Building The Future Show - Radio / TV / Podcast

Kevin Horek: Welcome back to the show.

Today we have Bill Capozzi.

He's the c e O at Apex.

Bill,

Bill Capuzzi: welcome to the show.

Thanks so much for having

Kevin Horek: me.

Yeah, I'm excited to have you on the show.

I think what you guys are doing at Apex
is actually really innovative and cool.

But maybe before we get into all
that, let's get to know you a little,

you a little bit better, and start

Bill Capuzzi: off with where you grew up.

Sure.

I grew up in, in New Jersey.

Uh Okay.

Very cool.

Small town, uh, is kind of
Northwestern, New Jersey.

Uh, and, and, you know, and
lived there from the time I

was about three until about 21.

Kevin Horek: Okay, very cool.

So walk us through, you went to
university, what did you take and why?

Bill Capuzzi: So, uh, I
came out of high school.

I went to, uh, small school in, in
Connecticut called Wessling University.

Uh, and it was a liberal liberal
school, so there was, it wasn't

a lot of different choices.

Uh, and I had an affinity towards science.

I liked to figure out how things worked.

I like to kind of understand the
sort of ergonomics of things.

And so, um, and I had a sort of
desire to go to med school and so,

you know, undergrad, okay, how do you
get all the medical requirements done?

How do I, you know, engage in
classes that are interesting to me?

I'm gonna be an
environmental science major.

Uh, and so four years at Wesleyan,
I came out the other side with a

BA degree in environmental science.

Kevin Horek: Okay.

Interesting.

Bill Capuzzi: Keep going.

Yeah, so, you know, you come outta
school, you know, like I said, I wanted

to go to med school, uh, and, uh, you
know, like a lot of people, even today,

I came out with a lot of debt, right?

Sure.

Yep.

You know, the question was, okay, how
do I go to med school, take on even

more debt on top of what I already had.

So I said, okay, I'm gonna,
I'm gonna work for a few years,

um, I'm gonna make some money.

I'm gonna pay down the loans that I
have, and then I'll get to that med

school thing, you know, down the road.

So I came out, uh, I went
to work for an environmental

engineering firm as a scientist.

Uh, and I learned pretty quickly,
I would say after the first two

years that my calling in life
was not to be an environmental s.

Why was that?

Sorry?

Why is that?

Uh, it was, um, I was
on the road in a, a ton.

Okay.

I was out in the field,
which was interesting.

Um, but it's, um, my ability to
actually have an impact, it was hard

for me to see what I was doing was,
was making the world a better place.

Um, ah, and I was a, you know,
I was a young man working for

this big company, and so I was
a small fish in a gigantic pond.

And so you also had sort of an
interest and a desire to, to really

do something, um, and own something
and, you know, create something.

Um, and so still didn't have, didn't pay
down the debt as much as I had wanted.

Um, uh, and you know,
what do you do, right?

So I'm, I'm 26 years old,
um, and, uh, I go and work at

Rutgers University, uh, and.

The reason I went to work at
Rutgers University is because they

had a program where if you worked
there, you went to school for free.

Oh, interesting.

So, and so I, I took over the alumni
records department, uh, of Rutgers

University and, um, which was an
amazing experience in of itself.

I had 12 all women all over the age of 50.

All, uh, were part of the
union, so unionized, uh, group

of people that worked for me.

This is the first time I had
ever managed a person in my life.

Wow.

And here I am, 26 years old, managing, uh,
a group of women that were my mom's age.

Uh, so that was for sure an
interesting, uh, experience, kind of

my first foray into managing people.

Um, but again, the, the, the crux of
that, and the amazing thing for that

was I got to go to school for free.

Sure.

Uh, so I got my mba.

Um, Uh, and now it's, it's,
you know, right before the turn

of, uh, you know, into 2000.

And, um, you know, what do you do?

I have an mba.

I have this environmental science degree.

Uh, and, um, I went to
work in this MBA program.

I got selected in this MBA program
at this firm called D lj, which,

um, from many of people probably
listening to this, don't know what D

LJ is, but it was an investment bank.

Uh, it was Donaldson, Lufkin Genere.

It was an investment bank private company.

Um, and it was an amazing culture,
uh, really a neat company.

So I spent a year as part
of their MBA program.

Um, and at the end you get selected,
you either get asked to leave cuz

they don't, they don't think that
you're part of the, uh, the long term

for the firm, or you get selected
to go work within some part of d lj.

Okay.

Um, and at the time, so I, I got selected
to go work at this firm called Pershing.

They owned this company called Pershing.

Uh, it was in Jersey City, New Jersey.

Um, and we're talking 1999.

Jersey City was not what it is today.

It was not a, it was, it was
a little scary, to be honest.

Um, and it was, Pershing was
this bowels of our industry.

So the rest of the MBA students were
going to work in investment banking.

They were doing merchant banking.

They were working in trading.

And I get selected to go to Jersey
City, New Jersey and work within

the bowels of our industry, this
clearing firm called Pershing.

Um, and again, at the time I remember
it saying, what did I do wrong?

Why did I get, oh wow.

Why did I get selected or
banished to the Gulag, right?

Called Pur.

Um, And, you know, these things
all tied together, right?

