Earlier last year, Apex Clearing agreed to merge with Northern Star Investment Corp. II, a special purpose acquisition company led by Jonathan Ledecky, co-owner of the New York Islanders, to go public. But last December, the SPAC withdrew from the merger agreement.
Apex CEO Bill Capuzzi said this week at Advisor Circle’s Future Proof Festival in Huntington Beach, Calif. that the fintech may consider going public again if markets improve.
“If markets recover over the next 24 months, perhaps the path for us is another attempt to go public,” Capuzzi said. “Otherwise we will continue as before.”
He also said the company has no intentions of being acquired.
“The industry loses if we are taken over by someone bigger.”
Capuzzi spoke about the future of the custody business, which is now dominated by a few big firms including Schwab, Fidelity and Pershing. Unlike some of these competitors, Apex has remained purely business-to-business and will continue to partner with consultants.
For Advisors, Apex handles all account opening, funding, trading, moving funds in or out, all tax services and billing.
“The difference from the guys you all know — the Schwabs and Fidelitys — is that we’re kind of insane about how to get friction out of all these things,” Capuzzi said.
For example, if a document contains missing or inaccurate information, a consultant will typically receive a “not OK” or NIGO. But Apex sends an immediate response, which is wrong with the account.
Olivia Eisinger, general manager of advisory at Apex Fintech Solutions, said another differentiator is that Apex advisors can help serve a broader mass of clients with a very digital experience. Advisors can scale their business with things like fractional shares and notional trading.
“Advisory firms can use essentially the same strategies — if risk tolerance is appropriate — for clients of all sizes, not just their high net worth clients.”
Eisinger says some advisers are still concerned that the custodians with direct client businesses are competing with them for clients.
“There’s still a concern that advisors will want to work with a custodian that’s obsessively focused on building better infrastructure to solely support their business,” she said. “Part of that is working with the tech companies and the wealth managers and bringing the community together better to support the advisors.”
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