Guilherme Benchimol's XP, The Charles Schwab Of South America, Is Changing The Way Brazil Invests

FOR ALMOST THREE DECADES, Wilson Feldberg kept his money in low-risk investments at Brazil’s biggest bank.

- Felipe Marques, Cristiane Lucchesi, And Vinicius Andrade

Then, three years ago, he started moving almost all of it—the equivalent of about $1.5 million now—to an upstart brokerage, XP Investimentos SA.

Why? Feldberg, who owns a construction company in São Paulo with his brothers, wanted a chance at fatter returns and more personalized advice. “They explained things to me better, and I felt safer following their suggestions,” says Feldberg, a 47-year-old native of Recife. “Since I don’t have much time, I embrace their suggestions.” Lots of Brazilians are taking the same leap of faith. XP, Brazil’s biggest retail broker, has been adding 50,000 accounts a month, luring clients like Feldberg away from Brazil’s five big banks and changing the way the country’s middle class saves and invests. With an open-architecture strategy modeled on U.S. financial supermarket Charles Schwab Corp., XP offers stocks, bonds, and funds as well as products previously available only to the very rich, including hedge funds and derivatives. Brazil’s banks, which offered only their own products, have been forced to adapt.

Itaú Unibanco Holding SA, the country’s biggest bank by market value, certainly took notice—especially after clients like Feldberg started moving their money out of it. In 2017 it agreed to shell out 5.7 billion reais ($1.8 billion) for a 49.9 percent stake in XP.

The transaction made Guilherme Benchimol, XP’s chief executive officer and largest holder of voting shares, a billionaire— at least in Brazilian currency, with a net worth of 2.7 billion reais.

XP WASN’T an overnight success.