation teams.
XP Technology Apps
The company complements and enriches its XP Advisory services and XP Platform of products by developing and offering a differentiated suite of proprietary XP Apps, including cloud-based and mobile technology applications and tools, that are designed to be powerful, yet simple, attractive, and easy to use, with sleek user interfaces, or UX, that are comparable to the look and convenience of some of the top consumer technology products in the world. The company combines some of the powerful technical capabilities of XP Genius, with the large amount of proprietary data that flows through its systems, and the agile software development methods of its technology innovation XP Tribes and XP Squads to generate functionality and market insights that are value-added for its clients. As a result, XP Apps enable users to incorporate a range of activities across their customer experience journeys, such as managing their accounts, executing trades, performing custom analytics, and creating custom reports.
Bull - Pro
Bull is the company’s free, cloud-based trading platform designed for retail and institutional traders, that includes powerful data visualization, custom simulations, analytics, and advanced graphics tools that can be used from any internet-connected device, such as a desktop, tablet, mobile phone, and smartwatch. The user can analyze the main flows of the market, time and schedule trades, and conduct various forms of charting and volume and pricing analysis. In addition, the user has access to several trading tools, such as Chart Trading and DOM, that can be used to run various market and performance simulations and execute trading quickly and efficiently.
Rede
Rede is an IFA management solution application developed for a desktop environment, that was designed to help an IFA run its business. It provides a comprehensive suite of CRM, account management, and investing tools that enable IFAs to: access their customer’s information; manage their customer relationships; monitor their clients’ financial activity; develop the best investment strategies for their clients based on key performance metrics; and communicate with clients across a range of platforms.
HUB App
HUB is an IFA management solution application, similar to Rede, but designed to help an IFA run its business on the go through a mobile application. HUB also provides a comprehensive suite of tools for IFAs that enable them to: access client information in real time; manage their CRM application and organize their schedules and meetings on the go; monitor client activity, net funding, and upcoming maturities; quickly define and chart investment strategies remotely; and communicate with clients across a range of platforms and third-party applications.
XP App
The XP App enhances the company’s advisory services and product platform through a suite of proprietary apps. These cloud-based and mobile applications combine powerful technology from XP Genius with vast proprietary data and agile development methods from XP Tribes and XP Squads. This integration produces market insights and functionality that add value for its clients. The XP App allows users to manage accounts, execute trades, perform analytics, and create custom reports, encapsulating all financial activities in one app, from cash flow management to the procurement of credit products and insurance, all easily accessed and backed by its investment platform.
Nasdaq Services Agreements
On September 16, 2021, the company entered into a master services agreement with Nasdaq Technology AB, or ‘Nasdaq AB,’ for the company’s trading services, or the ‘Trading Platform Agreement,’ and its market surveillance services, or the ‘Market Surveillance Agreement’ (and together with the Trading Platform Agreement, the ‘Nasdaq Agreements’).
In order to provide, fulfill, and support the company’s products, services, and platforms, it has built a robust yet efficient operations organization that leverages its technology to onboard its clients, provide high-quality customer support, and conduct its fraud prevention and risk management. These support functions include:
Customer Onboarding
The company’s client onboarding process is primarily a digital experience and highly efficient. Prospective clients must register on a web-based platform and enter their basic identification information, such as name, date of birth, and government ID number, as well as their residential address and financial data, such as monthly income and total assets. This process is highly efficient and compliant with Brazilian banking regulation and international anti-money laundering and know-your-customer best practices. All information registered by its prospective clients is verified and validated through third-party data services that integrate automatically with its systems through its API applications. On average, this validation procedure takes less than two minutes to be completed and for prospective clients to be informed whether their application was successful or not.
Once a client account is opened, the client is able to log in to the platform and respond to the suitability questionnaire. Based on their answers, clients will be informed about their investment profile classification and the products suitable to their profiles. Once the suitability process is completed, clients are able to browse the website, get information of all types of investments available, transfer money to their XP accounts, and proceed with investments.
Customer Support
The company’s customer support organization serves its clients across multiple brands and channels, providing support online or by phone through its efficient automated technology tools, client relationship personnel, and help desk personnel. The company’s customer support organization professionals are highly trained and have the appropriate market certifications to interact with clients about its financial products and services. The company’s customer support personnel are also encouraged to continue to enhance their training and raise their qualification levels through in-house courses and additional financial certifications.
For customers of the company’s XP-branded services, such as those that reach it through XP Direct or its IFA network, the company provides dedicated support depending on the customer profile. For example, depending on the client profile, its first level of support may be a dedicated advisor, who maintains a close relationship with the client, understands their needs, and offers solutions to any questions they have or issues they want to resolve. The company’s second level of support may be its centralized help desk personnel that are available to answer any operational and technical questions about a client’s account via telephone, chat, and email. For customers of the company’s Rico and Clear branded online services, its first level of support may be its automated technology tools, such as its self-help tools and chatbots. The company’s second level of support may be its specialized help desk personnel, who can be reached online, through email, and dedicated communication tools, such as online chats and a dedicated WhatsApp application, as well as via telephone.
