Good morning. We are starting Investor Day by XP 2021. I am André Martins, responsible for Investor Relations. On everybody's behalf, I would like to thank you for the interest in participating in our event. It is the first time since our IPO that we are doing this with this format with our main leaders. This is a very timely moment for us to discuss our purpose, culture, strategic planning, among other subjects. You will be able to ask questions towards the end. If you feel that a topic was not discussed, please feel free to send in the questions. It's important to say that we are going to have two sessions. The first one starting at 10 A.M. Brazilian time, 8 A.M. EST, the business sector. The Q&A right after that will be related to that.
The second block, we will then have more financial topics, and there will be a dedicated Q&A right after the second session. It's important to say that the event is being transmitted into English and Portuguese. According to the link that you use, you will listen to one or the other language. Going back to Portuguese. I just thought it was important to give this note to people who by mistake maybe came into the wrong way. You can ask the questions in Slido on each screen. Once again, thank you very much. I'm now going to introduce our leaders who are present from the left to right. Guilherme Benchimol, Founder and Chairman of the Board. Thiago Maffra, our CEO since May 2021. José Berenguer. Guilherme Sant'Anna, our commercial director in charge of the channels, growth, et cetera. Finally, Bruno Constantino, our CFO.
They will be here with us for questions and answers in the end. It's going to be very productive discussion. Starting with Guilherme. Good morning, Guilherme. You founded the company 20 years ago, a huge opportunity of improving people's lives. In these 20 years, it's difficult to talk about 20 years in a very short period of time. What do you think are the main merits and learnings in this entrepreneurial journey? Hi, André. Hi, everyone. It is a pleasure to be here. I hope you like the event. I'm going to start with an intro, and then me and my partners are going to go deeper into the actual conversations. I would say, André, that my biggest merit in 20 years of company, I would say they are two. The first one was learning how to have an actual partnership.
When I started the company, it was only mine. Then I started understanding that building a company of owners and aligning people throughout the time makes a huge difference. When you're an owner, you have no alternative in life that is different from doing better and better. When you're an executive, of course, some are brilliant, but you can always change jobs. This learning was important. The second thing was learning to dream big. Life is very brief, and you need to find something that makes your life more worthwhile. Dreaming is easy. Making a plan, slightly more difficult. Really difficult is to execute it on a daily basis. When you learn how to share your dreams, align people, and you learn how to dream big, and they get there, that engages the team and makes your life really worthwhile.
I would say that these were the two things that were very important. Moving forward on the why we exist, the company always wanted to transform the financial market and improve people's lives. In the last years, we advanced even more. We went into other verticals, insurance, tech, and et cetera, and we thought that in our ways to evolve as well. You will listen to that more and more, improving people's lives. I would also say that I learned that at home. When you do good comes back to you twofold. It's important for people who work with us to understand that XP exists because it really wants to improve people's lives, help them invest better, and have access to information that will help them out, among other things that we do and we aim for.
As an entrepreneur, it's common for you to start having some success in your life, and then you start wanting to diversify. Make some money, then you start wanting to invest in other things. We don't believe in that so much. We are a focused entrepreneur. We don't have another business. I don't have any other company. I only invest in XP. My only business is this. Here are my partners and the other partners that or otherwise believe in the same thing. We believe in a concentrated entrepreneur. We don't believe in diversified entrepreneur. I would say that that is the basic foundation, right? Being focused, being passionate. These are the ingredients that help you really transform an entire industry. We believe that it was more important, not the business area or sales area.
A lot of us have a tendency to think that the area that the business is the most important one. We think that the most important one is the people department. Having science and data. When you find the right people and put them into the right positions, learn to align people throughout time, align them with you, demand for the creative goals. Also learn how to fire sometimes or promote somebody. At the end of the day, that is what attracts the best in everyone and makes the impossible possible. At XP, we are focused on these people, and there are no superheroes here. We don't believe that. We believe in super teams. Our focus is people, culture, process, and this is what creates super teams, making us go further and further. Meritocracy in our company. How do we find our talents?
How do we put science to meet people who deliver performance, who make magic, right? We use a lot of that. We like people who know how to do the magic in the right way. The right way has to do with our culture. We have four things in our culture. Client Centric, Dream Big, Open-Minded, and Entrepreneurial Spirit. We want to do everything to always enchant clients, be them higher offices or end clients, et cetera. These are people who dream big. People who do not believe that there is an impossible. People that are always raising the bar, building bridges with an open mind. People who don't mind making mistakes but correct them quickly. People who are humble, always learning, evolving. Finally, with an entrepreneurial spirit, people who are getting empowered by the mission that brings solutions. It's our culture.
Being successful in the company, finding more space, having more partners, and bigger bonus is the result of performance and also having this behavior. It's worthless to have one or the other. You have to have both of those out. Finally, I'd say that in our vision, entrepreneurial success is really about three things. These are the three things that build value for the shareholder in the long run. Generating more and more revenue, controlling expenses, and delivering more and more quality to the client, whoever they are. In XP, we believe in these three things. We believe that breaking records in these three things in the long run is what is going to generate more and more value to the shareholders. The challenge is to do that in the right order.
We really believe in finding the low-hanging fruit, taking step one, then two, and leaving the high hanging fruits for later. Finding the sequence focused on these three things is something we do well, and we intend to keep on doing well. More and more. Now I'm going to invite Maffra. Maffra took over as the CEO. It's been six months. It was the reason of pride to pass on my position to him. I had been the CEO for more than 20 years, and surely Maffra is going to lead the company with the vision of the future much better than myself. I think I was a good CEO. You know that saying that if a team is winning, you don't change around the players. We don't really believe that. We do change around our team. Maffra has already changed quite a lot.
The company is better than before. It's very good to be more focused on the long term. He's more focused on the short term. We complement each other together with our team. Maffra, you have the floor. Thank you, Guilherme. Thank you everyone who's watched us from home. It is a pleasure to be participating in our first Investor Day after two years that we made an anniversary of being listed. It is a pleasure to be speaking to you today. I would like to start talking about what my priorities have been in these first six months. These are priorities that are very much aligned to everything that Guilherme shared. These are priorities that all our executives, our partners who are here by my side, everybody is focused on this.
We believe that what really makes the difference, and I think Guilherme has already mentioned a little bit about the importance of our culture. Teamwork. We say that in XP, we don't have one CEO, we have 6,500 CEOs. Everybody here is the CEO. I'm not the one leading the company by myself. It wasn't Guilherme who did it. We really have this team spirit because we believe that teams that are competent and united with the right incentives are the ones that make a difference in the long run. I have been very much focused on three priorities. People, strategies, and management. Management, please understand execution as well. When I talk about people, I'm basically talking in a broad way, several pillars. I'm talking about meritocracy, I'm talking about culture, I'm talking about long run incentives.
We truly believe that people are the ones who make a difference in the company. For several years I've been asked, "What is your biggest challenge as a CTO or an LTO?" I say the challenge is always the same: people. How do we guarantee that we have the best people sitting on the right seats with the right incentives aligned to our culture? We really believe that culture is the glue that brings everybody together. That keeps everybody together. Value is the how. How we're going to carry this out and get there. Strategy. I'm not going to go. We're evolving quite a lot our business model. For many years, we had investment as our only pillar in the company. Two years ago, we have been evolving a lot and focusing on different vectors. Then the third one, management, execution.
The company has grown amazingly in the last few years. We've doubled our size the last few years. The complexity of managing the company is getting bigger and bigger due to the new line of business. We have been evolving our management model. We have been building what we call XP management system, where we focus on a management model to be able to guarantee the execution of all of these projects that we will share with you. This has always been one of our biggest qualities. We've always been capable of executing very much above average. Our unique capability of execution. That is because we have the best people that are well-aligned. They have an owner mindset. That is what makes the difference. The next piece, I think Guilherme mentioned another thing that is very important to reinforce.
We believe that we need passionate people. People who understand this not as work. XP for us is not work. XP is a life project. In the long run, all of us in the next 10, 20, 30 years, we will still be here. We're not an executive that in 5 years from now are going to change jobs or go to another project. This is a single project. We don't have plan B. This is our life, and we do this out of love. We do this because we truly believe in our purpose. We talk a lot about that in XP. When we hire someone, we hire future partners or partners. We don't hire employees. We believe that everybody here has the potential to become a partner. Since the beginning, they think as an owner. That is what makes the difference in XP.
Now, going into the strategy of new business. Our entry video shows that, in our opening video. We made 20 years this year. For 18 years we were very much focused in investments. We believe that this was a gateway or an entry point. It's a good differential when we think of a pyramid. We like to think that investments is the tip of the pyramid. You really need to conquer the credibility of your clients. That's not easy. That's not something that you do overnight. After health, family, I would say that money is the third most important thing in people's lives because it's not only money. Money is a dream. A dream that can be to buy a house. It could be having financial stability, sending your kids to college. Behind an investment, there is a dream.
That is how we see it. That is how we take care of people's monies, of people's investments. We are taking care of their dreams. When you come in through investment, you have high value clients that trust you, that have influence, and then you bring it down by increasing the offer of products that bring it down and increasing the variety and target of clients. We believe that it is really a differentiated position. In the last two years, we have been expanding our product offer. I like to think of four verticals: banking, credit, insurance, companies. This is how we see new verticals that we're going into. When we look at the market, the total addressable market in Brazil that we consider addressable is BRL 80 billion per year. We act in BRL 100 billion-BRL 120 billion of revenue pool.
If you look at the slide, BRL 67 billion of investments. We have other business lines such as entertainment and so on, asset management. Today we act from BRL 100 billion-BRL 120 billion. If you look at the four new verticals that we're going into, we expand our addressable market BRL 500 billion revenue in a term of 36 months. This is our plan for these verticals. We're going to really advance in each one of those the next few years. When we talk about banking, we're talking about transactional, credit card, checking accounts. When we look at what we did in terms of cards in the first eight or 10 months that we launched our card, it is really something. Very surprising.
In the next few months, we're going to be in the top 10 players of cards in Brazil, and our card is not yet available to all clients. We're going to start expanding our penetration in our clientele in the next months. This month, we opened for XP clients above BRL 5,000. There's a view ahead. When we talk of credit, it's the same. We started a year ago. Today, we have been at low- risk credit. We have 0 NPL currently in our credit portfolio. The idea is to keep on advancing. As Guilherme said, low-hanging fruit of credit with lower risk that have, in fact, more synergies with our current clients. We don't want to go to the open sea and offer clean credit, that kind of thing. We're gonna keep on advancing with low- risk credit.
