Winners of Wealthtech: Bill Capuzzi

This is the sixth article in our Winners of WealthTech series, where I interview people who have made their mark in wealth management technology with a track record of innovation and success.

My previous interviews have been wildly successful in terms of traffic, so there will be no stopping this series in 2018! Check out the previous posts:

Bill Capuzzi, CEO of Apex Clearing

I’m happy to announce that for this installment of Winners of Wealthtech, I was fortunate to be able to speak with industry veteran, Bill Capuzzi, CEO of Apex Clearing. Since Bill took over at Apex in 2015, the disruptive custodian has scaled up from processing 10,000 new accounts per month to 10,000 per day! More than a 20X increase.

Apex specializes in working with firms that are leading innovators in wealth management technology such as Betterment, RobinHood, ThinkOrSwim and TradeKing. This clientele gives Apex unprecedented insight into the next generation of investors since their average client age is only 31.9, almost half that of the rest of the industry.

Prior to Apex, Bill helped found ConvergeEx Group, which provides brokerage and trading services to about 2,500 hedge funds, asset managers, broker-dealers, trusts and exchanges. Bill’s career got started at Donaldson, Lufkin & Jenrette (DLJ) and he later moved to their custodial arm, Pershing, prior to it being sold to Bank of New York Mellon in 2003.

In this interview, we talk about Bill’s career and how to know when to take risks as well as how to build the right company culture.

Can you tell me a little bit about your career before Apex?

I think this answer requires a little rewind of the tape of my career. I started working as an environmental scientist back in the ’90s and pretty quickly realized that it wasn’t my calling. I went back to business school and then joined DLJ Pershing.

This is relevant because my first real foray into Wall Street was through an investment bank. I spent roughly 10 years at Pershing and it was a great experience. Pershing is a great firm with a great management team. They take good care of their people and people usually wind up staying at Pershing for a long time.  I really learned a lot about the industry and frankly learned a lot about how to be a good leader.

But one of the things that I soon learned was that the system was broken.

I spent a better part of two years at Pershing working on straight through processing (STP), which involves looking at different processes and figuring out how to automate them. What I came to find is that for all the right or wrong reasons, an overly complex infrastructure has been built over many years on top of embedded costs and conflicts of interest.

Now take that same concept and multiply it across the rest of the industry and you can see the scope of the problem is huge.

The place where this really resonates is in the lack significant progress towards STP, even today, in 2018.  The best we could do as an industry was go from T + 3 settlement to T + 2. How ridiculous is that?

It still requires two full days for a trade to “settle.” What this tells you, and I learned this by digging into the guts of the settlement systems at Pershing, is that the industry at its core, deep down, is broken. It is in need of a major overhaul.

After my first foray into the heart of the problem, I realized that I wanted to make a difference and change the status quo.

So, I left Pershing to help start a company called ConvergEx that was trying to solve the industry’s challenges related to institutional trading. We created solutions using algorithms and dark pools that automated and provided different ways for the institution side of the world to work in a much more seamless, STP environment.

I wound up spending around nine years at ConvergEx and had my hand in everything there at one time or another. I ran sales. I ran international. I ran prime brokerage. I ran options trading, clearing, stock, loans.

While we were able to change a lot that was wrong in the industry, I began to feel like I needed a new challenge. The institutional side of the business had also run into a bit of a wall where there was not as much innovation happening. So for me personally, I was feeling stuck.

And being one of the company’s founders, I felt an allegiance to the people and to the organization. But there was this nagging desire for me to step out of this and go someplace where I could again help drive innovation and disruption.

And so, the connection to Apex. I actually tried to buy Apex while I was at ConvergEx. I had always been familiar with the clearing industry from my Pershing days and knew it was a place where there was plenty of disruption to be had. And in the case of Apex, specifically, I knew that there was a platform there that had started to disrupt, but more the retail side. I obviously wasn’t successful in purchasing Apex while I was at ConvergEx, but in the process, I got to know the management team. Fast forward to 2015, I had stayed in touch with the PEAK6 folks, which is the parent company of Apex. I guess I impressed them enough that we started talking about me coming over to join Apex, which I did at the end of 2015.

What made you decide to join Apex Clearing?

The genesis of Apex goes back to 2012 when a company called Penson Worldwide declared bankruptcy. Penson was a public company that was once a major handler of securities trades for U.S. brokerages. After running into financial issues, they restructured the firm by moving their securities-clearing operations into a new venture operated by Peak6 Investments LP.

Even back then, Penson was working primarily with smaller firms that were trying to disrupt the market.  Companies like Betterment, Wealthfront, Motif, Scottrade, Trade King and OptionsHouse. These became the core client base of Apex.