So I had this desire as a young
person to learn how things were, you

know, sausage was made and how, you
know, things connected with science.

And Pershing was, uh, as it turns out,
sort of the, the original clearing

firm for most of the US trading
in most of the retail business in

our, in our country at the time.

Oh, fascinating.

Yeah.

And, and I, so I learned how the system
worked, you know, and I realized how

broken the system actually was, how
overly complex the infrastructure was, the

embedded costs, the conflicts of interest.

And this wasn't just Pershing,
this wasn't a Pershing issue.

This was, this is how the industry worked.

Uh, um, and it really kind of lit
that fire for me around, okay, there's

a better way, uh, that the backend
of, of our industry, this investing

industry, there's just a better way.

So I left Pershing, uh, helped start
a company called Convergex in 2005.

Um, I led most of their technology,
um, their international business.

Um, we did prime
brokerage options trading.

I also managed the clearing business
as part of this firm that I helped

found, um, called Convergex.

And while I was there, I'll
make the connection into Apex.

There was this firm for sale called
Apex, and it was back in 2015, right?

So this is 10 years later after I
helped found the company, Convergex.

This company, apex came for sale and
okay, I tried to buy it, uh, from the,

the parent company, which is still
the parent company Tape peak six.

Uh, and the reason for it was I knew
it was this little tiny company.

Right.

It had, uh, you know, uh, let's
call it couple dozen clients.

It supported roughly a million,
little over a million end customers.

But I knew what was, you know,
go back to my Persian days.

I knew what, uh, what it could be.

So I tried to buy the
company from peak six.

I was unsuccessful in buying it.

Um, but Matt and Jenny, who were the
founders of peak six, uh, were successful

in convincing me to come across.

Um, and here I sit almost 10
years later, uh, really of heaven.

Um, I think really changed the
industry, um, really from the bottom up.

Um, and we can get into exactly
Apex is doing, but it really is

around building a better way, right?

How investing should work
really through the lens of b2b.

Kevin Horek: Okay, sure.

So maybe let's step back.

So when you bought or tried to
buy Apex, or didn't buy Yep.

It became aboard Apex, what was it doing?

And then walk us through
its journey to what Apex is

Bill Capuzzi: doing today.

Yeah, sure.

So, um, there's a little bit
more to the story I'll add.

Um, so peak six, the parent company
acquired the assets of a company called

Penson, which was a public company at
the time and ran into major issues.

And Penson was effectively, uh,
what's called a clearing firm.

A custodian.

Um, and they supported a whole
bunch of different clients.

Um, but they didn't really, they,
they got spread way too thin.

They supported this new FinTech world.

They supported international,
they supported what's called prime

brokerage and they didn't have
the right risk controls in place

to manage what they were doing.

Um, And again, from my time at
Persian, I'll tell you I learned

a lot about how to manage risk.

Um, and uh, so peak six stepped
in and bought the assets

formed Apex and they owned it about a year
and realized, Hey, we, we don't really

know how to run a clearing business.

Um, we really need somebody that
really understands either sell it

or let's try and find somebody that
really understands what this could be.

Um, and so they tried to sell it, which is
when I stepped in and said, Hey, I'll buy

it from you, cuz I knew what it could be.

Um, and, and through my conversations
with the two founders, you know,

we just kind of clicked, right?

And they were really interested in this
notion of making sort of this world of

investing frictionless for everyone.

And the, the, the bones, the structure
of that failed Penson, uh, that I stepped

into back in 2015 was already supporting
the likes of people like Wealthfront

and Betterment, uh, people like Scott
Trade, uh, that no longer exists.

Um, so there were a number of firms that
were already in that ecosystem of Penson

into Apex, early Apex, that were looking
at the world of investing through a

different lens, and we're looking for a
partner in Apex that was gonna take out as

much friction from the system as possible.

All right.

And again, I knew what was possible
for my time at Pershing, and so

I, I stepped in as c e o Again,
there was very few clients, very

few end clients that we supported.

Uh, you know, and just to give you
some sense, let's call it, there's

a million and a half clients, end
clients that we supported back in 15.

Today we're close to 25 million.

Wow.

Um, so there's been really
massive that that's huge Years.

Yeah.

10 years, really massive growth.

What's that?

In 10 years?

That's huge.

Yeah.

It's, it's a lot of hard work.

But, you know, I think the, the,
the premise of, uh, the company, the

purpose of the company is to help
every person on the planet invest.

Um, and not too surprising when
you look at the profile of the

customers of 25 million customers
that we support, it's largely Kevin.

It's largely young people,
and the accounts are small.

Right.

Versus if you were to look at what was
at Pen or at, uh, Schwab or Fidelity

today, where a fraction, um, the account,
average account size is a fraction

of what, what a, you know, typical
advisory account would look like.

Right.

Kevin Horek: Interesting.

Okay.

So how somebody use Apex or
how does that kind of work?

Like, can I just start using Apex?

Do I have to go to an
institution that uses Apex?

Walk us through

Bill Capuzzi: that.

Yeah, so, um, so we're
purely B2B company, right?

Which means that there is some, some
company that's going to use Apex, uh,

to support Kevin, the end customer.

Okay.

Got it.

And, and they come in really
two, broadly speaking, two forms.

They either come to us as what's
called a registered investment advisor.