We don't have the youth credit. We don't want to be a company that keeps on piling up credits in our balance sheet. Super important points. That is going to go deeper into this thing. Insurance. Insurance was something we didn't use to have in XP two years ago. Our insurance company has less than two years. We are leaving portability of pension, life insurance that didn't exist, which is a revenue line that we're going to share about today with you. It didn't use to exist, and it's ramping up really quickly with behaviors that are a lot higher than we have in our more mature lines of business. When we think of companies, we see a transformation happening. A huge transformation when it comes to individuals.
This transformation did not happen in the legal entities or in companies and so forth. We think the offer of services, products and experience in the legal entities for companies ten years late is compared with what happened in individuals. We see today, the rates that you have today for companies that can serve with bad products. As simple as a Pix, which is for free for individuals or legal entities, there are high costs to it. Therefore, we believe that there's a huge transformation that has to happen in this market, and we are diving headfirst into the corporate market because we really want to do something different. We believe that in these four new verticals, we are able to do a transformation differently with better services and products and transform these four markets just as we did in assets.
That's our challenge for the next year. I think it's also very important to mention Guilherme, when he talked about the tripod, revenue, cost and quality. This is something that is very strong internally. We really believe that we're an entrepreneur, and even considering XP's background, we didn't start with rounds. We didn't start having investors. We had to build the business, making money to reinvest it, to grow. That is the style that we like to manage the company. We like to go into new businesses that we're able to monetize. Obviously, we need to invest first to grow, but we are very well-grounded of always reaching for the low-hanging fruit, monetizing, and then building the new business. That is the mindset that we have here in XP.
To wrap up, we are only able to advance in these new fronts because we started a transformation in the company three or four years ago. We are not a company that was born digital, but we have been transforming in that area. Today I can affirm we're a technology company. We're a digital company. We have been doing this transformation for the last three or four years, investing heavily in technology and reorganizing the company. This year we're giving yet another step forward. Transformation starts with squads involving product design technology. This year we started advancing, and we're going to advance even faster now in a nimble and scalable transformation in which we're going to have several business units with more autonomy and more and more closer to the client, in which we'll have a more nimble, more decentralized company.
The goal for that is that we believe that an important competitive advantage in the long run for the company is its capacity of adaptation, its capacity of reinventing itself, adapting to the client's needs, pivoting the business model if necessary throughout the years. We want to have this agile company. Very soon we're going to go into more details of what I said. I think my message just to close here, my opening remarks, is that this is just the beginning. The numbers clearly show that. We have a huge opportunity in Brazil. The banking concentration in Brazil is the highest among several countries in the world. We still have 90% of the revenues in the biggest Brazilian bank, and investments are still in the biggest Brazilian bank.
Here we really do have a blue, beautiful sea of expansion, and this is just the beginning of our journey. Very well. I'm going to give the floor to Zé. He's going to talk a little bit deeper about banking. I'm sorry to interrupt. Maffra made a very interesting connection with people and transformation. We have two leaders connecting remotely. I didn't mention their names in the beginning because. But we do have Gabriel Leal, a reference partner here in XP. Today, he is a People and Management Director. Renato Cunha, he's also innovation and strategy. We now see them online. Good morning, Leal. Good morning, Cunha.
Hi, guys.
We hear you well. Perfect. Now giving the floor to Leal. Maffra was making a connection with people, management. Guilherme said that the heart of the company are the people. Gabriel, you have a challenge. You have a lot of years in XP. A company that grows, as we said, and goes into different markets and it's in an industry also that evolves on a daily basis. How do we guarantee that the company remains focused and efficient around and towards the same goal?
Thank you, André. Good morning to everyone. We have our XP beware model. Maffra, as well as Guilherme, mentioned several challenges that the company is facing more and more as we scale up. After several years leading the commercial areas of the company and now leading people and management, I always like to connect these two things, people and management. If you have a group of people, but you don't have a method, a system, management methodology, then that group of people, it's just a group of people that have nowhere to go, no focus and result. If you have a management area, but you don't have people, it's the same as having theory, but that doesn't change anything in practice.
I believe that building a company that has these pillars of people and management and very connected pillars creates a competitive advantage. Basically, the combination of these two topics is here to solve two main challenges. More and more, if companies want to reach higher levels, they will have to face them. Number one, scaling up the company. You are aware of our growth track record. It is surprising. There's no doubt that we want to continue scaling up and at this speed and at this magnitude, protecting our core business and at the same time going into new verticals. We're going to talk a lot about this. Mafra has said something about this as well.
Scaling up the company within the concept of protection and evolution of our core and going into new verticals and doing that with a combination, a unique combination in the company, top line growth with bottom line growth, is a combination that is simultaneously delivered. We have the delivery of the results, and this is the first aspect that we're here. Scalable growth, profitability, protecting our business and at the same time going into new verticals. All of this is necessarily done by teams of people. We serve this company as people, as its main asset. Doing this, scaling up the company with growth, profitability, connecting people. This is our main challenge and the challenge of all of the companies that want to have this growth phase as we do.
As Maffra mentioned, our addressable market, our market share is still low when compared to all of our potential. How are we going to do this using a robust management system more disseminated in the company, a management system that connects the three dots, strategy, execution, and people. Maffra said that this is within his priorities and within the priorities of the executive committee. The strategy and the sequence of the strategy over time is getting clearer. How do we do this? We have a clear vision on the goals, and we want to have the low-hanging fruit, as we like to say, first, and then after that, the other ones. Doing this with a strong vision and intelligence and performance. That's based on efficiency and the constant need to have both aligned to your vision where you have the least possible with the best quality possible.
Because over time, that will be a huge additive differential so that you can fund new businesses, so that you can fund companies, entrepreneurship using your protocols. Above all, for you to be able to find more competitive prices for your end customer. This view of intelligence and performance is essential, and it is always connected in prioritization. Finally, the third pillar, which includes execution. As Guilherme Benchimol commented, it connects the long-term vision. This is closely related to the right incentives, payments we want to be able to make and the rewards we want all of our internal teams to have. Those who are developing new products with us. Without the right incentives, you cannot develop something solid over time. We have an amazing track record. Our partnership is extremely consolidated. It has evolved and transformed over the past 20 years since Guilherme Benchimol started the company.
I remember that Guilherme Benchimol said the company started with 100%, and today the company is listed with different external partners, internal partners. This is something that we've developed over time. Today, the company is a group of strong people with aligned interests, which are all well-defined with a long-term vision. The mandala you can see on the screen connects everything Guilherme Benchimol is offering management in terms of priorities, execution, and strategies. Then in the core we have people. Those who follow up our history know that we want to have the best people in the right place going forward, and that the challenges attract talents, retention of these talents, and challenging these talents with the right purposes. This is part of our Management System, which is only a method for us to reach our target.
This is how we're consistently going to achieve our results, progressing markets and above all, disseminating our culture. This is a little bit of what we have to think about for the management. Guilherme has said in the beginning, and I spent a long time in my life and in the business areas. We have our clients, we want to serve them well. Of course that is wonderful business leverage. Behind it all, perhaps the main one is a strong leverage. The company is dedicated to making this long-term dream come true. Thank you very much. This is a very important topic and the way the company is going today. We ask ourselves about that all the time. Our contacts have this capacity, and we want to know how you direct people and advise them. This is very important.
Now linking this with Renato, our Strategy and Innovation Director at XP. Linking what Leal said to data and technology. We have a transformation process which is ongoing. What are the initiatives in the company that will guarantee processes agility and scale? Well, just to make this link. Transformation is a topic which is used in different ways nowadays. We have an opportunity to demystify it and to show you how pragmatic this transformation process is. It's an ongoing process. It started in the past with Rafa and is ongoing. What is the context? Why are we undergoing transformation? We understand that our clients are more and more demanding. Their preferences. They indicate what they need. Expectations have grown.
We are in an industry which is very dynamic, and so when we talk about all of the verticals we work with, we know that we have business models that are born and die all the time. At XP, we have a position and we are undergoing continued transformation. Why do we do this? We want to guarantee adaptability. We want our business to be able to move on. At the same time, we do not want to lose our DNA, which is to generate value for our clients and doing this in the long term with them. Once again, it is a continued process which started three or four years ago. We take this to another level. What are the most important aspects that we have really invested in so that we can truly do this and then make the company more resilient, adaptable?
Well, number one, we believe in the vision of having smaller multidisciplinary teams. They must be empowered and close to the client and must be able to deliver their services. This is perhaps the most important concept that we want to implement. Maffra and the CTO James, part of this transformation in the world of technology and technology specialties. Now in the last five years, we've taken it to another level. We are disseminating it throughout the whole company so that we can implement this concept. My dream for the upcoming months is that whenever one employee asks us where exactly what area we work in, we will not say, "No, I work with data marketing or software engineering." That person will say, "My mission is improving this product for my client or improving the experience for my client," regardless of the area. That's very powerful.
We dream of having these empowered teams with a mission to do the best always. We are accelerating our pace. The second factor, which is also very important, is that since 2018 we have multiplied our investments in five- or six-times data security. We see this as the backbone. Number one, for us to be able to have these investments so that we can deliver products and services, improving our services and also complying with clients' expectations. We want to have efficiency gains. We will do this better as we invest in technologies, as the journeys are automated, as we include more intelligence in this journey, be it for our internal or external components. This is another important pillar whenever we talk about transformation. Finally, which is also very important to Maffra and WFL, clearly management. People are our main asset in the company.
People and our culture, which was developed in the last 10 years. The transformation we're going through is for six Amazon CEOs who are conducting this. We have been doing this for a while, and right now it's coming. For us to guarantee that this will happen the best way possible, we are making massive investments in training to promote, develop our activities that are important for this new model and with this new technology model. Sometimes when we talk about digital transformation, I always say that it shouldn't be digital. It should be more holistic. By the way, we're investing a lot in technology, data, and so on and so forth. We have been monitoring our results, and our expectation is that with that we will be able to improve our clients' satisfaction indicators, also our employees' experience.
Can you imagine working with smaller and empowered teams which are cross-functional with high value missions? We want to attract and retain the best talents in the market. Continue growing. We have a lot of opportunities in new businesses and many challenges. We're trying to provide the support for all of these activities. There is also the issue of efficiency. When we start developing these mini startups within smaller teams, we end up optimizing the way the teams interact. We are pursuing with discipline towards efficiency. At the end of the day, we will have an impact on different indicators such as business resilience, among others. This is the overall panorama in what we understand as the company's transformation. Excellent. Yes, thank you very much. As in the presentation, I said that it was both André with investors' opinions.
