Skip navigation

Apex To Offer Instant Settlement For Certain Trades

Apex Fintech Solutions plans to offer advisors a feature that will eliminate the two-day settlement period. They have the option of extending it to clients.

Apex Fintech Solutions, the parent company of Apex Clearing, is already looking to the second half of the year as it expects to launch an instant trade settlement feature that will effectively erase the normal two-day settlement standard for U.S. equities transactions, according to an announcement.

In providing the new service, expected to be available in the third quarter of the year, Apex will settle transactions under the normal two-day settlement period, but provide end investors with immediate access to the cash value of the trade in their account, “simulating an instant settlement process.” The product will be available to all Apex clients, including advisors, giving them the option of rolling it out to their own end investors.

Advisors and analysts expressed mixed reactions to the announcement.

“People do not want to wait for their money,” said Jacqueline Schadeck, managing partner at Capitalwize in Atlanta, which has $2.1 million in AUM. “This is definitely something clients want.”

Despite this, Schadeck viewed the feature as something that could prove “detrimental” for retail investors (Apex provides custody sevices to a number of automated investment services, a.k.a. robo-advisors), “because it will allow them to make impulsive decisions with their money, whereas right now they would have to wait to re-invest funds.”

For advisors and more experienced retail investors, however, the ability to get money reinvested will outweigh the risk of impulsiveness, she said.

Indeed, many advisors said they saw an advantage in the simulated instant settlement. Apex’s new feature would support better rebalancing for end investors, said Kelly Pedersen, founder of CAISSA Wealth Strategies in Bloomington, Minn., which manages $175.8 million in client assets.

“Being out of the market for even a couple of days in volatile markets can have negative attribution on the portfolio for timing and trading,” she said, calling the feature “a welcome improvement.”

“It would be great to not have to have the gap and not be out of the market,” she said.

But not all advisors see the benefit. 

“It's really a marketing push from Apex,” said H. Vincent Clanton, principal at Chancellor Wealth Management in Atlanta, which manages $75.8 million in assets. “It would not change investment strategies for investors.”

He did acknowledge that investors who are in “an unusual hurry” would benefit, however.

Both lines of thinking are reasonable, said William Trout, director of wealth management at Javelin Strategy and Research.

“There’s definitely a marketing angle here,” he said as Apex is preparing to merge with Northern Star Investment Corporation II, a publicly traded SPAC, later this year and wants to show its innovative side to Wall Street.

“We will continue to develop and provide innovative solutions to offer investors choices that facilitate their ability to invest when and how they wish,” said Bill Capuzzi, CEO of Apex Fintech Solutions, in a statement included in the announcement. “This offering is one of many that Apex will bring to market as part of a suite of solutions that make us the partner of choice for financial services providers looking to seamlessly integrate investments into their customer experience.”

Apex is part of a fintech-SPAC wave that also includes SoFi and, most recently, Acorns.

But Apex genuinely sees an opportunity for “getting ahead of the curve in moving to a real time model” in its equity transactions, Capuzzi said. The firm wants to be seen as a “one-stop-shop [for] financial services that address the whole of the investor balance sheet.”

Javelin's Trout said he sees operational advantages as well: "Apex also is adding liquidity to the marketplace and helping their institutional client base by putting cash in investors pockets,” said Trout. Investors “can invest in stocks and—guess what—exciting alternative asset classes like crypto, which, it’s worth noting, operates on a 24/7 basis already,” he said.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.