Apex Clearing Corporation – The innovation of fractional shares.
It used to be that buying stock shares required a phone call to a broker—and a fat commission paid for every trade. That’s changed in recent years as a flurry of financial services and fintech companies entered the scene offering automated, commission-free investing. But making these high-tech trading platforms work required partnering with innovative companies that embraced the goal of democratizing access to powerful wealth-building tools.
Enter Apex Clearing, an Apex Fintech Solutions company. Founded in 2012, Apex is a fintech platform providing technology solutions to more than 200 companies, from startups to established brands. Its proprietary, customized technology powers some of the biggest names in today’s investing world, including Stash, Webull, SoFi, and Betterment. “Think of us as a fintech for fintechs,” says Bill Capuzzi, Apex’s CEO.
SHARES OF SHARES
Apex provides the behind-the-scenes technology that aims to make each part of the investing process as frictionless as possible for individual investors, from opening accounts to buying shares and transferring money. “We stand behind our clients and make them look great,” Capuzzi says. “It’s a perfect marriage of their superpowers and ours.” The crucial role Apex plays in the democratization of investing has earned the company a spot on Fast Company’s list of the World’s Most Innovative Companies.The advent of fractional trading has been a key aspect of the investing revolution, and Apex was one of the pioneers. Fractional trading allows people to invest as much or as little money as they want in shares of a company’s stock. For example, if an investor wants to invest $300 in Tesla, and shares are selling at $700, fractional trading allows them to buy just a portion of that share.
Apex simplified the fractional trading process by creating a series of programming interfaces that allow for investors to place fractional orders in real time. Effectively, Apex buys a full share and holds onto any remainder—$400 in the above example—for the next person who wants to buy it. Algorithms developed by Apex innovators allow the company to manage the associated risk. “We want people to be able to invest in the companies they believe in,” Capuzzi says.
2020 saw an acceleration of pre-existing investing trends, spurring further innovation for Apex. “The pandemic poured gasoline on an already roaring fire,” Capuzzi says. “Everyone was home, stimulus checks came in, and there was great volatility in the markets. Put it all together, and we saw an amazing push into investing from a retail standpoint.”Along with fractional shares, cryptocurrencies reached a new level of popularity among investors. Here, too, Apex was at the forefront of the movement. In 2019, Apex Crypto was launched, a platform that allows fintech companies to seamlessly introduce digital currency into their customers’ portfolios. It’s this sort of innovation that has driven more than 14 million customers to open accounts with companies backed by Apex, more than 4 million of which have been opened in the first quarter of 2021 alone.
Nor does Capuzzi expect this expansion to end anytime soon. “Less than 50% of Americans own stocks or bonds,” he says. “That means there’s still a tremendous opportunity to help more people invest in their future.”