Now we have a mission to improve relationship with investors, with credibility. Cunha has actually made a very appropriate comment. We talked about the history of the company, where we're heading to the new markets. Leo and Cunha clearly talked about transformation and how the company is organized so that we can have exponential growth in the long term. One of the main competitive advantages in the company. Our distribution channels when we talk about retail. Today, we're talking about digital advisory, so I wanted to include Guilherme Sant'Anna, who is responsible for the different channels. Of course, our commitment, Sant'Anna, is to offer the best experience regardless of the channel, because the client will choose at the end of the day.
Could you discuss the importance of these two channels and how you expect them to interact, and what are the priorities in this area in XP? Well, thank you very much. Good morning, everyone, my partners and those who are watching us. Before I start talking, I would like to reinforce Maffra's and Guilherme's message. This is only the beginning. Today, we have the evolution, the distribution of channels in the market, and it may seem that competition has been saturated, but there are so many opportunities. Our market shares are still low in our core business. It is almost 90% and is still concentrated in the traditional areas, including banks. Our market share is even lower in other areas, so there is a huge potential for us to continue growing.
I think that the different channels and their role in this process include four pillars, reach, intelligence and teams and people. We want to have channels which will reach our clients, including direct channels, indirect channels, our partners, including consultancy models, advisory, resource management. We're going to have a full portfolio to meet the needs of different clients. How can we reach all of Brazil? Because today we are concentrated in the capital cities. We want to go to areas we haven't been yet with our brand or model and our advisory. There's a lot for us to grow in Brazil. Intelligence. How can we provide tools that will scale up advisory in Brazil? We know our clients well, and it's important to make this relationship more fluid, reducing operational time, increasing time that will generate value.
We have invested a lot in platforms, in apps, CRM to improve this intelligence. People. Training people who share the same culture. People who come from other companies and were not happy there, they are familiar with our culture, and they're happy with us. They want to innovate with us, apply their ideas, experiment other types of long-term relationships with our clients. Guilherme always talks about this. We do not have any transactional relationship with the clients. Our relationships are always in the long term. Our culture enables it and makes it stronger, actually. We can develop a full portfolio together. We truly believe in this.
We have been training people who do not have an experience with banking, and we are developing a team that does not come from the financial market, but will learn from us, will learn from this cultural immersion so that we can better serve our clients. These are the four main leverages which will allow us to improve our presence in Brazil, our market share, and will enable us to take our business model to our clients. I see different trends, as I mentioned a while ago. Clients are still poorly served in Brazil. The relationship with the traditional banks is very poor. The profession of advisor will evolve a lot. We have a lot of opportunities to provide better services, and there will be a lot of opportunities in this market.
The home office model that we've been testing, a direct channel and our channel with partnerships everywhere in Brazil without having a physical structure and office. This model has proven to be very successful. For example, we started the XP Engineer process, which is our channel scattered throughout Brazil. That was done 15 months ago, and the first practices and the first advisors who have joined us have improved their productivity, even though the market has been oscillating, which only proves that this model is inserted in our culture and has a good purpose. Regarding regulatory issues, we have changes that have come for the better, bringing in innovation, more entrepreneurship. The capital that comes in from this market will further encourage competition, and our services will end up improving for our end customers. This is what I have to say about advisory.
I'm now going to talk about the digital world, which has grown continuously. The proportion of clients with a self-help profile has increased. We have anticipated this movement when we created our brand portfolio, XP Investments service two different types of clients, those with advisory and those without advisory. We've been investing in this for a while now. Our experience is fluid. We give an option to the client who does not want to have an advisory and if the client wants to do it on their own. We have more information about the client, about their consumption behavior, contacts, navigation in our apps. Then we can offer customized solutions that will meet their needs and desire. We are engaging people who use the recommendations we make with a higher NPS, sometimes also with a better portfolio in terms of suitability and objectives.
We've been increasingly investing in this more fluid experience for the client which likes to do things alone or based on self-help. Today, we have improved our level of data intelligence. We have a vision that will reach the client, the end client. We will evolve a lot, but we have different indicators that have shown very good results for this profile of client. Talking a little bit about trends and how our business is going to evolve and our contact with these clients is going to evolve. We have a digital purchase model. We are diversifying using new platforms. We're also teaching our partners to invest in digital models.
Partners who represent us at the end are also purchasing the digital model, but we also have an offline model and how the digital leads into the offline and how clients who are happy with us will recommend us more and more. We will diversify our channels, our purchase channels, so that we can expose our brand to your experience so that it becomes more organic, thus reinforcing the messaging power of our brand. This summarizes the digital model. We will have an opportunity to work with it in the near future. Yes, I'm sure that, people will want to talk to you. Guilherme, I want to ask you something. We know that your history blends in with XP history and, this activity, this profession, which started in the early 2000s.
Did you expect to have such an impact with your profession, and when did you tell yourself, "Hey, this works, and it will be a trend in the future," and then what we see now is a consequence of that? Well, I felt that things started working out as I started working out as an autonomous agent. Here in Brazil, we have over 100,000 bank managers in the country. So, when you decide to invest in this activity and you decide to become an investment advisor, it's like what happens with a doctor. The investment advisor wants to help people with their financial life. Of course, you cannot compare a bank manager who works from nine to five with so many restrictions and compared to an entrepreneur who has the time with clients with their long-term investment.
These people work from Monday to Monday, and that becomes their own life. One has a job, the other one fulfills his or her passion. Since I was successful with that, why shouldn't I help other people to do the same? I'm totally convinced that this industry will grow a lot in the upcoming years, not only with independent advisory because there are many people who want to become our employees. They want to move on with their career, but in a different way. We have the autonomous agent who is an independent entrepreneur, and we have the entrepreneur who want to have a job and grow in the company. They want to be our partner. These two models are very harmonious. This is a trend. There's no doubt about that. Excellent. These are wonderful stories. Okay, now changing topic. I wanted to make a comment.
When we connect our main leaders with investors, meetings usually take 1 hour, 1 hour and 15 minutes, and you can't address everything. Today, we have a three-hour event, and we are discussing the main assets because we must be dynamic. I wanted to say that this is amazing. Well, I am really impressed about how we are following our script. We're very disciplined, and this is not the usual thing. Well, don't say it, and we will start it. Well, there are no barriers. I'm now going to turn over to José Berenguer, called Zé by many. He's going to talk about the XP Bank, an emerging bank within the XP structure.
I know that this is a challenging mission to do it in 10 or 15 minutes, but could you talk about the main challenges, what are your challenges and what have you spent most time with?
Well, good morning, everyone. I would like to thank André and my partners. It's an honor to be here with you today. I'm going to talk about three different areas. Two of them are growing exponentially, as Maffra mentioned in his presentation, and there's another area which is more established. I would like to make two comments. Number one, regarding the environment of the Brazilian financial system and what is taking place in terms of the regulator's agenda, not only in Brazil but worldwide. The use of technology and regulators leading to more competition, price is under pressure and the advantages for the society and the clients. That has to do with our mission, which is to improve people's lives. With this agenda and using a lot of technology, I could mention Open Banking. Open Banking is going into its fourth stage.
There is a series of things that have been created that makes our tax year less complex, easier and more competitive, leading to better services to the end consumer. The second remark is that we have not abandoned our core. We are an investment platform. We want to become a financial services platform, and banking is just part of this offer, just as insurance and pensions. We're going to have better services. Our mission is to have a full financial service platform, starting with investments, as Maffra mentioned, and perhaps this is the best expression of trust from an individual regarding a financial institution. The first thing let's talk about banking. As we call it, the retail bank. We have been working on some pillars, very clear pillars. First, moderate risk collateral. Credit is a complex thing.
Again, with the new two Cadastro Positivo receivables, channels, et cetera, it should be more effective. We're going slowly, going down the pyramid bit by bit. Our base of clients is very strong. These are savers clients, and we're building our portfolio very carefully, working with collateralized credit cards, et cetera. 70% of the resources that we made available to the clients are being reapplied in financial products, that is in our own ecosystem. Our credit card has a very important characteristic. It doesn't have any type of fees. We have TPV levels that are very interesting given our base, the quality of our client base. Now we're also going into the daily services, transfers, et cetera, wire transfers, et cetera, in the sense of creating a complete financial services platform. Somebody said that we could, because we wanted.
I just want to complement that. When we think about banking, we've always had a theory which is the following: The share of wallet that we currently have of investments from our clients is around 50%. That is, that means that half the money of the clients that invest with us is still out of XP. If we could two-fold the company, if we were able to bring 100% of share of wallet of the clients, of course, this is a very difficult mission to bring the 100%, but we believe we can increase. When we talk to our clients, the most important thing of why the money is not yet fully with us is because they need services that are end to end, or they leave the money there to avoid some kind of fees or charges.
For those who don't know how Brazil works, in Brazil, if you have a checking account where you receive your salary in a bank, you usually pay a monthly fee. This monthly fee can be somewhere between, you know, BRL 15, which is like $10. A card can be like BRL 1,500 a year, which is around $300 a year. The rates, these fees are very high. The bank says, "Leave 100,000, 150,000 invested, and then I will give you an exemption of these fees." What is our theory with our transactional?
If we cut the link, in other words, if we offer the services to clients with adequate fees and products, we cut the link to the bigger bank, and we're able to then bring the share of wallet to XP. When we start analyzing the cohorts that we have had since the beginning of the year, we see this potential increase in share of wallet happening. The theory is really concretizing itself.
I'm sorry to interrupt you.
No, no, that was a perfect comment. We understand that the banking products are a way for us to make our clients even more loyal to our ecosystem. That has been done and proven in the last couple of months. Going to the second pillar, which is the part of companies. This is a segment, as mentioned before, that was not as affected by the technology platforms. Individuals, there was a very important movement with big players establishing when it comes to-
Legal entities that were companies, especially smaller companies, there's still a lot to be done. We already have in our ecosystem around BRL 60 billion of assets under management. More than 40,000 clients. 20% of our portfolio comes from that base. With the relationship with these clients, we are able to leverage our ecosystem and a lot of cross-sell. We do investment operations. We end up doing private banking of the shareholders, generating assets for our investment banking. Therefore, we're able to integrate that in our ecosystem and make that base profitable. What are we looking for? We're looking for impeccable services, adequacies, technology, simple agreements, simplicity for the space and also for individuals. That is what we have been building for this space, which is already in-house. As Maffra said, the sense of capturing or bringing more business from these clients.
That's what we have been doing. We understand that there is this opportunity to improve the quality of the services that are offered, for the space. That is what we're pursuing through bringing to market new products.
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Now let's go to the Q&A.