We were helping anyone trying to disrupt the status quo in our industry, and doing it with automation and technology.

Going back to the place where I started my career had a great appeal to me.  I also thought that Apex could become the “crown jewel” where I could leverage this platform and, frankly, do the things I’m doing today. It has played out for me personally exactly as I expected, which is continuing to drive this firm to help disrupt the industry.

How do you identify people who would be a good fit at the Apex?

The first attribute that I look for in people would be intellectual curiosity. People who are looking to change, looking for ways to disrupt the status quo. People who aren’t afraid to question how things have always been done.

The second attribute that I look for is accountability. People who have high ethics and live the old saying, “Do what I say I’m going to do.” I think those really go hand in glove. While Apex employees are naturally curious and are focused on disrupting the status quo, they are accountable for their actions at the same time.

If you say you’re going to do it, I want to know when and I want people to actually do the things that they say they’re going to do. Focus on “essentialism” in terms of the firm’s norms and behaviors. So, from a culture perspective, our focus on natural curiosity and accountability are probably the two tenants for the firm.

What is the right way for companies to build their culture?

Culture is the outcome of establishing norms and acceptable behaviors within an organization. The process requires studying the organization from top to bottom to determine how best to implement it and then putting in the effort and following through.

I always find it funny when people think they can change their culture by putting up posters around the office with their top ten values. Or they try to create a really cool, fintech culture by installing beer taps and ping pong tables because they think that resonates with Millennials. Those are just superficial steps to create a work environment, but they’re not about creating a culture.

To be successful, companies must be laser-focused on rooting out any behaviors, traits, or norms that are not consistent with their target culture and making sure that they course correct in real-time. That’s creating a culture. It’s not about posters or having beer every Friday.

How do you know when it’s time to course correct?th 4 300x200 - Winners of Wealthtech: Bill Capuzzi

I think it takes work. It takes work to figure out how and when to course correct. Like the old saying goes, “you’ll know it when you see it.”

If you have a strong management team and you’ve had dialogue around the specific behaviors, norms, and traits that you want to promote, then there will be an abundance of opportunities for you to celebrate and cultivate them. That’s a great way to get people to understand the types of behaviors that they’re looking for from employees.

On the other side, there’s always going to be situations where people may not, for one reason or another, follow those norms, traits, and behaviors. The proper course correction varies from straight conversations with the employees to taking more drastic actions.

Culture is like the brand of a firm. It encompasses everything and it requires work to create the right type of culture that you want from within.

These are two ends of the spectrum: the people who work to develop and nurture their culture and the people who think it’s just going to evolve on its own. And frankly, it will evolve on its own, but not in the way you want it to.

Who was your biggest influence growing up?

My dad. And I think it’s the same answer to the question of who do I think of when I think of the word “successful.”  It’s my dad in both cases.

The reason is that he struck a great work/life balance. That’s really important to me and it’s important for me to impart on my employees. At the end of the day, we’re here to take care of our families and the folks in our personal lives. And at the same time, let’s do something really impactful with our careers. And my dad seemed to have managed those two goals perfectly.

My dad was super successful in his career and, God rest his soul, he passed away a few years ago, but he lived a great life. I have tried, to the extent I can, to emulate the things that he did in terms of creating work/life balance within Apex because I have four kids and a wife, and I don’t want myself or any of our employees to become absentee parents by being shackled to the office.

Apex is in a massive growth mode, which can very quickly suck people into day-to-day issues and they forget what’s truly important in life, which is taking care of your loved ones, taking care of your family and being there for your children.

There were five children in our family and success for my dad meant the ability to send all of his kids to private school from kindergarten through 12th grade. And then he made sure we could choose any college we wanted and graduate without any debt. And by hook or crook, he figured it out. And again, God rest his soul, also left my mom with enough financial means to live a comfortable life. So, that to me, means he won.

Do the Millennials you’re hiring now share any common characteristics?

We hire a lot of Millennials into Apex and it’s certainly not one-size-fits-all in terms of managing them. I don’t want to bucket them all together, but it’s certainly rewarding in some respects and challenging in others.

If I had to choose two characteristics that we see in a lot of Millennials, I would say natural curiosity and the desire to have an impact. I try to interview every person who comes into Apex and also try to exit interview everyone that leaves.

The sense of people coming in, especially the younger generation, and I love this, is that it’s not about a job. They really want to make a difference in the world. They want to do something that is impactful, that they can go home and tell their friends, their wives, their parents, that they’re actually making some small or large difference in the world. While that is an over-generalization, my sense is that they have much more of a sense of purpose than my generation that graduated college in the ’90s. We were all about finding a job so we could put money in the bank.