So think an advisory firm
that's gonna provide passive

investment solutions right to you.

Okay?

So think Betterment as
a good example, right?

Betterment is an advisor, okay?

Um, or they're gonna come in the form
of what's called a broker dealer, right?

And effectively, largely speaking,
or you know, dealers are offering

the ability for you to buy and sell
individual securities or fixed income

instruments or options or cryptocurrency.

Um, and what Apex does behind the
scenes is allow them to bring that

amazing experience to life, right?

So if you were to go on and open an
account at Stash or Weeble or SoFi or

Goldman Sachs, Marcus, the investing
side, um, the back end of what's happening

in terms of that UI experience is Apex.

So we do the account opening.

You know, the instant account opening,
um, the funding of those accounts,

of the funding rails, all of the
trading, like I said, where it said

equity and option, fixed income,
cryptocurrency, mutual fund will do

all of the cost basis tax reporting,
the statements, the confirms all of

the settlement of all of those shares.

Um, everything that happens sort
of behind the scenes think of us

as this platform that packages that
up and, and provides that in a, as

best as possible frictionless way.

Got it.

Okay.

Kevin Horek: Very cool.

So you said something earlier though,
is that you're trying to level a playing

field to basically let anybody invest.

Is that correct or am I, am I missing?

That's right.

Speaking there.

Okay.

So if I can't use the platform
directly, how are you doing that?

Bill Capuzzi: Yeah.

And this is, this is the, the beauty
of, of Apex and our partnership with

the firms that we support, okay?

It is truly a symbiotic
relationship, right?

So the purpose apex help every
person on the planet invest.

Well, I don't have direct end
customers, but what my job is,

is to, you know, partner up with,
you know, let's pick on SoFi Sure.

To create this amazing
experience for Kevin, right?

You want to go on their app,
you want to use their tools.

You wanna maybe pay down your,
your, you know, student loan.

You wanna buy some.

Passive investment in, you know, have
a 401K or an IRA account at SoFi, maybe

you wanna buy some cryptocurrency.

Um, uh, so their job is to
make that experience amazing

for you, the end customer.

My job is to provide the plumbing
that, that platform that sits beneath

them so thinks sort of, you know,
the Shopify of investing, right?

Think the Twilio of investing Got it.

Of sorts, which is, you know, our
job is to effectively allow for

SoFi to do this and do it for people
that, you know, are frankly the

undesirables in the investing world.

Right?

So, you know, if you walk into a
traditional advisor today in the

United States, typically their
minimum account size is somewhere

between 500,000 and a million dollars.

Yeah.

Which is not, well think about how, how
many people in our country can actually,

this is you're talking, writing a check
for $500,000 and saying, here, just

invest this, this is investible money.

This isn't net worth.

This is like writing a check.

How many people can do that, right?

Yeah.

Um, and there's a lot less people
that can't do that, and That's right.

Right.

And so part for us is how do
you ring out all of the friction

so that someone can show up and
invest a hundred dollars, right?

Yeah.

A thousand dollars.

And we can do that in a, you
know, sort of on-brand way.

So that end customer typically a young
person, it's sort of akin to what

their lives are like, you know, started
using their phones through an app.

And then two is do it profitably, right?

Right.

Which, you know, go back to the
traditional players, you know, from a

competitive standpoint, this is where
the Pershings, the Fidelity, Schwabs.

Even if they wanted to try and support
that cohort of people, they just

can't because of the infrastructure
that's in place at those firms.

Got it.

Kevin Horek: That makes
No, that makes total sense.

So how, but then how do you do that?

Because like, take the a hundred
dollars example, it's probably not

worth the banker's time to do that.

So how are you making it worth their time?

Well,

Bill Capuzzi: um, it, it can be, right?

So, okay, so there's
two, there's two parts.

One is, let's just take you, Kevin, to
the extent that SoFi puts their app out

there and says, okay, it's here for you.

Right?

Okay.

And you're going to do all of
the work to set, set that up.

Got it.

There's not a person.

Okay.

That's the copy of you're, you're
typing in your name and your account

and or your, your address and your
social security number, right?

You're doing the work to make the
connection between your Bank of America

account, let's say, or Citibank.

And this account, you're doing all the
work to make the connections happen.

What we're doing behind the scenes is
making it happen seamlessly, right?

So when you press the button, the
account immediately opens, right?

No friction, no paperwork.

Um, and then the goal is for Kevin
to continue investing, right?

Right.

So, to your point, if all we ended up
with is you took a hundred dollars put

in this account, that's the last time
you ever put any money in it, um, great.

Maybe it becomes 110, 120, right?

This is, this is that premise on, hey,
people should be investing, even if

it's small amounts, cuz it compounds.

Yeah.

But the, the, you know, the goal is for
Kevin to continue dollar cost averaging.

Right to continue to put money into
this account over time and build wealth.

Um, and so you start small and, and
you know, the, the premise here, we

go back to the symbiotic relationship.

This is where the job of the SoFis, or
the Publix or the betterments is to engage

with Kevin, the end customer and, and
teach you how to properly invest, which

means keep putting money in over time.

And our job is to make that all
happen in a really seamless way.

Got it.

Okay.

No,

Kevin Horek: that makes total sense.

