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Brazil's XP seeks to add over 1,600 advisors by year-end

Brazil's XP seeks to add over 1,600 advisors by year-end

Brazil's XP Investimentos is aiming to add over 1,600 advisors to its network by year-end as competition heats up in the country's wealth market.

The brokerage started the year with 3,955 individual advisors on its platform and plans to end it with 6,500, said Caio Peres, XP's business development chief for the independent wealth manager channel.

It's already made headway toward that goal, as by this week it had 4,845 advisors across 600 independent wealth firms. Known as agentes autônomos de investimento (AAIs), these companies use XP as their broker-dealer to invest their clients' assets in a wide variety of products.

XP pioneered Brazil's independent advisory model and, according to Peres, now accounts for 85% of the market. However, it has recently been facing increased competition from the likes of BTG Pactual, a rival with which it has engaged in legal battles.

The company plans to grow by continuing to target advisors employed by large banks who want to start their own firms, Peres said.

'We're trying to increase the speed [of these advisor moves], so we're talking to everyone in the market to make it [clearer] what this model is and what are the benefits of going independent,' Peres said.

XP is also leaning on solutions such as technological tools that it's developed to help advisors focus on serving clients.

'Our advisors can manage all of their clients on their mobile phones. Everything they need, they can do on their mobile phones, so they can be on the street and feel free to be with clients and not operate systems,' Peres said.

He added that the company could eventually accommodate up to 10,000 individual advisors. The firm had 240 billion reais ($59.3 billion) in assets as of this week, Peres said, having added 30 billion reais since January. 

Legal clashes

A growing slate of companies is trying to capture a slice of Brazil's wealth segment, including Andorran-firm Andbank and local giant BTG, which in 2016 launched a digital platform that lets independent advisors manage and invest their clients' assets.

This battle for market share has led to legal clashes, including a complaint BTG filed against XP with Brazil's antitrust regulator - Cade - in January.

The bank accused the broker of using 'unfounded lawsuits' and other measures to discourage advisors on its platform from even exploring joining other firms. Cade hadn't issued a ruling as of May 23, according to the entity's website. 

Another clash involved XP suing BTG in December last year to stop the bank from attempting to recruit its advisors, accusing its rival of using insider information gathered in an initial public offering process in 2016 to launch its digital platform.

In April, an appeals court granted BTG permission to attempt to entice XP Investimentos advisors to join its firm. Peres declined to comment on both cases. 

These disputes arose as independent advisors said they favored doing away with a rule that allows them to work with only one broker-dealer, Citywire Americas reported in March. XP also declined to comment on whether it supported the initiative.

In other developments, the broker-dealer got approval in December last year to open its own bank and launched a segment called XP Private dedicated to clients with over 10 million reais ($2.47 million) in assets.

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