At what point in Apex’s growth do you think you will be unable to  keep interviewing almost every employee?

I hope I never! Look, when you’re in a massive growth mode like we are – we have hundreds of employees, not thousands – the time commitment is not overwhelming for me. It’s incredibly important to make sure that not only are the people who come into Apex a good fit for us, but that we are a good fit for them. This is just as important as their technical skills or whether or not they can code or if they understand how an ACAT works.

Part of the reason that I try to meet with each new candidate is because I want to be able to give them the opportunity to ask me the questions that matter most to them. Life is short and I don’t want people here who don’t want to be here.

Besides, our culture is different. It’s not typical Wall Street. It is much more of a “fintech” firm where the premium is on intellectual curiosity and accountability, not around how many years of experience you have processing trades.

My advice to start-up CEOs is to interview everyone who’s coming into your firm because you want to have that control early on. You want to make sure that the people coming in are aligned with your culture and with the norms and behaviors that you want for your firm.

What has become more important to you in your personal life over the past few years?514M9KlQKQL. SX332 BO1204203200 201x300 - Winners of Wealthtech: Bill Capuzzi

I’ve been spending a lot more time in what I call essentialism. There’s a great book out called  Essentialism. I try to live by that. I’ve been working over the last year to focus on the most important things in both my personal and professional life.

It requires learning how to say no to the non-essentials, which sounds so obvious. But when you think about your life, how many things in your life do you do because you just feel like you should? How many things in your life do you do that are nonessential to what you’re trying to accomplish?

For me, it’s two things. One is leading a great firm and helping people to feel fulfilled in their jobs. Two is, between my wife and I, raising our four children to be great citizens in our country and great people.

Beyond those essentials, I also constantly look at my calendar and look backwards to find areas where I need to course correct my own life around where I’m spending my time.

The third thing is to have a personal goal. Over the past two years, one of my goals was to complete an IRONMAN triathlon. And even as a CEO with four kids, I somehow figured out how to carve enough time to train over the last year and compete last summer. That was one of my bucket list items and I checked it off the list.

CI: What was your finishing time?

BC: 13:30.

CI: That’s incredible! (The only things that I have ever done for 13 hours straight are sleeping and driving.)

Is Essentialism the book you most often give as a gift?

It’s funny you say that. I gave Essentialism to every person on my management team, and I’m now giving it to everyone in the next layer down within Apex.

There are a lot of excellent business books around such as Who Moved My Cheese or Good To Great. But what really struck me in Essentialism is it makes you a better person both professionally and personally. Some of the things that I care about, one of which is accountability, ties into the concept of essentialism. So, it is definitely on my bestseller list, the “Bill Capuzzi Bestseller List.”

CI: Let’s change gears a second. You talked about your goal of an IRONMAN…

Do you use goal setting for business?north star 3 j erik leiff 300x300 - Winners of Wealthtech: Bill Capuzzi

Yes. From my seat at Apex, I make sure my team is focused on the long term. I’m not going to put a time frame on it but it’s important to attach a metric so it can be measured. What is the North Star metric against that long-term goal?

For us, the North Star is the number of funded accounts. Related metrics include the number of accounts we can service and the total number of clients. To rally our firm around a common goal truly galvanizes people and helps to automate and, in many ways, democratize the investment process.

Once we set our goals, we can start to break them down into manageable chunks and then stitch them together. What do the next 18 months look like? What do the next 12 months look like? And then break the 12 months into quarterly targets.

I do the same for myself, personally. It all comes back to essentialism. Professionally, I take that same approach and look at what we are trying to accomplish. What do I need to do, as the leader of this firm, to promote the broader goals of the organization?

Do you believe that more CEOs should focus on helping their employees to feel fulfilled in their jobs?

I’ll give you a great story around that, which I also shared with the entire firm.

One of our clients is a B2C robo-advisor and they created a relationship with Uber so that their drivers will be able to invest a portion of their earnings.

I take Uber all the time, since I’m on the road quite often. One day, I’m in the front seat of an Uber (because I always try and sit with the driver and not in the back seat, it’s just my personality) and I’m talking to him about his life. I ask him, “Did you ever get an email from Uber about investing?”

“Yeah, I think I remember that,” he replied. “Well, what did you do?” I inquired. “I’ve never invested any money in my life,” he exclaimed. “So, what do you do with your money?” I queried. “I just put it in a bank,” he shrugged.

This guy was probably 50 years old or so and had never invested a dollar in his life! As we continued driving he asked what I do and I replied, “My company holds the money behind the scenes when you invest.” “Tell me a little bit more,” he urged. And so I explained in more detail what we do.