So I'm curious then, and you can
correct me if I'm wrong here.

Traditionally I, and I think it's
getting a lot better, but banking

apps aren't necessarily known to be
the best kind of user experience.

So how are you fixing and changing that?

Because if your target market is
somebody that's gonna use it on

their phone, You need to nail the

Bill Capuzzi: experience.

Totally agree.

Yeah.

Look, I mean, you know,
and it's still there today.

You know, the, the experience today,
what I call is up, over and down.

Okay?

And what I mean by that is, okay,
you have a banking world, right?

Think me as an individual, I have a
banking app with my checking and my

savings account, I have my investing
accounts, I maybe have some loans.

And today it's all up over and down,
up over and down to connect the dots.

Um, and it's better than it was, but
it's certainly not, like you said, a

great experience where Apex does step in.

And let's, let's use Ally as a
good example, ally as a client of

Apex, connecting the dots between
the banking part of Ally and the

investing part and making it such.

Kevin, if you're a banking client of
Ally, you can very seamlessly press a

button and move money across in both
directions, between investing and

banking, um, and make it look like
one versus the up over down, right?

Another example is Goldman Sachs, right?

So the banking part of, you know, Goldman
Sachs, Marcus, and the investing part

Apex provides the ability to actually
move money in what's called journaling.

Journaling, real time between
the two kind of silos, right?

Or the swim lanes.

Our job is to make that happen, obviously
has to be done safely, securely as to

follow all the rules in our industry.

Um, but our job is to make that
happen real time and make it

feel like it's a sort of, uh, you
know, the, the, the experience

for the end customer is seamless.

Kevin Horek: No, that makes sense.

So then are you actually building the
app for your client or they're basically

integrating with Apex and you guys
have a bunch of APIs or, and services?

Like how does

Bill Capuzzi: that work?

Yeah, it's a, it's a great question.

Predominantly, um, we're
an API shop, right?

Okay.

So, got it.

This goes back to that
symbiotic relationship.

The last thing I want to be involved
in is, is changing screen colors

and, and being involved in that sort
of end client experience, right?

We're great at plumbing, we're great
at bringing these things to life.

So by and large, everything
Apex does is via real-time api.

Got it.

Kevin Horek: Okay.

Very cool.

Which actually saves them a ton
of time and effort in dev cost.

Totally.

And nevermind all the other
stuff that surrounds that.

Right.

Yeah, that's right.

Just the, the speak, and you can
correct me if I'm wrong here.

This, the stuff I've done in banking
before, it's, they're like, well, we

need to release this, like, stupid.

Maybe this is a stupid example, but I, I
think it can get my point across is, yeah,

they're like, well, we need to release,
you know, uh, face unlock for phones,

but it's gonna take us, you know, five
years because that's just where we're at.

It's like, well, no, like, we need to,
you need to launch that in like six

months, because five years from now,
who knows if face unlocks gonna be a

thing, it might be something totally
different, or it still might be here.

Like, it's just unacceptable to roll
out a feature in years from now.

Bill Capuzzi: Yeah, and I, I, I would
even say you mentioned six months.

I mean, we, we think in weeks, oh,
even better, maybe even in, in months,

single digit, you know, sort of, of one
to two months, just even to launch, you

know, take all of our APIs, you know,
a, someone can launch an investment

product in this new world that finance.

Right.

The ability to leverage an apex and
be able to stand up an investment

solution, um, it should happen in
somewhere between a month and two and

Kevin Horek: the other,
which is almost unheard of.

Correct?

Yeah.

Sorry to cut you off, is like, it's
unheard of in the, in the banking

industry, I would even argue most
industries, but banking is very

Bill Capuzzi: slow.

Yeah.

We're kind of a, we are a one
of one for sure, as a company.

Got it.

Um, and, you know, look, this all
happens, you know, it's also an

incredibly regulated environment, right?

So you have the S e C, you have
finra, you have the O C C D T

C C, of which I'm on the board.

Um, and that comes with Apex, right?

So it's not just amazing technology.

I think the, the moat around Apex
in part is obviously the technology

that we just talked about.

But it's also providing the ability to
sort of, you know, sort of a, a solution

that navigates through all of the crazy
Byzantine rules that, that sort of, you

know, sort of, uh, you know, persist
throughout this investing world, right?

So, sure, we don't, we don't cut corners.

We dot every i, we cross every t as it
relates to the regulations, and that

comes as part of this package, right?

Again, which you take this great
technology and you marry it up with

literally hundreds of years of experience
in this kind of bowels of, of investing

the s e c world of Vera world, right?

The CFTC world.

All of that comes as part
of this B2B package that we.

Got

Kevin Horek: it.

Okay.

Very cool.

So then how do you guys
monetize the platform?

Do you charge like a subscription model?

Is it per access?

A bit of both.

Walk us through that.

It it's,

Bill Capuzzi: it is, it's a,
it's a bit of both, right.

And so, okay.

You know, as part of this regulated
world, we act as both this sort

of B2B SaaS platform and this
regulated what's called a custodian.

Um, and so I'm holding, so Kevin
goes on to public or Stash, you

open an account, you move money
over into this investment account.

Apex is actually holding your money
and or the things you invest in.

And so we're safeguarding
those assets for you.