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We're going to have time for some questions before the break.
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This question is going to be for Guilherme, considering he's been in the company. Well, he founded the company. It's never been easy in Brazil, right? Interests are high or low crises are in and out. We've received a lot of questions that are very legit. Market is always looking forward, and they always think that it's going to be different this time. Guilherme, once again, we have some uncertainties in the macro scenario. Interest going up and the financial impacts, we're going to talk about them, CRE, et cetera, in the afternoon. Regarding the growth of the company, inflows and advisors, what do you see of opportunities in these moments of crisis?
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What I like to say is that we don't create the market, we transform the market. 50 million Brazilians who have some kind of investment in banks. That is our initial low-hanging fruit, of course, from these 50 million. 15 million are on stage zero, people who have the most among the 50 million.
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We just have to convince them that we can offer a better experience. That we have more competitive prices, and with that, we are able to more and more transform the market. We don't see scarcity; we see abundance regardless of the scenario. With low interest rates, people are going to keep on investing, using credit cards, investments and other things. We just have to be competent really in showing that we are serious, we have credibility for people to trust us. From the standpoint of having our growth affected, we must remember that Brazil is a conservative country. People invest a lot more in fixed income than risk assets. I'd say that higher interest rates make our business even more attractive and even more profitable.
Although we want the country to have low interest rates and controlled inflation because that makes Brazil grow more, capital market grows as well. Our mix of products makes the company anti-fragile and therefore will be growing in any scenario. I personally like more challenging markets. When we have a little bit more volatility, what we feel is that our competitors, the banks, they end up not having a commercial team that is capable of coming close to the clients in the right time as we are able to do. As I said, we go from Monday to Monday. We're close to the client with events and luncheons and dinners, et cetera. That's what the client wants. The client wants to trust the company, wants to be close to the company, wants to be informed in good and bad times.
All the crises that we had, I don't know if it was the same crisis or not, we'll only know it later, but in all crises, we gained market share, and we came even closer to our clients. This strength is attribute of trust and when, the more stable moment ends, and it always does, we grew even more intensely. This crisis let's say it's a crisis; it won't be the last. Not the first, not the last. We got used to that.
Excellent. Thank you so much. This one goes to Maffra and maybe Berenguer about the new verticals.
Just a quick comment. The first question was sent by Tito. He works in Goldman Sachs. André, a lot of investors confuse our business with like B3, comparison to B3. Since we started, I started the company in 2001, it was focused on teaching people how to invest in shares. It was also the financial advisor focused on equity. We bought the brokerage, and we kept focused on equity for a while. Only in 2009 or 2010 we started having a complete vision of things. I believe that a lot of people still bring this past with them and think that we have a business that is very much related to variable income. Of course, there's some relation, but it's very low. Currently, our business is very much...
It's a lot more focused in investment as a whole and all its derivatives. That is going to keep on being smaller and smaller throughout time. Let me add a concrete an intro on what you said there, Guilherme. In 2008, 2009, if I'm not mistaken, is when we achieved number one as a retail broker in Brazil. 2008 was a challenging year due to the subprime crisis. At that time, XP was mostly a mono product and mono client. It was retail business. Yeah, 100% of our revenue came through brokerage and derivatives. Exactly. When you look today at equities and futures, obviously there's volatility depending on the mix of products, but it represents less than 25%. 20% depending on what we have in terms of scenario.
That shows how the company went from 100% to 25. Yes, it definitely transformed itself throughout its history. Our variable income market share has been growing more than an all-time high in assets under custody, 33%, more than twofold the second competitor. The other thing that I believe that is very much aligned to what you said, during our IPO process. IPO, when you know the dynamics of IPO, you have 40 minutes to deliver a pitch to explain to an investor that is not familiarized with your business, with all your background. You have to be very sharp and straight to the point on those pitches. In that moment in 2018, actually, we explained the tailwind, which is the low interest trajectory. XP has done this and that throughout its history.
It's very well positioned to be the winner of this tailwind and equitization. Brazil is very low penetrated from the individual standpoint, individuals negotiating shares in the stock market. That was very obvious that it was a booster for XP. In fact, it was. This might have generated some kind of confusion for some investors. That's okay. XP is a beta story. It's an equity case, equitization. The market changes as it did, interest rates going up, equities are out of favor, it becomes more challenging. There are more uncertainties and that then affects XP's business. No, that is going to change the mix of products. That was my speech. There's a. I have a slide on that. You're getting spoilers on the afternoon session.
I don't want to stay in this question for too long, but even equities, as Bruno mentioned, that represents something like 20% of our revenue. It is not a direct correlation with market share. Today, we don't charge for brokerage and most of the brands. In direct XP world, so to speak, several of these revenues, even in the variable income world, they are preserved with lower volumes and market share oscillation. I think the answer is XP is not an equity business. We are a lot broader than that. For the years, we are showing that. Let me just add one thing. Portfolio effect. As these new businesses mature, we start offsetting the volatility that comes from macroeconomic conditions or market oscillation, and we observe that.
In wholesale, we are able to observe that if share offers are slower than index, CA gain attraction, merger and acquisition, special operations. We have this portfolio effect that's more and more present in the company. Okay, let me take your cue to make Guilherme's message very clear in terms of diversification. He mentioned diversification in individual. Here, our financial life is concentrated in XP. That is our life project, as Maffra said. Now, the company. You want to diversify within the company. That's how we think, and that is what XP has been doing throughout its life. As I said here, in 2008, 2009, it was 100% retail and equities. Now, when you look at 2021, several new businesses that we have already started sharing here.
Throughout our future trajectory, this diversification is going to amplify. Okay, since it's become a roundtable here, I wanna make a comment as well. Look at the size of the opportunity in Brazil. BRL 820 billion in revenue. Our cost matrix is a lot more efficient than the incumbent banks. We have a different culture, and that, I would say, is our biggest differential, Bruno. Today, we have a way of working that is different, and what we understand that is going to win the game in the long term is precisely that. It's our way of looking at things and executing our plans. What does the client want? The client wants to have the best experience possible with the best price.
If we are able, and we are going to get there, to keep our cost matrix better and better managed and lean and efficient, while offering to the clients the best experience and competitive prices, obviously, we will gain more and more faith and more and more transform this revenue, which are still in the Brazilian incumbent banks. It's not an equity business. Equity is yet another line. Yes, it is important, but a lot less important than it was in the past. It complements our ecosystem. We made a huge mess, André. We made a mess in your roundtable. No, no, amazing comments. Very, very pertinent. I'm going to join two questions about banks. We might be able to start with Berenguer and Maffra to complement XP. That's XP has a banking. Wouldn't it be necessary to advance the non-collateralized loans and personal credit?
This is a question about risk, José Berenguer, if you want to start by answering, and you mentioned this at the beginning, but it's good to go deeper. There are two things to answer, there's two ways of answering this question. First, it's worthless for us to go for business in which you, like, break the client in six months. Today, if we get the price of some of these products, especially the ones called clean, it's almost impossible for clients to use that intensely to survive for over six months. We understand that these are products that are demanded by the clients with the new, with the new tools created, such as receivables, channel, Open Banking, et cetera. The tendency is that the risk of these operations, the risk of default, to decrease, and then we are able to bit by bit go into these business lines.
Credit hurts. Credit needs culture and process. We are starting in the low-hanging fruit, collateralized credit. We intend to go very carefully into that and making it viable for the clients and not making the clients lose its position as a financial system. The second observation is, if and when we go into that, we're going to be careful, retaining very little risk, not piling up credit assets in our balance sheet. We discuss this all the time, right, Maffra? We're always assessing these products. This is asked by our clients, but we want to do this calmly.
Quality of an impeccable performance and the right pricing. I'd just like to piggyback on that and say, when we look at our client space today, and there are 3.3 million clients. We have a credit risk that is very good for these clients. These are clients that have investments. We have a financial status that is above the average in Brazil. We have credit risk, which are very good. When we analyze our base, 97% have an expected PDD below 2%, 97% of our base. We really have a beautiful blue ocean to work with credit products with very low risk.
What we don't want to do, which was not in our radar, clean credit, just to use the example that you shared, is to go into the open ocean with a profile of clients that is not our profile, just to have millions and millions of clients here. Giving credit does not seem to be the low-hanging fruit in the short term. We're going to advance in the clients that we have in-house with very low credit risk. We learn, as José Berenguer said, with credit, you only learn by creating it, by giving it. We are learning, evolving and advancing. We have a lot of discipline, and we talked about this in the beginning. We like to go after the low-hanging fruit. What does it mean? We follow a clear sequence. One, two, three . Some entrepreneurs go to 50 before they go to step number two.
Where you have more revenue with less effort and then a little bit less revenue with a bit more effort. This is what we're pursuing. Accelerating and start offering credit to the clients who are not at our base. That means we will be running ahead of the game. We want to do a long-term strategy, and so we have to act as an entrepreneur, invest where we have to generate capital and take higher risks later on. Going into segments. This is a strong expression where we will harm the client, charging 300% per year in credit or, you know, or in overdrawn accounts. So, that doesn't make any sense. We must go into segments where we can help. Segments where we can help them more or less. We better not go into it because it is not really aligned to our culture.
There will be phases where we will be able to go into that and work in an effective manner with lower prices. Those who start playing right are the ones who go farther. Anyway, perhaps as opposed to what other people do, and there's no right or wrong. We have to do what we believe in. We are developing a 20- to 30-year project, so if it's going to take us one, two or three years to start working with a new business line, you know, this is nothing for us because we are into a long-term project, 20-30 years. We follow the right steps at the pace we believe to be adequate. We harvest our fruits in the right sequence until we get to number 50. That's true for every line.
We're not going to start accelerating things that do not make us comfortable or where we know there will be risks of credit or of getting lost on the way. We're going to move on to places where we're comfortable and where we can generate results. The credit card issue. Sometimes we talk to investors and they say, "Why don't you move faster?" I will say, "Well, because we want to do things well done. We want things to be impeccable. We want to give our clients first line service." This is how we view everything here. What does it mean we're going faster with credit cards? We will be within the top 10 players in a year. We're not going slow. We're going fast. At a pace where we have profitable businesses, we're growing.
We will continue growing fast, but in a sustainable manner where we can have returns. Today we have 200,000 active cards. It only shows the beauty of having the right clients. The right clients in the sense that the service you're adding to that one specific client will generate value. Yes. We will have one or another player that will have the same volume TP we have in Brazil. But there's no such client. You cannot say we're going slow. Going back to the previous topic, how can we have clients trust us with their third most important thing in their lives? Then when you decide to invest, you're not buying something for the short term. You trust the company, you trust the advisor for the long term, so we can offer other services.
