Connor Coughlin, the chief commercial officer at Apex Fintech Solutions, said the company calls itself “the fintech for fintechs.”
“We are the pipes and plumbing behind the fintech brokerage industry,” he said.
He spoke with John Lothian News recently about the trading differences between generations, investor behavior during the recession, and Apex’s expansion into fixed income and alternative brokerage.
Apex has been in business for about 10 years. It has more than 200 clients and supports about 25 million brokerage accounts, Coughlin said. It operates mainly in the U.S. but is also in 144 different countries, and custodies more than $100 billion in assets.
“A lot of people have accounts with us but have never heard of us because we’re in the background doing all of that pipes and plumbing work,” he added.
Apex provides its customers with account opening, cash funding, tax reporting, cost basis and a slew of other tools around the crypto and trading space, Coughlin said.
“That’s why we have this data across those 25 million plus accounts…We are able to see what people are doing, everyone from a small robo with less than $100 in it to highly sophisticated traders using margin and options and trading on a very active basis. We can compare by generation, by type of business model…and we can see exactly how they are reacting to the market,” he said.
The majority of Apex’s customers are millennials, but the company is starting to see more Gen X customers as that generation comes of age, Coughlin said. “As we start to understand their habits – digital and mobile – I think we’ll see a very different behavior set.”
A lot of people expected millennials and Gen Z to have very different trading habits from boomers and Gen X, but “that isn’t necessarily the case,” he said. In fact, they are using Apex’s trading tools more responsibly than the media gives them credit for, he added.
Coughlin also said that, contrary to the old adage that inexperienced investors generally buy high and sell low, many of the self-directed, mobile-first investors have been holding on through the recession. “At a time when the market was really slumping, we saw a lot of self discipline,” he said.
Apex saw some interesting trading trends, including that high growth names have gone out of fashion. Apple recently unseated Tesla “because investors were seeing Apple as a blue-chip name even though it still had a pretty tough quarter,” Coughlin said.
Also, the energy and industrial sectors were up in 2022, he said. GE and Exxon were two of the biggest movers in that sector, and 76% of the companies in the energy and industrial sectors moved up in the index.
Apex is expanding into other types of brokerage, starting with fixed income. Interest rates are playing a large role there, Coughlin said. “We haven’t spent a lot of time on that arena in the last 10 years because no one’s really cared – there was not a lot of demand. Now we’re looking for strong partners who can help us make the fixed income market a little bit more like the equity market – more seamless.”
Another popular area with Apex’s retail customer base is in alternatives, he said. “Apex has created efficiency through the use of technology to drive commissions down.” The alternative space is still slow and clunky and paper-based, he added. “We’re working with partners asking how can we make it so that people can find exposure in other areas and most importantly, how can we do that in a responsible way? As you get away from registered or listed securities, that’s going to become a really important piece – are you putting the best things in front of your customer from a suitability standpoint, and on a secondary basis, how do you make it more efficient?”