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Apex Clearing To 'Extend' Business Model

Features for advisors and to support online marketplaces that let users invest—straight from the marketplace's platform.

Custodian and clearing firm Apex Clearing announced the launch of Apex Extend on Tuesday. The modular applications that make up Extend will offer front- and middle-office capabilities, rounding out the extant back-office technology the firm is known for.

The feature’s new capabilities mean users will no longer have to employ teams of developers to build their own front end to plug into Apex. Support for layers like risk management, compliance, trade monitoring and advisor and investor interfaces are all included in Extend, as either build-your-own or white-labeled options.

It’s “a ‘brokerage in a box’ solution,” said Jonathan Krieger, head of strategic partnerships at the firm, in a statement. “Any firm can launch a digital brokerage or advisory platform in a matter of weeks at a fraction of the time and cost that was previously required.”

Extend sets up two new business avenues for Apex. On the advisor side, certain users, such as broker-dealers who might offer self-directed capabilities to clients, will now have the opportunity to provide more wealth management services that they themselves have developed, said Krieger.

Advisors with smaller accounts or specific objectives for those accounts would be able to offer Extend as an alternative solution to a “super comprehensive” platform, said Dustin Kirkland, chief product officer. Advisors using the features can create their own models and perform block trading, with Extend supporting the workflow management needed to execute tasks.

“This would be an advisor who doesn’t already have an established relationship with one of the big guys,” such as Orion, Kirkland added.

The other avenue can be summed up as a “non-traditional” opportunity. Online marketplaces like Uber, Lyft and Airbnb see a huge amount of money flow through their platforms every day. Those companies have strong digital presences and good software developers, but they’re not financial services companies.

Apex would like to change that—or at least change that perception.

Apex Extend allows buyers and sellers on online marketplaces to potentially invest earnings or earn loyalty points in the form of fractional shares of stocks—on the spot—said Kirkland. “We’re seeing a lot of opportunities with non-traditional, not-really financial services companies that have a keen interest in creating a product around investments or brokerage,” he explained. With commissions no longer an obstacle, it’s easier to offer investing to a broader range of users.

Instead of an Airbnb host or a Lyft driver earning money and cashing out from their platform at either of those companies, Extend would made it technically feasible to allow hosts or drivers to invest money then and there. Frequent customers might even be rewarded with fractions of stocks for their patronage.

Instead of seeing firms like Robinhood eventually leave Apex with plans to develop self-made clearing and custody services, Apex is trying to offer more services to retain business. Extend, which has been in the works since late last year, is meant to provide “a robust, full-stack turnkey technology offering,” as the company’s CEO, Bill Capuzzi, said in the announcement.

“We think we’ll have a deeper, richer relationship with clients,” added Kirkland. “We do see this as a much more comprehensive offering.”

Apex Extend Infographic_2.png

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