The company is transitioning and this is what we're going to do in the upcoming years. We're not going to start wrong just because a new company has done A, B, or C. We're not going to change our strategy. We want to be efficient and generate returns to shareholders and optimize each one of the steps of this journey. Well, we have another question. Cunha or Leal, because you're not here, it's more difficult for you to participate, but I'd like to know if you want to add anything to this discussion. No, I think that you have commented everything, but there's one thing I wanted to add about going against the wind or, you know, in the business areas, regardless of the scenario, clients must invest.
Regardless of the scenario being more or less favorable or the interest rates being higher or lower, the client has to invest. The client wants to invest. Bottom line, what does it mean? The most challenging scenario is when you really see the difference in services. When you have a very turbulent scenario, because when everything is going well, everything goes well. The advisory is good. When you have large banks trying to play with the platforms, you know. When the scenario is more challenging, then you see how important it is to have an advisor. This is my contribution to the previously made comments. Well, I'm now going to turn over to Sant'Anna, but you can add your comments. You've been involved with the advisory channel. In the past, we've already received it, and we will continue doing so. There's competition. We treat it naturally.
We invest. We found ways to establish partnerships. We have received three or four questions about how we see the evolution and what are the perspectives, more specifically regarding competition in the AI segment. Well, once again, our main competition is still with banks. What we see in terms of, autonomous individuals is just a minor share when we think of all of the opportunities. Guilherme talked about the number of people who service clients in Brazil today. We still have a lot of opportunities to grow. 90% of the investment share. That's not to mention other products. Other products that we're going to compete for. It is only natural that over time, we have competition. We've seen it happen between brokers. We've seen banks adapting, creating other networks so that they compete with us.
Once again, we truly believe in the power of our culture and the power of the way we service our clients in the long run. We are very familiar with our whole network. It's been done over time. We know their performance, their models, their portfolio allocation strategies. We want to be closer to these entrepreneurs who are aligned with us and that we know well. We will more and more support this type of relationship.
At the same time, you talked about costs, we have invested a lot in gain of productivity when it is partners or the employee who decides to work with us, choose us not only because we have an X, Y, or Z product, but because we have platforms and tools that will support them so that they can be more productive, having higher scale, and the needs of their clients using their own way. It's important to define that. We want to be the preferred choice of advisors so that they can have a long-term relationship with their own clients. This is very powerful. Once you develop a trust-based relationship with your clients and the advisors, changing platforms is very difficult. They have to learn how to use different tools. They will say, "Okay, this broker is no longer good.
You have to use that other one." It's very important for us to engage our advisors, our clients, align them with our culture. I think that our network will be able to grow sustainably and align to our values and our culture. Competition will always be there. We do believe in our model. It will continue growing. There's a lot of market, and those who are aligned share it with us, and we will continue growing with that. Well, I have a comment, Sant'Anna. A very serious autonomous agent who is committed with the long term does not want to change brokers because they don't want to disturb their clients.
Okay, how did you think it was the best company in the world and ask, "Now you're changing." Bank managers are the ones who go from one place to the other all the time. A bank manager will change places every two years. Clients do not want that. They want reliability, and they want things in the long term. We know that there are competitors that end up talking to our offices, and we are in a very good position to evaluate what office are indeed competent or not. We're familiar with the client, we're familiar with the engineers. We've already protected a large part of our network. If needed, we can identify and of course, we can get to the best contract possible because we know them better than anybody else.
More and more what we had in the past will be less relevant, but it's possible that some things will still happen. Perfect. Thank you, Guilherme. We're going to the one before last, and then we have the financial section. Mauro, I will start with you. We're talking about connecting the dots, not for the short term, but we were evaluating everything with an open mind. We've already received some questions, as usual, about the market infrastructure, competition and shares and international expansion. I wanted you to connect these dots. Ask the question before last in our Q&A. I will start with the first part of the question because it has to do with competition with the stock market. We do not have such a project. We believe in a partnership with B3. We have an excellent relationship with them.
We have excellent services that are provided by them. Of course, it is a client-provider relationship. We do have our negotiations. We've talked a lot. We believe this is the way to go. We do not plan to start competing with the stock market. This is not where we're headed to. What was the second part of the question? One of the more traditional areas in Latin. Well, we always discuss this internally. We anticipate some expansion, some international expansion. We have moved in that direction, and we have simple things. When you look at the size today of our international fund, we went from BRL 30 million in one year, and we will probably reach BRL 15 million next year in our international platform.
There are simpler ways of expanding, but we have, in fact, some forms of expansions with our office in Miami, something in Latin America. This is not 100% clear yet. We're beginning. We do not want to go to country number one, two or three. We want to find ways to become a hub for Latin America, where people will support us, and we will be connected to U.S. We see clients in Latin America as a hub. This is part of the logic. We are still organizing our strategy to do this, but it is a desire. Bruno talked about diversification. We want to diversify more and more in terms of international revenue. I don't think that we'll start working with the retail market in the U.S. or we're going to have XP in country number one.
This is not what we're going to do next year. We're going to find more organic ways for this expansion. Mauro. Since you know our company, and if you think in the very long term, we're going to become a global company. We need to have a company with a culture and mindset that XP team has. Let's look at the logical sequence of things. For you to be successful in doing so, you must have relevant leaders in the company that are in fact taking this project forward so that things will work. Because whenever you go to an area where you're not very familiar, the challenges are greater. You can do this by M&A, but there is a right point in time for you to do that.
When you look at opportunities in Brazil, and they are huge, despite everything that has already done and transformed the financial market, that is something that demands focus and dedication for us to be able to deliver as close to perfection as possible. Of course, any company considering expansion and growth, which is our case, there is a logic sequence for things to happen. Yes, we have the cost of opportunity. We went from BRL 800 million. We already have a plan to address BRL 500 million, and that's opposed to the international expansion that we see right now. Let's do some things. We're not going to colonize Latin America right now because of the cost of opportunity.
Yes, it's easy to choose some country and say, "Okay, we're going to put our flag in there," but then having results is a totally different thing. Something feasible in the short term is low-hanging fruit. In fact, we're offering Brazilian clients who already invest with us in Brazil to allow them to have international offshore products. It is in the order of 3%-4% nowadays, $5 billion-$6 billion. Penetration is low. Investors in Brazil are used to diversifying at most in Brazil. The culture for Brazilians is a culture of savings account. We have over 1 trillion BRL invested in savings accounts. Bringing our local clients to understand that money has no color, no race. We have to have a balanced portfolio with low risk. That's lower hanging fruit.
We already have an international corporation and helping our clients see that is a huge opportunity. The consequence is to do this step well, the next step will be natural, which will be finding this country, this region, and keep on moving forward. I think that what Mauro Guilherme Bruno said is that we're going to meet the demands of our clients. Our clients want to go international. We have the branch of the bank being opened in the first quarter of 2022, so that they can help us be more effective in this offer abroad. Excellent. Okay. I want to add a comment to this ecosystem. You know, we have questions coming from potential clients.
We will not have enough time to talk about this more precisely, but seeing the channels of the different companies and our IPs, it's possible to find new solutions. We now have a lot of interesting things here. Bruno, you as CFO, you take care of the cash of the company. We always have questions about our M&A strategies. We have worked with Insurtech, Fintech. Will that change? What is your vision for the next few years? The M&A strategy is in the world of assets with minority participation. What is our goal? It is to develop this ecosystem because we can have better liquidity, bringing in new products, creating new products for physical persons to invest.
The capital market, if it is developed, this is a more efficient way of disruptor in terms of the bank, especially in the world of credit. When you look at the BRL 800 billion of revenue, the vast majority is in the world of credit in its different segments. An analogy, the U.S. market, which is of course more developed. When the hedge fund industry started growing there, the banking system and the way the financial system worked in the U.S. was one and ended up being totally different from what it was. Because a part of the funding for a business to grow and develop came exactly from some market capital. In my humble opinion, that is a more efficient way to allocate capital and ends up being beneficial for the country in terms of its development.
This is a clear M&A strategy that we have. The other M&A, because we are an ecosystem of entrepreneurship. XP attract a lot of entrepreneurs who want to have some type of partnership using our potential. We always say that at XP, whenever we receive a project in VCL, the VCL is positive and it's similar to VCLH, for example, a clothing store. The VCL will be positive, so let's go into e-commerce into this. Of course, it can't be that way because we must establish priorities, what will lead to better returns and what is part of our strategy. We will continue establishing partnerships. Some of them may turn into M&As, and we are always on the watch for opportunities that may be related to our strategy. When we look at it, we can see new verticals being developed, credit, banking, companies, securities.
That takes time. It demands investments and effort. We always analyze the funnel, and buying doesn't mean buying as in purchase. You can hire service; you can establish a partnership or eventually purchase. We're always open trying to identify how we can accelerate in these fronts, how we can accelerate the creation of new services, and then some M&As and partnerships come into play. In a more organic way. Instead of buying something huge because of all of the challenges involved. M&A must be related to the strategy of the company. It must include cultural fit. That's very important. M&A on paper with a good narrative looks wonderful. Then when you integrate and execute, you're talking about a business which is run by people. You have to align that all to the cultural fit, to purpose, and in financial terms, it may.
It must pay off. If you have a cultural fit and if the finance area approves it, we're always willing to analyze any opportunity. Perfect. This is the last one, I promise, and then I will ask Fernando and Martha to share a message, an end of year message. In fact, Martha, crypto. This is a topic you understand a lot about. We have clients and investors. What are the next steps and the timing? What can we talk about that? Then let's wrap up and move on to the next session. Well, I'm enthusiastic about crypto coin. I understand a lot about the technology and the purpose. Behind crypto, there's always a project, and you must be able to differentiate what is a serious project from something which is empty inside.
Whenever we talk about crypto, we had an exchange, and we called it XDEX. It was founded in 2017, if I'm not mistaken. 2017, 2018. Last year we decided to close it, not because we do not believe in it, but because in 2017, 2018, we had a different regulatory environment in Brazil, and that was not part of the group's aspirations, and we didn't have enough synergies. At the time, we did not see a lot of opportunities. It must be integrated and available for our clients, and that's why we gave up on it. We have carefully looked at this market. We have gone from product development such as apps and funds and so on.
Of course, but the idea is for us to keep on moving on so that we can, in fact, make more products available to our clients so we can expect some new things for next year. In terms of products, our clients should have this as a different class of assets. It's more volatile, and it has less representation in our clients' portfolios. Investments in active cryptos should have lower representation. It's a technology that we have to be close to. I do believe that the financial market in five or 10 years will be totally different. We're not sure how different it's going to be, but it has to be with tokenization. Digital assets have to be part of this market. We've always been innovating, and so we want to work with them.