Right?

It's what's called fully disclosed.

You're on the books of Apex.

And our job is not just to be the
SaaS provider, but actually be the

regulated entity that the S E C would
look at as protecting Kevin's money.

Um, and so your question about,
okay, so then how do you make money?

Part of it is a subscription
fee for leveraging the, the,

you know, the, the platform.

Um, and then the second part
of it is through transactions.

So when you make a trade, you, uh,
you move money in and out, um, you

generate a confirm or a statement.

There are transactional fees that we would
charge to our, our B2C counterpart, right?

So the betterment, mustaches, the weevils,
those firms would pay us, um, either

subscription and or transactional fee.

And roughly speaking, you can kind
of think of, you know, our revenue

streams today, it's roughly 60%
subscription, roughly 40% transactional.

Got it.

Okay.

Kevin Horek: Interesting.

That makes a lot of sense.

So I, I wanna dive a little bit
deeper into one thing you mentioned.

So, when you're, when Apex
is holding the money mm-hmm.

Is that for, like, how does that work?

So do you guys, are you guys basically
almost like a bank in yourself?

And, and I, I could be wrong with
this comparison, but is that what, why

Robinhood had to stop trading or one,
the claim they had to stop trading?

When people, when the, the Bitcoin
thing was going crazy a couple

years ago where they basically
said they like ran outta money.

Is, is that the same thing?

Different?

Like, how does that work for you?

You guys?

They're

Bill Capuzzi: two different
things and explain both, so, okay.

Sure.

The first is, do we act as a bank?

Um, not in the way where you
have a checking or a savings.

Okay.

But if you move money out of your, let's
just say you're, you're a, you know,

you're a banking customer of Citibank.

Okay.

You move it out of your checking
account into this brokerage account

that's, that's, you know, under
sort of the, the banner of SoFi.

Okay.

Yep.

That cash sits in what's called
a brokerage account, and Apex is

the custodian of that account.

Oh, okay.

And the two things that are gonna sit
in that account, it's either gonna be

cash or it's going to be securities.

Right?

Right.

And, um, will support and safeguard
both when there's cash in the

account, um, there's interest
that's earned on, on, on that cash.

So in that respect, it kind of looks
like, you know, sort of a, a bank-like

product, but it's under this world of,
of brokerage and not under the world.

Does that make sense?

Yeah.

Kevin Horek: No, that totally

Bill Capuzzi: makes sense.

Okay, the second question, go
back to the meme stock, um, issues

back in 2021 with, with Robinhood.

Um, who, by the way, Robinhood started
with Apex, was a client of Apex.

Um, we helped spawn that firm, which I'm
proud of, of, you know, back to the point

around, you know, democratizing investing
and helping every person on the planet.

Robinhood decided to do what
Apex does, themself got it

right, which was a mistake.

Right?

And of course I'm gonna say that as a
ceo, but you know, they've run into a

lot of issues, most notably what you
just described, which is the issues

that they have around meme stock.

And what happened there was, it wasn't
about customer cash, like your customer

cash at Robinhood was protected.

It was that the way that the industry
works for buying and selling securities

is that that firm, the custodian actually
has to have enough cash, their own

cash on hand to settle those trades
versus whoever was on the other side.

If you bought stock, there's
someone that sold, right?

Right.

And there's an industry utility
called dtcc, where I mentioned before.

I'm on the board of that sits
in between buyers and sellers.

But what you need to have is enough cash
owned by the custodian, in this case,

Robinhood, to facilitate the amount of
buying and selling that you're doing.

And what happened for, for Robinhood
is they did not cash, they did not

have enough liquidity that was owned
by Robinhood to facilitate the amount

of activity that they were doing.

So effectively what the industry, in
this case, DTCC looked at and said,

you are doing way too much business
relative to the amount of capital,

cash, liquidity, whatever words
you want to use, that Robinhood the

company had in their bank account.

And that created this massive problem for
them, that created over that course of

that weekend that they had to go out and
raise with, you know, public information.

They had to literally go raise 6
billion to be able to support the

amount of activity that they were
doing on behalf of retail customers.

Got it.

So if

Kevin Horek: they never moved
away from you guys, would

you have solved that problem?

Yeah,

Bill Capuzzi: we would've
solved the problem.

That's our job.

That's one of the things.

It's not just about SaaS, it's, it's,
it's a really complicated industry.

And this is why we're a one of one.

It's like, okay, we can open accounts
in seconds, we can do real time funding,

we can send out electronic conference.

We do all this stuff
really cool tech-wise.

But at the core, you actually
need also need to know how to, you

know, manage collateral, how to
manage treasury, how to support

all these things that are happening
behind the scenes in our industry.

And oh, by the way, follow all the rules.

That's really hard to do.

Sure.

Especially when you know, you know,
was the last thing I was gonna say

is especially this is that symbiotic
relationship I talked about.

Robinhood should focus on building an
amazing experience for the end customer.

Leave all this plumbing to somebody else.

Right?

And this is why you see the likes of the
SoFis and you know, the clients of of

Apex today really having successes because
they're leaning hard into their sweet.

Right, which is the B2C client
experience, the ui, the UX experience,

and leaving this stuff, the plumbing,
uh, to apex to take care of.

Interesting.

