- Itaú, Brazil’s biggest private lender, is also XP’s major shareholder, owning a 49.9% stake of the firm;
- XP leaders said Itaú should divest from their company and offered prizes for clients who switch companies.
In Brazilian investment circles, a very public row involving two major financial institutions has attracted a lot of attention and news coverage this week. Brokerage firm XP Inc and Itaú Unibanco, Brazil’s biggest private bank, were usually seen as business partners, as the latter is XP’s main shareholder, but over the last few days both firms have been trading accusations in advertising campaigns and webcasts.
Itaú launched on Tuesday a somewhat provocative TV ad pointing to possible conflicts of interest of independent investment advisers. Differently from traditional banks, the ad suggested, independent advisers receive cash incentives to sell specific funds, usually through a piece of the fee charged by the product manager. XP’s team mainly consists of these advisers.
Guilherme Benchimol, XP’s founder and CEO, considered the ad an “attack” and said that his company “has been struggling with a concentrated financial system for 20 years”, adding that “the industry never cared about the customer”. Benchimol also used a famous Itaú slogan, “Made for you”, to affirm that “if there is something that the bank is not, and never has been, is made for you”.
Itau owns 49.9% of XP shares, which were acquired for BRL 6.3 billion in 2016, but both companies compete for investors. On Thursday, Gabriel Leal, a partner at XP who is responsible for customer relations, said during a webcast on Thursday that the bank should sell its stake. “If Itaú thinks their stake in XP makes no sense, they should rethink it,” he added. “Itaú wants an old-fashioned country, with high interest rates and no competition,” Leal said.
XP also offered, in a post in the broker’s Instagram account, prizes to Itaú clients that transfer money to XP. Those who do so would win winter vests – a piece of clothing that has been mocked as the Brazilian investment adviser uniform, including on a recent social media post made by Itaú – with the XP logo.
Itaú’s wealth management division also hosted a webcast to discuss conflicts of interest. Carlos Constantini, head of the division, said the ads “did not target any specific competitor.” He said clients have to understand the different incentives depending on the investment model.
Asked about its stake as XP, Constantini said the shareholder relationship did not interfere in how Itaú’s investment platform is run.