XP is growing, but fees are slipping
- XP ended 2025 with Total Client Assets of R$1.49 trillion, showing that its platform is still taking share from banks.
- The retail business is the core engine, with R$14,584 million of 2025 segment revenue.
- The main worry is pricing: Annualized Retail Take Rate fell to 1.25% in 2025.
- Total Net Inflows slowed to R$94.3 billion in 2025, so growth quality needs watching.
- Management is pushing more assets toward fee-based models, which could make revenue steadier over time.
Scale meets fee pressure
XP is still one of the clearest challengers to Brazil's big banks. Total Client Assets reached R$1.49 trillion in 2025, up from R$1.286 trillion in 2024 and R$1.122 trillion in 2023. That tells us clients are still moving money onto the platform.
The bull case is simple. More client assets can spread technology, advisor, and back-office costs over a bigger base. XP also kept a high net margin of 28.1% in 2025, which shows the model can still produce strong profits when it scales.
The bear case is also getting louder. Annualized Retail Take Rate, which means the revenue XP earns as a share of client assets, fell to 1.25% in 2025. Total Net Inflows also slowed to R$94.3 billion, down from R$108.8 billion in 2024. XP can keep growing and still disappoint if competition forces it to earn less on each real of assets.
The current view is balanced but cautious. XP has a valuable platform and a large client base. The open question is whether fee pressure is a temporary cost of gaining share, or the new normal for Brazilian investing.
A platform paid on assets and trades
XP runs a tech-enabled financial services platform in Brazil. Clients reach it through XP Direct, independent financial advisors, and the Clear and Rico brands. The core broker-dealer, XP CCTVM, is where retail clients access the investment platform.
XP makes money from brokerage, asset management fees, product distribution, and services for companies and institutions. In plain terms, it earns when clients trade, buy investment products, keep assets on the platform, or use XP for capital markets work.
This model breaks when competition pushes fees lower faster than assets grow. Rico's zero-fee brokerage is a clear sign of that pressure. The company is also exposed to market activity on B3, Brazil's main exchange, because lower trading activity can hurt transaction revenue.
In Q1 2026, management said it was reorganizing around two main segments, retail and wholesale, with institutional folded into wholesale. Management also said about 25% of individual assets under custody were on flat-fee or fee-based models, with a goal of roughly half within 3 to 4 years. That shift could make revenue steadier, but it may also change how fast XP earns fees upfront.
Four ways XP reaches clients
XP Direct
This is XP's direct channel for retail investors who want access to the full investment platform. It benefits when clients move more savings away from traditional banks.
Independent Financial Advisor network
Advisors help XP gather client assets and sell investment products. The network is powerful, but advisor incentives can also raise costs if competitors bid for the same talent.
Clear and Rico
These brands help XP reach more self-directed and price-sensitive investors. Rico's zero-fee brokerage also shows how fierce pricing competition has become.
Asset management
XP offers mutual funds, single-client mandates, and managed portfolios. These products can add recurring fees when clients keep assets invested.
Corporate and issuer services
This business serves companies and issuers, including capital markets work. It gives XP revenue beyond retail investing, though it can be sensitive to market conditions.
Institutional brokerage
XP also serves institutional clients. In 2026, management folded this business into wholesale, which may make future reporting less separate than the 2025 segment view.
Retail still carries the firm
The mix below uses 2025 gross revenue and income by segment from XP's annual filing, with an other and reconciliation line to tie to total gross revenue and income of R$19,434 million. Retail is the largest piece, so any retail take-rate drop matters a lot.
What could go wrong
Retail fee compression
High impact · High oddsCompetition from banks, brokerages, and new fintech entrants is already pushing prices down. XP's Annualized Retail Take Rate fell to 1.25% in 2025. If that keeps falling, asset growth may not turn into profit growth.
Slower asset gathering
High impact · Medium oddsXP needs fresh client money to keep scaling. Total Net Inflows slowed to R$94.3 billion in 2025 from R$108.8 billion in 2024. A longer slowdown would weaken the growth story even if total assets keep rising with markets.
Brazil market and politics shock
High impact · Medium oddsXP depends heavily on Brazil. High rates, weak markets, political stress, or currency pressure can hurt investor activity and client confidence. Those shocks can also pressure credit and mark-to-market results.
Dependence on B3 activity
Medium impact · Medium oddsBrokerage and trading activity are linked to Brazil's main exchange, B3. If trading volumes fall, XP can earn less from transactions. That matters more when other fees are already under pressure.
Platform trust and cyber risk
High impact · Low oddsXP holds a large amount of client assets and data. A major outage, fraud event, or cyberattack could hurt trust in the platform. For a financial platform, trust is part of the product.
In one breath
What does XP Inc. do?
XP runs an investment platform in Brazil. It offers brokerage, funds, managed portfolios, and services for companies and institutional clients.
How does XP make money?
XP earns fees from trading, asset management, product distribution, and corporate or institutional services. A key metric is retail take rate, which shows how much revenue XP earns from client assets.
Why are investors worried about XP?
The main worry is that competition is lowering fees. XP's Annualized Retail Take Rate fell to 1.25% in 2025, while Total Net Inflows also slowed.
What is the bull case for XP stock?
The bull case is that XP keeps pulling assets away from traditional banks and uses its scale to protect margins. If fee-based revenue grows, the business could become steadier over time.