No,

Kevin Horek: that, that
makes a lot of sense.

Yeah.

Interesting.

Well, and the other thing too is
just in, in, in your case then,

is you can handle if a client or
customer blows up, like in a good way.

I mean like if they get really, really
popular and all of a sudden you have

the infrastructure to support that.

Right?

Where as somebody that's built
software like that can be very, very

challenging to scale up almost instantly.

Bill Capuzzi: That's right.

If you tried to do this yourself, Kevin,
as you scale and like you said, blow

up it, it obviously requires additional
kind of focus and attention and build.

Um, but it also requires more capital to
be able to percent support this business.

Yeah.

Um, and the one cool thing for us is
that we build something once and we

provide it to every one of our customers.

Right.

The challenge for somebody like
a Robinhood today is that every

time they're building something,
it's to keep up with Apex.

Cuz what we do is we'll build
retirement accounts, we'll give it

to all 300 of our customers to be
able to offer retirement accounts.

Then Rob Robin has to
build those things one off.

Right.

Or their business.

Right.

Fair enough.

No, that makes

Kevin Horek: sense.

Interesting.

And then yeah, then they become more
loyal to you and it's actually a

really smart business from your guys'
angle of like, once you're in you

can upsell them till forever Really.

And they're never gonna go anywhere
because it would take forever for

them to build it all themselves.

Bill Capuzzi: Yeah.

It just doesn't make a lot of sense.

Right.

Yeah.

If we're smart around pricing,
if we're fair in terms of

how that, that pricing works.

Go back to the, you know, overuse,
the word symbiotic relationship,

but it's, it's, Hey, you
focus on what you're great at.

We'll focus on what we're great at, and
together we'll do something amazing.

Right?

And so I'm really proud sitting in the
seat for my team that, you know, the

Apex team, you know, we had a million
little over a million clients in 2015.

We fast forward 2023, there's 25
million people that we're supporting

like that, that that's awesome.

It's awesome, right?

Kevin Horek: Yeah, that's totally,
well most companies ever get that

kind of success on scale, right?

Bill Capuzzi: Yeah.

Especially in that period.

I mean, I, you know, think about,
think about, okay, so yes, you

know, pat myself on the back.

Great, great team effort,
apex 25 million people.

But then you think about how many
people on the planet today sure.

Don't have an investment
account, have not saved a dollar.

Towards their in invest, you
know, towards their future if

not invested a single dollar.

And the numbers are staggering.

Right.

So I'll just give you a one statistic.

Roughly 2% of of Indians, you know,
on, you know, country of India,

roughly 2% have an investment account.

Oh, wow.

98% of the people in India
have never invested a dollar.

Wow.

Right.

And so the opportunity is, is great.

Yeah.

25 million.

Everyone would be proud.

You think that there's, there's
literally hundreds and hundreds of

millions of people out there that,
you know, are still needing our help.

Right.

And so the, the purpose of Apex is
alive and well, and, and, you know,

the, the path is next time, Kevin,
we talk in a few years, the number's

not 25, it's, you know, it's 50 or
a hundred million end customers.

That, that's

Kevin Horek: actually a perfect
segue into my next question for you.

How does Apex support companies outside
of, you know, the US or or North America?

And it's sounds like you're
working if it doesn't already

work kind of globally or a lot of

Bill Capuzzi: places in the world.

Yeah, it does.

So it's, it's funny, it's probably the
largest growing segment of Apex is Sure is

firms outside of the US that want to, you
know, get access to the US market, right?

So hundred percent we can
settle trades all over the

world, but not too surprising.

Most people outside of this country
want to invest in the US markets.

Hundred percent.

Uh, and so the vast majority of what
we do in terms of our international

business is to help companies outside
of the US provide the ability for

their clients to access the US markets.

So I'll give you a good example.

Sure.

Um, I, which is one of the largest
banks in Brazil, um, has this

massive, uh, you know, customer
base of all Brazilian nationals.

Um, and what they are doing with Apex
is taking our APIs, building it into

their banking product in Portuguese,
and allowing for customers, just like

I talked about with Ally doing it
for their Brazilian national clients.

People sitting down in SA, Paolo, or you
know, Rio, um, opening accounts within

the I Tahu world and being able to take
Brazilian real, move it to dollars and

invest in fractional shares of Tesla.

Right?

So somebody wants to spend $200 and buy
$200 of Tesla, they can do that, and it's

all happening through the ITO front end.

And the back end is Apex.

Very cool.

Kevin Horek: How, like if I say
in your $200 example there Yeah.

How quick can you make

Bill Capuzzi: that transaction?

I mean, it's, it's instantaneous, right?

Okay.

It's not like Dave, I guess
is what I'm getting at.

Yeah, yeah.

I mean, look, there's so, so the, the
trade is done instantaneous, right?

You put in and say, I wanna
buy $200 worth of, of Tesla.

The industry, the US industry settles
trades on what's called T plus two, right?

Okay.

That's back through that
industry utility called dtcc.

Um, so what happens is, which
is, you know, this gives you some

sense of how backwards, how much
work we still have, I should say.

But today you buy, you have the
cash sitting in your account.

So let's just say you
had $200 in the account.

You buy $200 worth of Tesla.

You actually have to wait
two business days Yeah.