To make a long story short, we pull over on the side of the highway between the Dallas airport and our office. I have him take out his phone and we opened an online account right there and then. For the first time in this person’s life, he had invested!

Talk about finding your purpose! That really drives home what Apex is trying to do. Enabling folks to knock down the barriers to entry and reduce the anxiety around investing by delivering a pleasant, seamless, and fast experience.

This is an example that resonates with our employees. Why do we do what we do? It goes back to the North Star goal, which is 20 million funded accounts. I want 20 million people in our country, by and large, to be able to invest in their own futures. To be able to put money away so they can send their kids to college. That is a lofty goal and at the end of my career I want to look back and say I made a difference. The other 200-plus people at Apex can do exactly the same. That, to me, is much grander than how much earnings did we make as a firm or topline revenue. It’s our impact on the broader society.

What’s some bad advice you hear given out most often?bad advice - Winners of Wealthtech: Bill Capuzzi

I’ll give you the good side of the bad. One piece of bad advice I hear is to always double down on your decisions. I’ve seen it too many times in my career, and frankly, I’ve gotten caught in this trap as well.

First you make a decision in which you have personal sweat equity. Then, it’s not going as you expect, so what do you do? You double down. And you throw more resources at what you thought was a good idea but frankly is quickly turning bad.

One of the mantras within Apex as a whole is to not be afraid to make mistakes – to fail fast. So, one of the pieces of advice is don’t be afraid. You have to be able to challenge and do things differently but you also have to recognize when it’s not working and switch it quickly.

And I’ll give you a good example at Apex. We thought for all the right reasons that servicing the prime brokerage business was going to be a really good opportunity. And so, we spent almost a year building out a unit to service only prime brokerage. It took us about 12 months to get it built but soon after we launched we realized that it was not working the way we planned.

So, we decided to shut it down and it took around three months to unwind completely. That was a total investment of 15 months of work effort plus the budget that was wasted.  But we cut our losses quickly and moved on. Too many leaders continue to pour resources into failing strategies because they can’t bear to admit they were wrong and write off their investment.

What is something that you believe that other people might think is crazy?

I actually have two things. The first is that there’s this under/over-hyped discussion around blockchain and what it’s going to mean to our industry. I think there are a lot of skeptics who believe blockchain is not going to have much impact. My opinion is that blockchain is going to disrupt our industry and it’s going to happen sooner rather than later.

Blockchain has the potential to change everything we do. We’ve talked a lot about going from T+3 to T+2 settlement, as though it was an incredible accomplishment.  Blockchain could bring us real-time settlement without requiring centralized authorities like DTCC or NSCC to be involved.

The second thing I would say, that is really crazy, is that there’s going to be an entrant into the wealth management space that doesn’t think the way that Wall Street thinks. Like an Amazon or a Google that thinks about it through the lens of a consumer and is going to create a solution set that is completely contrary to the way that our industry thinks.

If you could send a message to your 25 year old self, what would it be?

Take more risks. You’ve heard the old saying there’s no reward without risk. And it’s very true. As I look back at my career and the many roads that I took, they were mainly the safe routes, not the calculated risk ones.

I would remind my 25-year-old self that life is a journey. There’s an old saying that someone with a well-lived life would reach the end and their body would be completely worn out and their gas tank on empty. That’s going to be me. I never took calculated risks in my life, professionally or personally, because I stayed with the safe route and that’s not as much fun!

Would you send same message to your 35 year old self?

Yes, I would send the same message to my 35-year-old self. When I think back 10 years ago, I probably should have left ConvergEx sooner than I did. And the reason I didn’t was because it was comfortable.

But if I had left ConvergEx sooner, I probably wouldn’t be at Apex today, so everything happens for a reason. When you start feeling that comfortableness, it’s time for a change.

One of the positives of getting old, probably the only positive, is the wisdom that comes with experience. And one thing I’ve learned about myself is when I start to feel too comfortable, it’s time to disrupt. It’s time to change and become uncomfortable.

What would your close friends say that you are exceptionally good at?

Compartmentalizing my life. When it’s time to be serious, I’m serious. When it’s time to have fun, I can have a lot of fun. So I do a really good job of switching gears. When it’s time to deal with my kids, I’m, to the extent possible, completely present.

Do you have a favorite phone app that you’ve recently discovered that helps you be more efficient?

To be honest with you, I think my answer to you would be to put down your phone and spend more time outside enjoying life. I look at my kids on their phones and I worry a lot about the next generation coming up and spending too much time looking at apps instead of socializing with people, not interacting with people on a personal level, not enjoying life, and spending too much time staring at their phone. So, I don’t have a favorite app. I try not to look at my phone unless I have to.

CI: Put the Phone Down is your favorite app.

BC: That’s it!



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at