We are looking at them closely, and we'll definitely have some new things in the future. Guilherme, would you like to share a message? Well, the message I wanted to share for our wrap up. Well, we talked about the type of entrepreneurs we are. We want to return to our shareholders. We've learned well to work with revenue, manage investments with quality. What about clients? Well, in 2014, seven years ago, we closed the year with about BRL 45 million of net profit. Seven years later, we will perhaps go above this 100 times, right? Yes. If we consider the next three quarters, it will be 100 times higher. Within seven years, we have multiplied our results into 100 times. I started the company from scratch way back then. We had to learn how to provide results.
I always say that it's easy to do things well. The difficult thing is to do this by making money. If you give me an infinite budget, we will do something wonderful for you, but that will not work over- time because revenues and expenses will not be balanced. We don't think that way. We like to do things well, but they must be healthy over time. So, what are you seeing here? What you've seen in the past years is what you will see in the upcoming years. We manage expenses very well, and we enchant our investors more and more. Perhaps Brazil is a country with the most opportunities in the world, especially in the finance sector where the incumbent banks are still focused on the product, not on the client, with expensive fees, services that are not appropriate.
Our mission is to keep on transforming that in the next years. I am sure that we will do it fast. Thank you once again.
Thank you, Guilherme. I'd just like to thank Guilherme, Maffra, Berenguer, Sant'Anna, Bruno, Leal, and Cunha, who are here online with us on the screen. Far, however close to us, we're going to have our second session in English in five or ten minutes from now. Thank you so much for the participation. We now have an individual base of clients that are also participating in the event. I hope you're enjoying it. We will be back with the financial section in five or ten minutes from now. Again, thank you.
Hi, we're back with XP's Investor Day 2021. We will conduct this session in English. If you are watching this session in Portuguese, you will see the slide in Portuguese and the other way around. We should be fine. We wanted to do a very democratic event, so we are switching languages here to talk about financial highlights of the company, some of the main questions that we get from investors on a daily basis. We hope you find this productive and insightful. We will be available for Q&A at the end of this section. Moving to our first section on the financial highlights.
Again, we talked about that on the first, on the business section about the effects of volatility, changing macroeconomic variables on our business. Bruno, if you could reinforce those effects and now talking specifically about our PNL, that'd be great.
Okay. Thank you, André. I'm gonna be quick in this session. We're gonna go through those three topics, the macro impact we have already talked in our early session, the financial revenue, and then the new verticals that we're gonna share some power metrics and more data with all the investors. Looking at the macro impact, what this slide shows in terms of number is exactly what we described earlier, the portfolio effect. Basically, what you have, at least for me in the green line, is the component of our revenue of fixed income plus floating divided by the equities and futures. As you can see, it goes in the same way as the Selic rate.
At the end of the day, if you look at this ratio, it's a ratio that when Selic rate is going up, it benefits fixed income plus floating, compared to equities in future. When you have interest rates going down, it's the opposite way around with a short lagging time. On the back of the slide, you have the shadow area, which is our revenue growth. At the end of the day, the revenue keeps growing. What changed, as we said, is the portfolio, the mix of the revenue stream. Now, moving to the next slide. Here, the financial components, that's another question that we get a lot from investors, is about the net income from financial instrument.
By the way, I checked the other day at Bloomberg, and when they look at the revenue of XP, they only get the services rendered as revenue. They do not get this part, which is wrong because that's a very important component of our total gross revenue. We are in the financial industry, we work with financial instruments, and we do make a very recurrent revenue with net income from financial instruments. We divide this part of our revenue, the flow business, in four big blocks. Number 1, we have the activity, market making. What we call market making activity is basically to enhance the experience of our clients and bring liquidity to the secondary market as we described earlier. It benefits the development of the Brazilian capital market itself.
Among the market making activity, we have fixed income, all the financial products, structured notes and other usage of derivatives to hedge your equity portfolio and things like that, and also the retail liquidity provider. We have a second block about credit products, credit related. The third block about the floating and the remuneration over our adjusted gross cash. The last one, the liability management that goes into net income from financial instruments. Moving to the next one. Here we see. You have on the bar chart the number of, in millions of, this revenue all together, net income from financial instrument. As you can see, it keeps growing in a very steady pace.
You have the component of retail in that revenue because in that revenue you also have institutional clients together there. Retail represents like more than 80% of that revenue. You can see how recurrent it is and grows with the growth of the platform in XP, as we have said in several earnings calls that we have had with investors. We put together in this slide the VaR, our risk metric. Because for sure when you are buying and selling financial instruments in the secondary market, you are taking some kind of risk there. We do that only to provide the flow.
Because of the ecosystem XP has built through its lifetime, the flow that we have, it's huge and it allow us to hedge the positions, including not only retail clients, but also institutional clients all together and corporate clients, and take a very low risk to generate and improve the secondary trading of all those different markets that we are participating in. As you can see, the VaR of one day with 95% of confidence has been pretty much stable. It's like 25% of the limit that we have established in our treasury committee, which by the way is a very strict limit. It's only 50 basis points of our net worth, and we use a lot less than that.
Basically, the message here is we do use capital, our own capital for that business, but it works much more like a warehouse where we are developing the Brazilian capital markets, enhancing the liquidity in the secondary trading, than taking a directional risk in whatever direction that is. We are not allowed to do that. We only take some risks because of a client demanded a position from our treasury, and then we go and hedge that in the market. Of course, some of the transactions, they are not perfectly hedged, and then we have to take some risks, and we do that respecting that risk policy that, as I said, is very strict.
Just to reinforce here, the message that Bruno just said. It is not a business about our traders taking bets, but it's a business related to our clients, okay? It's a much more recurring business than directional or big bets on interest rates, FX or whatever. It's a client-driven business. That's the key message here.
Yeah. The third quarter of this year, the last public, net income from financial instrument represented like BRL 1.6 billion of total revenue, and the VaR, BRL 14 million on average each day of the third quarter this year. I think that's, you know, those are the numbers, and it shows it's a client business recurrent and will keep growing as our platform keeps growing as well.
Just one comment. We did this whole explanation because we receive a lot of questions why the financial revenues have been outgrowing the services revenues, right? At the end of the day, it's an output of the mix, right? For example, until August 2019, the ROP didn't even exist, right? We made money with futures, with brokerage. That was recognized elsewhere in the income statement. Starting August 2019, those revenues were recognized on financial revenue. Fixed income is also there, which is more important right now with higher interest rates. It's an output of the mix, right? It's not a given trend. It's something that, I mean, to our previous discussion here about
To think about this point, in my view, is three factors. You have the growth of clients in our platform. That's number one. Number two, you have the cross-sell, the penetration effect, because Brazil is under-penetrated when we think about capital markets, when we think about products being traded in the secondary market. Couple more of slides. Let me just give a little bit of context here. When we did our IPO, we simplified somehow what is a very complex business. Investment is complex by nature. It's a dense topic. You have many products. People usually don't understand about it. We decided to simplify, and we had Retail, which is three-fourths of our total revenue.
The way we get to the retail revenue is by ecosystem multiplied by a take rate, and then you get to the retail revenue. We
Bruno, excuse me. Sorry. We're having some technical problems. We will be back in a couple of minutes. Thank you.
Hey, we're back online here with XP's Investor Day. Bruno was just about to discuss our new verticals power metrics. Bruno?
Yeah. Sorry about that. Going back, I don't know how much you heard, but just to finalize the previous slide, the key message there is net income from financial instruments, something that will keep growing in our view. Three components: client growth, higher penetration, and development of new products in the secondary market. We use capital in that business, taking a very low risk. We do not take directional position. All the positions we take is driven by one client need, either an institutional client or a retail client, and we hedge.
As there is no perfect hedge for some of the positions, we end up taking some risks, but with a very low VaR, which in the third quarter it was like 14 million BRL to deliver a revenue of 1.5 billion BRL, 1.6 billion BRL. Now, moving to the power metrics and new businesses. I was talking about the IPO time. At the IPO time, when we think about investments is a very complex topic, right? We try to simplify, and we end up with retail revenue. What drives retail revenue in the investment business is AUC. That's the main KPI because you make money with money, and you need the custody in your platform to make money out of it. You have a take rate multiplied by the average AUC.
You reach the retail gross revenue, which by the way has been around 75% of our total revenue. No, no. Move one slide back, please. Now, then, after the IPO, we enter in new businesses, in new verticals, and we heard the pushbacks from investors and analysts because they were modeling XP based on the AUC, the main KPI for investments, and then somehow the AUC went down because of market conditions, then went up. That was correlated with the retail revenue. The AUC went down, revenue went up. Then some investors and analysts were questioning, how come? What's going on? There are some or part of the retail revenue that is not AUC-driven. Also, we have those new businesses that are small nowadays, but they are growing really fast.
Our intent here in this Investor Day is to show you more data that from now on we are gonna share with the market. We understand that it's important for you to model those new businesses, not from the investment business itself. We are gonna share four different verticals here. Pension funds, which is an extension of investment at the end of the day because we are talking about investments with a tax benefit and a retirement plan for the individuals. Then cards, which there is no AUC related to it. Credit is the third one, a new business, the business that has the highest part of the addressable market in the financial industry. Lastly, insurance.
Those four businesses, you're gonna see KPIs each quarter, each year, so you can follow up the development of those businesses in XP. Now we can move to the pension example, please. Thank you. Here we brought the pension fund case. Why is that? Because that's the one that is the oldest one, two years. Two years, right? As Mafra said earlier, we started our pension fund through our own insurance company back in 2019. We have been distributing in our platform pension fund from third-party insurance companies for a longer time. In 2019, we decided to do it through our own insurance company. Basically two years. This is a business that has an addressable market in terms of AUC north of BRL 1 trillion.
We were at the end of 2019, number 10 with our own insurance, having only 0.4% of the total addressable market in terms of custody. You fast-forward to the third quarter this year, this 0.4% of market share of the custody has increased to 2.7%, and we went up in the ranking from 10th to 7th. Now, if you look on the right, the other part of the bar graph, you can see that in terms of the flow, we have been getting much more than our market share in terms of the custody. Year to date, until September, we have been getting more than 50%, 55% of all the flow going from number 5 in terms of the flow in 2019 to number 1.
