The new company, Reinvent, is the first in Brazil to blend human expertise with artificial intelligence, leveraging AI for operational and supporting functions
10/02/2024
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Laio Santos, former CEO of brokerage firm Rico and ex-partner at XP Investimentos, is launching a wealth management firm targeting mid-ticket investors—those he believes are currently underserved by high-income segments of banks and digital platforms but do not yet have the volume for private banking. With this goal in mind, Mr. Santos, along with two other partners—Luis Souza and Heucles Bianco, both also former XP executives—turned to generative artificial intelligence as a way to scale the business without compromising service quality.
Named Reinvent, the asset manager is the first in Brazil to combine human expertise with artificial intelligence, which is used for operational and complementary functions such as portfolio monitoring, back-office operations, and client support, Mr. Santos said.
“AI is used to ensure that the time an advisor spends with a client is as well-utilized as possible. Human interaction is still necessary. If we were just AI, a chatbot, or an avatar, the client would probably invest R$1,000 to test it out. Most people today don’t want to deal with a ‘robo-advisor’ offering a portfolio that doesn’t match their needs just because they fit a certain profile. Clients want quality service,” he said.
The business model follows that of wealth management firms, charging a flat management fee of 0.7% on client assets. The minimum investment is R$100,000. The firm does not work with rebates or commissions for product distribution. “We don’t pretend we aren’t charging fees. Clients know exactly what they are paying,” Mr. Santos explained.
Reinvent is initially connected with XP, and the team is currently integrating BTG Pactual as well. Looking ahead, they aim to work with products from Nubank and Itaú. “We’re open. We have no exclusivity or ties to any one institution. This is important because it allows us to choose the best institution for the client’s needs, rather than the one we have a better relationship with,” Mr. Santos said.
The generative AI technology monitors everything happening in the markets 24/7, a pace that human advisors struggle to keep up with. With this information on hand, the AI can compare it to the client’s portfolio and goals. “This enables us to be proactive, knowing what’s happening before the client even notices an issue or opportunity.”
After leaving XP, Mr. Santos took a year off, fulfilling his non-compete agreement and exploring his next move in the financial market. He shared that at Rico, where he was CEO for three years, he had a team of 20 advisors managing a portfolio of 1 million clients. “The challenge was always figuring out how 20 people could make a difference in the lives of 1 million investors,” he said.
In the investment market, Mr. Santos explained, it’s difficult for an advisor to provide quality service to more than 80 clients. “It’s widely accepted that it’s economically unfeasible to personally manage clients with assets between R$100,000 and R$500,000. That’s just how the market works. But these clients are already receiving excellent service in other areas—they drink fine wine, go to great restaurants … yet in the investment market, they are still underserved.”
Mr. Santos believes that technology is now making it possible to expand service capacity. The estimate is that advisors can save at least three hours of operational work per day using AI. For example, while onboarding with a traditional advisor takes 120 minutes, with AI it can capture the essential information in just 20 minutes.
The firm caught the attention of venture capital investors like Canary, which led a R$5 million seed round along with angel investors from the financial market.
By Toni Sciarretta — São Paulo
Source: Valor Iternational