The company closely measures its clients’ satisfaction and overall happiness with its services, across all of its brands, through quality indicators and surveys, such as NPS and CSAT. These metrics are directly linked with the company’s internal customer support personnel evaluation and compensation, which reinforces its team alignment and commitment to providing high-quality customer service. The company is also highly focused on delivering a highly positive overall client experience and intends to continue investing in this area. It has a specific team of professionals that are dedicated to coordinating client experience improvement projects across each point of customer contact throughout its organization.
Competition
The company’s primary competitors are traditional financial institutions, including Itaú Unibanco, Bradesco, Caixa, Banco do Brasil, and Santander. The company also faces competition across business units, particularly from other financial services companies, such as BTG Pactual, Safra, Nubank, and Inter, among others.
Seasonality
The company’s revenues have been strongest during the second and the last quarter of each year (year ended December 31, 2024) as a result of performance fees of mutual funds from both its own asset management business, as well as third-party funds distributed through its platform. In addition, the company is also impacted by the number of business days in each quarter, which affects its trading and brokerage businesses.
Regulatory
Five of the company’s subsidiaries, XP CCTVM, Banco XP S.A., or ‘Banco XP,’ XP DTVM, Banco Modal, and Modal DTVM perform activities that are subject to regulation in Brazil by the Central Bank. As required by the applicable Brazilian regulation, they must possess authorizations from the Central Bank in order to operate, as follows:
XP CCTVM is authorized by the Central Bank to be constituted and operate as a securities broker; carry out operations in the foreign exchange market; and receive direct or indirect foreign investments of up to 100% of its capital stock.
Banco XP is authorized by the Central Bank to operate as a multi-purpose bank. On October 10, 2019, the board of officers of the Central Bank granted Banco XP’s authorization to operate as a multi-purpose bank, with both commercial and investment bank activities, as well as to carry out transactions in the foreign exchange market. The authorization was published in the National Official Gazette (Diário Oficial da União) on October 11, 2019. On November 13, 2019, the Central Bank authorized direct or indirect foreign investments in Banco XP of up to 100% of its capital stock.
XP DTVM is authorized by the Central Bank to, among other activities, carry out public offerings and distributions of bonds and securities, provide securities portfolio management services, and carry out operations in the foreign exchange market.
Banco Modal was originally founded under the name Modal S.A. DTVM and, in July 1999, started its activities as a multiservice bank with investment bank activities. In 2004, it began to manage an asset portfolio and to develop activities related to private equity. In September 2015, Banco Modal incorporated a new company, Modal DTVM, when it created a new investment channel focused on retail customers (Modalmais).
Class B Bank Branch & Trust License – Since January 1st, 2023, Banco XP is licensed by CIMA to perform banking, investments, and trust activities.
Eight of the company’s subsidiaries, XP CCTVM, XP DTVM, Modal DTVM, XP Gestão, XP Advisory, XP Vista, XP PE, and XP Allocation perform activities that are subject to regulation in Brazil by the CVM. As required by the applicable Brazilian regulation, they are authorized to operate by the CVM, as follows:
XP CCTVM is authorized to provide securities broker-dealer services, securities portfolio management services (exclusively to its own proprietary portfolio), and securities custody services;
Each of XP DTVM, XP Gestão, XP Advisory, XP Vista, XP Allocation, and XP PE are authorized to provide securities portfolio management services.
Modal DTVM is authorized to provide depository services, distribution, portfolio management, administration, bookkeeping, and controlling of investment funds activities.
Two of the company’s subsidiaries, XP Investments and XP Advisory US, Inc., or ‘XP Advisory US,’ perform activities that require registration with and regulation by appropriate regulatory authorities in the United States, as follows:
XP Investments is registered as a securities broker-dealer with the SEC and in twenty-six U.S. states and territories; registered with the U.S. Commodity Futures Trading Commission, or the ‘CFTC,’ as an introducing broker; and a member of the Financial Industry Regulatory Authority, or ‘FINRA,’ and the National Futures Association, or the ‘NFA,’ self-regulatory organizations overseen by the SEC and the CFTC, respectively; and
XP Advisory US became registered as an investment adviser with the SEC on January 30, 2019. XP Advisory US was previously registered as an investment adviser in the state of Florida.
One of the company’s subsidiaries, XP Private Holding UK Ltd., or ‘XP Private UK,’ is a holding company, with no operations. On June 16, 2021, XP Private UK sold its subsidiary, XP Private (Europe) S.A. In December 2021, by virtue of the sale of XP Private (Europe) S.A., XP Private UK decided to write down its other subsidiary, Chameleon Bravery Unipessoal Lda (‘XP Portugal’). Currently, XP Private UK does not hold equity in any entity.