What does it tell us? That this business is a very profitable business. It has a huge growth potential that we already are getting much of the flow part of these businesses, so we have a lot to grow in the following years. This example, it's what we believe we're gonna be able to achieve in the other verticals as well. Let's see the power metrics that we're gonna share with you. One, and I believe the main power metric is gonna be revenues for all those segments. We are gonna split the revenue. And those revenues, they are inside retail revenue, okay? And then you're gonna be able to look at, okay, how much of pension fund is part of that? How much of cards, how much of credit, and how much of insurance?
Here we have the last twelve months revenues on each of them. The largest one is pension fund, the oldest one that we started earlier, BRL 172 million of last twelve months revenue in the third quarter. You have the cards, BRL 94 million. That's the last twelve months, but basically we're talking about six months, right? Because remember that we officially launched our credit card in March this year, and these numbers are from September. We have the credit with BRL 81 million. Finally, insurance, BRL 57 million. In insurance, in that number, BRL 57 million, we are talking about the marketplace, not our own insurance company writing policies for life insurance, okay? Something that we're just started to do and in 2022 is gonna be different.
The revenue component, that total, approximately BRL 400 million in the third quarter last twelve months. It's something that, when we release our fourth quarter this year, we are gonna share with all of you. For each of that business, you have a KPI. In the patient fund, as I said, is pretty much similar to investment. AUC is the main KPI that we had more than BRL 40 billion in September. In that number, we have our AUC from our insurance company, and also the third party that we distribute through our platform. Our insurance company is the majority of that. It's around BRL 27 billion out of the BRL 43 billion.
In the patient fund business, just to give a view of the market share that we have when we think about revenue pool, it's BRL 8.5 billion revenue pool, so approximately 2% of market share. Huge growth in that business is standing alone. One more comment about this business, it's really good for the investments because we already have data that clients that we cross-sell and have their patient funds in our ecosystem, the churn is much lower and the cross-sell of other products is, like, almost 4 times than the clients that do not have. We see a great potential about cross-selling in our ecosystem. Cards, the main KPI, TPV. You already have that KPI. Basically, the third quarter KPI, BRL 3.3 billion.
When we look at the revenue pool for cards, we're talking about more than BRL 20 billion. We have, like, 0.4%. It's nothing. We see a huge growth potential there as well. Then credit. Credit, the main KPI we also already disclosed that is the loan book that we have. As of third quarter this year, BRL 8.6 billion. The revenue pool here we did not bring because the revenue that you see in the credit is collateralized revenue, basically. That's a market that the revenue pool, it's almost nonexistent, right? Because we are creating a market. It's gonna be the same thing with margin loan. As we enter in new credit businesses going forward, then of course we would have a revenue pool.
It didn't make sense in our view to put, like, a market share because we would have a very high market share of a market that is almost nonexistent. We are creating this market. Finally, insurance. As I said, two main KPIs to follow. The market share of our marketplace of insurance, where we are gonna sell, we have already started selling, for example, health insurance through our marketplace. We already sell third-party life insurance through our marketplace, and we will continue to sell. We also have, it's a different market, the life premium market, because we are gonna issue a written life insurance policy, and then it's another type of market share.
Those two markets, the marketplace, the brokerage business, plus the life insurance business, when you add together, we are talking about almost 115 billion reais of revenue pool. When you look at the market share that we have, nothing, because we are just starting there. Basically, the message here is, look, all those four new businesses that we are in, they have huge potential for growth. We also understand that it's expand the core. Expand the core is important because all those businesses together, they will reinforce the core business, investments. We want to be the dominant player in the investment business. We understand that to do that, we need to go to the next phase. We cannot be only in investments.
Zé and Maffra talked about in the earlier session, we need to cut completely the link of our existing clients, our investor clients, with the banks. To do that, we need to go into banking, we need to provide more services, more products, so our clients can feel comfortable to concentrate everything through our platform. Those businesses, they are enablers to our core business, which by the way, despite all the growth that we have had in investments, when we think about only individuals, not considering companies that are also clients of our investment business, only individuals, it was the BRL 70 billion revenue pool. We believe that we can be dominant there, and our market share can grow, like, more than three times only in investments.
Those new businesses, they are a very powerful enablers to make that happen. Those new business by itself, standing alone, they also are gonna be relevant in our revenue going forward and contribute to the growth and diversification of the business, which is the last slide that we would like to share with you. When we look at those new verticals, pension, cards, credit, insurance, that represented only 3% approximately of our last twelve months revenue in the third quarter this year, BRL 0.4 billion. We fast-forward to 2025, we believe that those business can represent approximately 25% of our total gross revenue, multiplying the revenue of those businesses standing alone by 25x, which would get to BRL 10 billion of revenue. You're gonna be able...
I mean, any investor analysts, of course, can have an assumption that you think it's doable. We do believe that's totally doable. At the end of the day, I think the main message here is you're gonna be able to follow up that on each quarter and see how the revenue is growing, if it's growing, if it's not, what's going on, and also the other KPIs that will help you to model those new business. With that, I mean, I open for Q&A. As I said, short presentation. Let's go directly to the Q&A.
About capital allocation in the sense, I mean, the stock has been down, right, in 2021. We have some questions here about a potential buyback opportunity and how do you see that and other capital allocation decisions now and going forward.
Yeah. We get that question often from investors. I totally understand. We take here capital allocation very seriously. We need to be very wise the way we allocate our capital. The thing is, we are a high-growth company. As I showed earlier, the net income from financial instrument, despite being a very low-risk business, it requires capital. We are not paying dividends, and we don't see this company paying dividends in the near future. Why is that? Because we have these huge markets to address, and that is the focus of this company.
I think that, and we discussed that internally a lot, considering the growth we have ahead of us, considering the opportunity we have ahead of us, we should take all 100% of our profitability and cash generation and reinvest in our growth. We are in a phase of accelerated disruption in the financial industry in Brazil, and we want to accelerate our pace as well. Maybe if we were in a different stage of the company, we of course would be paying dividends and considering buyback in shares. Right now, I think the right thing for the long term of the company to do is to use our capital to reinvest in new verticals and in our core.
Those three things: protect the core, expand the core, and build the future, in a very accelerated pace.
Great. A related question, you're talking about investments, what to do with our cash and so forth. We've been hiring a lot of people, right? This was already possible to see throughout 2021, but on SG&A expenses, especially on the third quarter. I think probably the three of you could answer this question in different ways. Let's start with Bruno from a more financial perspective and maybe Maffra and Sant'Anna can add on what is the breakdown, right? What type of people we are onboarding to the company for what areas. Bruno, what do you think are, I mean, the short and long-term margin expectations for XP as we grow so much and as we get to a sizable company?
Yeah. I don't like to give a guidance for short-term margins or anything like that. I mean, we are focused on the long term. We know that the long term is a consequence of multiple short terms, and we focus a lot in execution. You give a short-term guidance, you get stuck to it, and then you need to have flexibility to adapt and do whatever you think is the right thing to do for the long term of this company. For sure, we are investing a lot. Look, the bank. Take the bank as an example. Our digital bank has really started, you know, in terms of hiring a lot of people and investing. Maffra can help me out here. One year ago, right?
November 2020.
Yeah. November 2020. One year ago, we are creating a startup inside XP. Of course, that's gonna make the SG&A to grow at a higher pace than in a different stage. Are we frozen? Sorry. I see my image frozen. No? Are we good? Okay. Sorry about that because we have here the TV and the. Anyway. Going back to the startup. We have a startup inside XP. The bank, the cards businesses, the insurance business that we are now entering, everything new of course demands SG&A people. We are people business, service business, investment technology. We talked about that earlier, and
Expanding the channels.
Expanding the channels because we have to reach not only the capitals, but Brazil is really big. Our SG&A will grow. We also have more mature business in the investment part, and the cross-sell is really powerful. Those businesses, they expand margin, right? It's a mix. So far, our expectation is, look, in next year, for example, to talk about short-term, André, so I don't hide from your question here. We expect to have a cost burden there in the foundations, in everything we are building. We are still gonna be profitable for sure. We talked a lot the way we entrepreneur, but we are gonna have probably the peak in terms of hiring people, those new businesses, scaling them.
The revenue comes slower, right? It comes. We already had like BRL 400 million in the last 12 months, and that's gonna grow really fast though the way you see it. Yeah, maybe a good way to see it is, okay, XP, it's building a lot of different things. It's expanding the core, the addressable market from 70, 120 to BRL 500 billion. It's multiplying by four times in the next years. It makes sense a lot to do that.
Another way to answer the question is when you look at the more mature business, we see gains of scale, okay? We see gains in margin, this kind of stuff. As Bruno mentioned, we are investing a lot in new businesses. Basically, we are investing hiring people because we have to build everything from the ground. This year we hire, I would say, if I'm not mistaken, like 3,000 people. Next year we will have new hires again, but in a slower pace, looking at the new businesses, in a slower pace. Because when you decide to enter a new vertical, a new market, you have to invest upfront to capture the revenue in a few months.
What I can say is all the businesses that we are entering, they mature really fast when you have a long-term view, because most of them in 24-36 months, they break even, okay? They are profitable. Some's faster, some's slower, but it's pretty fast. We have been investing since, I would say, a year ago. We will invest next year again, but we already start to capture some revenue and that's why Bruno mentioned we have some gains of scale in more mature business, but we have new business ramping up. That's the combination, the mix that we see, why we see the SG&A growing, but I would say that we are on the verge of the peak.
There was a question on the last section about M&As, right? One thing that we are very confident about is about organic growth, right? Organic growth in all those verticals, it's about people, right? We think we're getting better at it through time in terms of hiring the best people, doing M&As of people to start those verticals, and that translates in SG&A. As my friend Bruno said, I think we will have those gains in the very near term, and you'll see that we'll mature on the margins once we start to disclose all the results.
That's actually a fascinating way to look at it, right? We analyze M&As sometimes or most of the times, we decide to do it our own way internally. Thank you for all of you.
Just to this point. Even when we decide to do internally, it doesn't mean that we are going to build everything internally. We can hire as a service; we can do partnerships. We only build a proprietary technology when it's something that's a differentiation for XP or its strategic. Otherwise, if it's a commodity, you just buy. You can buy as a service; you can do partnerships. It doesn't mean that we are building everything inside because that's another question that we receive. Okay, but are you guys building everything from scratch inside? No. We have a lot of partners for banking, for insurance, for credit cards. We don't do everything inside. It's always if it's strategic, we build. If it's not, it's a commodity, we buy.
Always very conscious of costs, right? As Guilherme and Maffra put it very well on the first section. The next question is slightly more specific about trading market share for equities. Bruno, that's a fairly. I mean, we have five times the size of the next player when we think about what we call Bovespa, right? The trading of stocks. There's some seasonality over the year. Do you see some trends there, something that you're seeing from the competition or internally that might suggest this going up or down?