Until you actually get the stock.

Totally.

Even if you had the money.

Yep.

Because the industry is still built
upon old cobalt mainframe batch systems.

Um, and it's funny cuz we, we didn't
talk much about crypto, um, and

there's a lot of, lot of, obviously
a lot of, lots of not great things

happening in the world of crypto.

One part I would tell you is that
the infrastructure, if, you know, you

just stick to the pure blockchain,
cryptocurrency trades 24 hours a day,

seven days a week, and settles real time.

Right.

Um, so the, the, the infrastructure in of
itself for crypto right, is what frankly

we should be aspiring for in the world
of equities and options for that matter.

Sure.

A hundred percent and we'll get there.

We will, we'll get there.

It'll take years.

The challenge is not, you know, it's
not, the apex is I could settle that

trade real time with you in equities now.

Right?

That real in the, the issue
is that the industry, right?

The Bank of New York's, the,
you know, in the JP Morgans, the

Citibank, the big banks, especially
in the United States, are all built

on old Cobalt, IBM m mainframe.

Right?

That works in a batch way,
which is wild to me, but

Kevin Horek: it is what it is, right?

Like, yeah.

Yeah.

Fascinating.

Yeah.

Interesting.

No, that, that's really cool.

The, it's, that's gonna be game

Bill Capuzzi: changing, right?

It should be.

All right.

Think about it.

Um, just through the lens
of a retail investor.

Say, I wanna buy stock now and I
wanna sell stock, you know, tomorrow.

Today you have to sort of wait
for transactions to settle.

Two days to get the money
to then buy something else.

It just, it sort of defies logic.

Um, and so yeah, there's, there's
strong push from the likes of people

like me and, you know, the rest of the
leadership at Apex to, to push this

industry towards that type of environment.

It's like I said, if you just look at
the crypto world, it's totally doable.

The only reason crypto can do it and the
equities can is because crypto started by

and large, whatever it is, five years ago.

And so you weren't saddled
with all this legacy, right.

Crap.

Um, in terms of how, you know, sort of
equities are, are settled today, so it's

just gonna take longer largely, like I
said, The traditional players, you know,

the big traditional players in this,
you know, this industry are, you know,

are still built on, on old technology.

Kevin Horek: Interesting.

So you guys put out a quarterly report.

Do you wanna talk about that
and what exactly is in that?

Bill Capuzzi: Yeah, sure.

So we, we put out a quarterly report,
um, and like I said, pretty neat, right?

So we have, you know, roughly
25 million end investors.

Um, and it's, they've
gotten a little bit older.

When we started this, they
were in their twenties.

Uh, when we started this, this report
was, they were in their twenties.

They're now in their early thirties,
but it's at it's squarely millennial,

um, and Gen Z right is okay, is the vast
majority of people that, that use Apex

as the, you know, that that platform.

So there's roughly, let's call
it 6 million Gen Z, and there's.

There's another, whatever it is,
10, 15 million of, of millennials.

And what we look at is what are
they investing in, what are they

buying, what are they selling?

How does, how do what they're
buying, selling look versus what

the broader markets looking like?

And um, I think a couple broad themes
over the course of the last, let's

call it two years, um, and we'll tie
it into sort of financial literacy.

Um, people are, these young people
are learning how to properly invest.

And what I thought was really cool is
that even though the market sold off

massively in 22, and for most of these
people that are on Apex s platform, it's

the first time they've ever seen this.

Okay.

Because it's kind of been up and to
the right for the last 10 years, right?

Sure.

Um, since 2018 or 2008, Um,
and so what did they do?

Right?

And you know what people, what, you
know, sort of the traditional advisors

said it was gonna happen is, oh, people
are gonna sell because they don't really

know what they're doing and they're gonna
run the cash and they're gonna move it

all over into some traditional advisor.

Um, and that's exactly what didn't happen.

Um, what people did was, um, like I
said before, dollar cost average people

put more money into their investment
accounts and found opportunities with the

market down to, to dollar cost average.

Um, we also saw, which I think
is interesting, is people move

from stock picking to more
passive investment strategies.

And, you know, I'll give
you my 2 cents on that.

I think it, you, you really didn't have
to know much to pick a stock, and it was

probably gonna go up in 20 20, 20 21.

Okay, so people thought they
were geniuses picking stock.

Um, and what happened in 22
is stocks, you know, reverted.

Right.

They went down.

Yeah.

Yeah.

And what people did is we saw a lot of
young people do is move from a stock

picking solution to something where
they took the thousand dollars and

put it in a more passive portfolio.

Um, sort of a managed account of
sorts where it was, you know, let's

just say it was, uh, you know, the,
uh, s and p 500 ETF fund, um, uh, and

less about picking individual stocks.

Right.

Interesting.

So we do this every quarter and
you know, again, like I said,

we, the whole premise of it is I.

We're one of one.

We have this massive number of clients.

We certainly have a
representative sample set.

And the whole premise of, of putting it
out there is to really kind of, you know,

get people, um, especially young folks
to read this about, okay, what, what is,

what is someone that looks like me doing?

And, and again, at a very macro
levels, teach people what, um,

what proper investing looks like.