Two of the company’s subsidiaries, XP Corretora de Seguros Ltda., or ‘XP CS,’ and XP VP, perform activities that are subject to regulation by SUSEP. As required by the applicable regulation, both have obtained authorizations to operate from SUSEP, as follows:
XP CS, the company’s insurance broker-dealer, is authorized to operate as an insurance brokerage; and
XP VP, the company’s insurance company, is authorized to operate life insurance and private retirement plans.
The company’s main subsidiaries in Brazil are subject to extensive regulation, such as those applicable to banks (in the case of Banco XP and Modal), securities and foreign exchange brokers (in the case of XP CCTVM), securities portfolio managers (in the case of XP Gestão, XP Advisory, XP PE, XP Allocation Asset Management Ltda., and XP Vista), insurance companies and insurance brokers (in the case of XP VP and XP CS, respectively).
SUSEP is an independent agency in charge of implementing and conducting the policies established by CNSP and the supervision of the insurance, coinsurance, retrocession, capitalization, supplementary retirement schemes, and brokerage. SUSEP neither regulates nor supervises the supplementary retirement entities that are regulated by the SPC, and the operators of private healthcare assistance plans, which are regulated by ANS. With the enactment of Supplementary Law No. 126 on January 15, 2007, the CNSP and SUSEP are also responsible for the regulation of the Brazilian reinsurance market.
CNSP is made up of one representative of each of the following bodies: Ministry of Social Security, the Central Bank, Ministry of Economy, Ministry of Justice, the CVM, and the superintendent of SUSEP — Private Insurance Authority.
XP CS is an insurance brokerage company focused on life and retirement insurance brokerage, duly licensed by SUSEP to operate in the insurance market as per SUSEP Circular Letter No. 510 of January 22, 2015, and registered with SUSEP under No. 10,0628468.
Insurance companies, such as XP Seguros and XP VP are required to be duly licensed by SUSEP in order to operate in any given insurance field and are subject to the local legal and regulatory framework governing their operations, governance, solvency, products, accounting, actuarial standards, and other technical aspects of their business.
Insurance brokerage firms, such as XP CS must obtain SUSEP registration and authorization for their operations, pursuant to the rules in force and in accordance with Law No. 4,594 of December 29, 1964, as amended, or ‘Law No. 4,594/64,’ and Decree-Law No. 73/66. The insurance broker, whether an individual or legal entity, is the intermediary legally authorized to solicit and promote insurance contracts accepted by the current legislation, between the insurance companies and individuals or public or private legal entities.
XP Investments is registered as a securities broker-dealer with the SEC and in thirty U.S. states and territories, and is a member of FINRA, a self-regulatory organization, or ‘SRO,’ subject to SEC oversight. Consequently, XP Investments and its personnel are subject to extensive requirements under the Exchange Act, state securities laws, and SEC and FINRA rules, including requirements relating to, among other things, sales and trading practices, recordkeeping, anti-money laundering, financial and other reporting, supervision, misuse of material nonpublic information, and the conduct and qualifications of certain personnel.
XP Investments is also registered with the CFTC as a swap dealer, an introducing broker, and is a member of the NFA, an SRO that regulates certain CFTC registrants. CFTC-registered introducing brokers are subject to expansive requirements under the Commodity Exchange Act and CFTC and NFA rules, including requirements relating to, among other things, sales practices, regulatory capital, anti-money laundering, financial reporting, supervision, and recordkeeping.
XP Investments UK LLP is registered at New Penderel House, 4th Floor, 283-288 High Holborn, London WC1V 7HP, and has 1 Poultry, London EC2R 8EN, the United Kingdom as its commercial place of business. XP Investments UK LLP is authorized by the FCA to advise and deal in investments as an arranger since April 10, 2017, and to deal in investments as an agent and principal for eligible counterparties and professional clients since August 1, 2019.
Intellectual Property
As of December 31, 2024, the company did not own any Brazil-issued patents or copyrights. The company owns a number of trademarks, including XP, XP Investimentos, XP Private, RICO CORRETORA, CLEAR CORRETORA DE VALORES, INFOMONEY, and TECFINANCE, as well as XP Inc., in the United States, and other valuable trademarks and designs covering various brands, products, programs, and services, including EXPERT CONVENÇÃO NACIONAL XP INVESTIMENTOS. The company also owns a number of domain names registered in Brazil, including ‘xp.com.br,’ ‘leadr.com.br,’ ‘rico.com.br,’ ‘clear.com.br,’ and ‘infomoney.com.br,’ and abroad, such as ‘xpi.us.’ As of December 31, 2024, the company held a 21.83% equity interest in ‘O Primo Rico Midia, Educacional e Participações Ltda.,’ with the remaining interest held by the company’s partner, Thiago Lolkus Nigro, who owns the trademark PRIMO RICO.
History
XP Inc. was founded in 2001. The company was incorporated in 2019 as a Cayman Islands exempted company.