Look, André, equity, retail equity-
Yeah.
Because we talked about the custody equity. It's the, you know, the first KPI, which we have, if I'm not mistaken, like 33% market share. I think the closest competitor is Itaú, if I'm not mistaken, with below 15% market share. We are more than double than the closest competitor in custody. It wasn't. I mean, in the past, it was the opposite. I think Itaú would have, like, 25%. We would have, like, less than 15%. You fast-forward a few quarters and here we are. Then you have that you can see the data in Bloomberg and other source, the total equity brokerage market share. I do not like to look at the total.
Of course, we do look at the total as well, but it's tricky because in the total you have institutional clients. Inside institutional clients, you have those clients that do not really generate revenue. You have the high-frequency traders, you have the passive funds and things like that. I would be cautious about looking at the total. The KPI that we look closely is the retail equity brokerage market share. There is volatility in that market share, especially if you look on a monthly basis, for sure, if you look on a quarterly basis also. You need to look at a longer term to define any trend.
I looked at yesterday because of the report that Thales issued. Look, if you get the retail market share of XP in beginning of this year, January was, I don't have the data here with me, like around 53%, something like that, okay? Then we hit like in March, the highest market share this year, something above the 55%. Then in June, we went back below 53%, like 52 and something. Then in September this year, we went back up to 54%. Now, November, we just got the number a couple of days ago. I believe it was like 53.4, something like that. There is no trend there. There is competition, more competition for sure.
That's no question about that. At the end of the day, the equity market share, it's gonna fluctuate, but I don't see a trend there.
Great. Thank you very much. The next one is about the retail liquidity provider, right? The RLP, Mafra and the evolving regulation, right? B3 announced recently that the RLP for equities, which will start with few names, right, few stocks, is going to be up and running soon. Do you see a major growth of contribution from that business line? Of course, it depends on the mix, depends on turnover and so forth. What is the outlook in your opinion?
Yeah. It was just announced that we are going to have a test for equities in the RLP. As you mentioned, only with a few names for now, and then they will evaluate again in a few quarters down the road and then they can include more names. Today, there are some revenues, but when you compared to the numbers, we have today, it's not as relevant as the current revenue, but there are some important revenues. With only a few names, it's small, okay? I believe that in the future with more names, then we have big opportunities to have a good increase in revenue in the RLP.
The good thing about RLP is that the study done in London showed that it's really beneficial for the client at the end of the day in terms of liquidity, in terms of price and everything else. This study is a study that you know has more data points than the previous one that at the time B3 and CVM, the regulator in Brazil, used to allow this in a test phase. I think that's one positive. The second and final comment about RLP is something that you, Maffra, tell a lot to investors. I've been together with you. When people also, I don't think people realize that there is a cap there, right? There is a cap. 15%.
The market now is going down, the trading volume, the RLP in futures, are gonna go down. Is the revenue of RLP in XP going down as well? Not necessarily, because we are already capped at 15%. Our revenue could be higher if we didn't have that cap. The market can shrink, and we still are gonna have 15% of a smaller market if that happens, to make our revenue from there and to use the RLP.
Great. Thank you. We just announced a few minutes ago or showed that we expect 25% contribution from new businesses. People are doing the math the other way around. What we expect the existing business to be, which is around BRL 30 billion, according to that calculation. Is this. I mean, since there is a consensus in the market that the take rate right on the existing business is expected to go down, even so gradually.
Bruno, are we talking mainly about AUC growth to drive the growth of the existing businesses? AUC growth to what? Sorry. To explain, right, the growth that we expect on the core business, right? In terms of the new verticals that we are entering? No, the existing, right? They're doing the question the other way around, right? What we expect for the existing business, right? Which is the difference. What is the driver, right? The question is that André made is assuming that take rate will go down, how will growing other? Yes, stable down, yeah. Yeah. I don't believe this is completely true. We have been saying and working with downward take rates for the past years, but it didn't happen.
It was our expectation, but it didn't happen because every year we create new business lines, new products, new revenue streams, and we have been able to keep the take rate for the more mature business. If you ask me, okay, 10 years down the road, the take rate will go down. Okay, probably, slightly. Our job here is to keep innovating, finding new products, creating new things to keep the take rate at the level we have today. We work with a downward movement. Take rate is not a price. It's important for investors to understand that as well. Take rate is a math equation. We have retail revenue, we have an average custody, and then you end up with a take rate.
This question, I understand why it comes because that's the main KPI to model 75% of our revenue. I say, look, flat, I don't know, because I really don't know. It can go up, it can go down, depending on what happens to the AUC and the product mix, but it's not price. Then you saw those four new verticals that we're gonna start sharing KPIs, except for pension that has a AUC associated to it, cards, credit, and insurance, they don't have it. They don't have it. You can say that, okay, credit, there is a correlation because we're gonna model as a percentage of the AUC, considering you're talking about mostly collateralized credit. I got it. Yeah, it makes sense.
It's not AUC driven at the end of the day, right? It's retail revenue. We have shown in the recent past the ability to keep growing the AUC and keep the take rate flat in the last 12 months, around 1.3. Our thinking here is how we increase the LTV of our existing clients by adding new products and new service that our client demand from us, that they are consuming in another platform in the bank, and how we do it to make them consume it from our platform. That's the game here, and that's why we are developing new businesses. Great. The last one is more of a conceptual big picture question. We don't provide guidance for AUC or market share, how big we want to be.
This particular investor, he's saying that he believes XP to have around 5%-10% of the investable assets in Brazil. He's asking about, like, long-term ambition. How far do we think we can go? It's a pretty broad question, right? We have always said that we have no reasons to believe why we should be lower, I mean, smaller than the big players, but I'll leave that aspiration to you. Get the market leader now, depending on one of the five big banks. We wanna beat them. That's it. We are aiming for the first. We always do. We know that it's hard, it takes time to get there. As Matheus said earlier, we are young.
We wanna be here for the next 20, 30, 40 years. How long we can be here. It's gonna be, you know, our goal. It's our purpose for life here. So, yeah, we wanna be number one. We are not number one now in the investment business when we think about AUC. We are not. We have a greater market share than we had at the IPO time. Yeah, for sure. Can we... I said before, we can multiply by 3x. Yeah, for sure, we can. Our market share. We are a market share case. That's one important statement. As we said before, we are not an equity business. We are in all the business of investments.
We are a market share case, and our market share has a lot to grow yet. I'm not saying it's gonna be easy. I'm not saying there is no competition. There is a lot of competition. But we do have a strategy. We believe we have a differentiated culture, as we said. We have the XP management system that Gabriel talked about. Client folks. We have our distribution that Sant'Anna here is leading the effort to make it even bigger and broader. In Brazil, we see a lot of opportunities there. We have that unique ecosystem that we keep working to reinforce it. Now we are gonna complement that ecosystem with more products that it will establish even longer term and deeper relationship with our clients.
By doing those other businesses, we start to open up new opportunities, how to address different profile of clients. Let me give you one example about it. Think about the client that has no investments but has income, good income. We have a lot of people like that in Brazil that they earn a good amount of money through their job, their work, but they spend the whole thing with traveling, school for kids, infrastructure, whatever. So they don't have savings to invest. That client, now that we have digital bank, cards, credit, insurance, it's a client that we never in our history focused on because we are only focused on investments. New opportunity.
The thing is, if there's one client that we're very good at serving is the client that invests, right? The client that has savings. What Bruno said about reinforcing our core, right? Credit, pension funds, insurance products. As we start cross-selling, people start trusting us with more share of wallet, right? Approximately we can double our share only inside our client base, right? That's the basic potential. We have a lot of optionalities on top of that. Of course we wanna keep growing. I think that's our main strength in terms of market share.
Yeah, we got one question actually about that, which was, for you to reach the BRL 10 billion forecasted revenues in 2025, for new businesses, do you need to add a lot of clients? Of course, the answer is a mix, right, of both. To Sant'Anna's point, we have a lot of cross-selling to do inside our home, right?
Totally. Not a lot of clients. We do have embedded in that assumption client growth, but it's not a lot of client because the penetration, the cross-sell inside our platform for some of those products, they are almost nonexistent.
Another way to answer this question is, as Bruno mentioned, we are going to focus first on the customer base that we have already inside XP. We have the clients that have a lot of income, but they don't have savings. I don't know when and if we will do that, but you have the clients with low income and this kind of stuff. This is really far away from our view. We believe that we have to focus on our own customer base and in the near future, focus on people with income, good income and no investments. That's the way we see right now. Of course, we'll have customer growth in the next years to achieve these numbers.
Yeah, connecting the dots once again is really our mindset here for this and other subjects. We are actually out of time. Again, I would like to thank Bruno, Santana, and Maffra so much, as well as the other leaders who are not here anymore. We would like to thank you, I mean, as a shareholder, employee, no matter who you are actually, for your attention and interest in that event. We hope to be in person next year, right?
Oh, yeah, we do. I was discussing in the break with André, and we're saying, "Wow, we should have the, you know, analysts and investors question us themselves." It's much nicer that way. You can question whatever you want to, and we are gonna answer with 100% transparency what we can tell you for sure. That's who we are. Unfortunately, we didn't do it that way, but hopefully next year we are gonna do it in person and it's gonna be even nicer. Also, I hope you like the new power metrics that we are gonna share. It's, as I said, a constant pushback that we get from investors.
We totally get it that the more data and information we provide, the best for an investor perspective. We also need to balance that with competitors because they probably are watching us right now. It's natural, it's part of the game, but we need to balance that thinking about the long term of this company, because that's all we think about. I hope you enjoy this increase in our disclosure from now on.
Yeah, for sure. We learned a lot. Next time around, we will do things slightly different to improve, right, the event so you can do your own questions, ask your own questions live. Yeah, we learn as we go, right?
Maffra want to end up?
Just to finish here, I would like to thank you everyone for joining the Investor Day. It was the first one, and for sure we'll improve, as Bruno and André mentioned for the next ones. I hope you all could learn how we think here, the way we think, the strategy, culture, people. Again, for us, XP is a lifestyle. It's something that we really believe it's a purpose for us, and we'll be here for the long term. You guys, we are the, I would say, the main investors in the company. All our money is here in the company. We really believe in what we are building here. I'm very happy to have you guys as partners, as investors.
We are just at the beginning and as you saw, we have a clear road ahead of us, of growth, and I'm very excited for the next years. Thank you very much.
Thank you.
Thank you, everyone.