That was gonna be my next
question to you is like, uh,

Kevin Horek: it, it's interesting because
I, there's certain things that are

taught in school that I've never used a
day in my life and probably never will.

And something like financial
literacy, arguably you use all

day, every day, whether you're like
doing act actively things or not.

Right.

Like you're thinking about it.

And so the fact that it's
not taught boggles my mind.

Yeah.

And, and so.

I guess the caveat to that question
is, is like, uh, you keep reading

online that millennials, and I'm
almost 40, so I'm like a geriatric

millennial, that like millennials and
Gen Z are, are just not where their

parents were at this time in, in life.

Is that true?

Is it just things are different now?

Like what are your thoughts and what have
you seen related to kind of literacy and,

and where generations are these days?

Because you're in the
trenches building this stuff.

Yeah.

And you actually

Bill Capuzzi: know.

Yeah.

So, so here's what I'd say,
um, and you said you're on the

geriatric side of, of millennials.

I mean, when you were 21 years old, coming
outta college, 22 years old, you didn't

have any, like, what were your choices?

If you had a hundred dollars of, you know,
200, $500, there was zero choices for you.

Because no one wanted you.

And even if they did, you would take
your $200 and, and immediately you, you

would've gotten commissioned to death.

Right.

You would've bought three trades
and your money would've all

been gobbled up in commission.

Sure.

So, fast forward 2023, what's
amazing is that we've done great

things to provide access, right?

Yeah.

And so you can take that same $200,
you can buy fractional shares of stock.

You, there's zero commission and,
um, the access is in your fingertips.

That's amazing.

Right?

Um, the, you know, the progress
we've made, you know, the challenge

I would tell you, and the thing
that I think our industry didn't

do a good job through the pandemic.

Most of what we focused on was building
all this amazing, um, infrastructure, all

this amazing access to the markets, the.

Financial literacy that goes along
with it that should have been there

is sort of playing catch up now.

So think of the in, think
of an inchworm, right?

The front of the inchworm move forward
through the pandemic in terms of

access, properly, teaching people how
to invest, um, whether it's in the

schools or through the apps or through
any of the things that we talked about

is sort of the back of the interim.

It's finally starting to catch up.

Um, but it, it wasn't there,
um, through a lot of this.

Um, and so one of the things that we
did, um, you know, within the peak Six

Apex family is we acquired a company,
um, uh, in 2021 called Zoga, Z O G O.

And for the people listening, you can
download the app Zo Go and it's basically

next generation financial education app.

And the whole premise there is, okay,
we have an obligation as Apex, we have

an obligation as the operators in this
industry, not just Apex to teach, right?

To teach people what is a bank
account, what is, you know, what

is a brokerage account, right?

What is, what is an r i a,
what is passive investment?

What is active investment?

And you know, I have four
children, um, and their dad

runs this company called Apex.

So all the stuff, amazing
stuff we just talked about.

And I'm, you know, embarrassed to
admit like they're not where they

should be in terms of literacy.

Um, and so, you know, part of that is, is
you know, we gotta continue to lean in,

um, and, you know, through things like ZO
go, um, but also through all of these kind

of business, you know, B2C companies is,
is pair access and tools with education.

Right.

So, you know, make maybe a bad analogy.

You know, you have a loaded gun.

You gotta, you gotta give somebody
the instruction manual on how

to use the gun properly, right?

Because if not, you know, you
can shoot yourself in the foot.

And, um, I think we have a bunch
of work as an industry to do that.

I also think, frankly, that the
schools, um, uh, the schools have

an obligation also to take advantage
of all these things like zoga and

make it much more of the curriculum.

You know, let's just take high schoolers,
um, because of all this access, you

know, kids can, can invest a lot
sooner than, you know, 20 years ago.

Um, it shouldn't just be
some weird elective that,

you know, some kids can take.

It really has to be part of the
curriculum to teach people how

to properly manage their money.

Not just investing, but actually
how to manage their money.

Uh, and so again, get off my soapbox,
but this is a place where I think we

gotta continue as an industry, right?

The FinTech community, all the people
you're talk, you know, that are listening

to this, we have lots of work to do.

Right?

To continue to sort of lean in and teach
people how to properly manage their money.

Right.

And in my case, had to
properly invest their money.

Nope.

Makes, makes total

Kevin Horek: sense.

But Bill, sadly, we're at a time, I
feel like we could go on another hour

or so, but how about you close with
mentioning where people can get more

information about yourself, apex, and
any other links you wanna mention?

Bill Capuzzi: Yeah, sure.

So our, our website is
apex FinTech solutions.com.

Uh, my, you know, my LinkedIn is
William Capozzi, last name is c a.

U Z Z I.

Uh, and you know, for those, those
listening that are startups that

are looking to add investing, love
to have the conversation for those

that do things someplace else in the
continuum of FinTech that want to

figure out how to connect the dots.

Those are really fun conversations
for me and for us as a company.

So I look forward to hopefully
having some of those conversations

with, with the folks listening.

Very

Kevin Horek: cool.

Well, bill, I really appreciate you taking
the time outta your day to be on the show,

and I look forward to keeping in touch
with you and have a good rest of your

Bill Capuzzi: day, man.

Awesome.

Thanks so much for having me.

Thank you.

Okay.

Bye.

Kevin Horek: Bye