So let's go straight to the point here in our opening remarks, as I said, it's more accountability. So what have we promised during the IPO roadshow? First, no short-term guidance, we like to put the lights in the long term considering we have a huge total addressable market to go for. Our purpose is a long-term purpose that it's been 20 years to get us here and it will take more 20 years to probably disrupt the whole financial industry in Brazil. But when we went for the IPO, we got these recommendation that some guidance we should have, especially being a new company for investors and we guide to mid long-term guidance. Revenue, CAGR of 35% plus, and adjusted net margin between 18% and 22%. As you can see in the first nine months of 2020, we have delivered revenue growth of 66% year-over-year reaching BRL6.1 billion. And adjusted net margin of 26.9% with an adjusted net income of BRL1.6 billion. These number in nine months is 44% higher in the entire year of 2019 and with one more quarter to go. We have also expanded our ecosystem through M&A and investments in technology, as we said, during our IPO roadshow as well. When we look at our growth strategies, it is important to understand that everything happens through our tech enabled platform. 100% focused on customer experience. We always say we are a client centric company. And by that, we mean to really do everything on behalf of our clients. That's why, you saw in the video. We took Rico online brokerage fees to zero, and at XP reduced by 75%. That was not a market pressure, nothing like that. We just because of the scale we have, because other products we are adding into our ecosystem anytime we are able to, we are going to give back to our clients that we believe will give back to us and these creates a very powerful ecosystem and win-win situation for the long term. A couple of years ago, we initiated a process of investments in a model that integrates an agility with strategic initiatives, utilizing data analysis for decision making and resulting in greater scalability in the future. We are going to talk about that further down this presentation with Thiago Maffra, because I think that during our previous quarterly results, we have not highlighted as we could, these huge transformation going on in XP platform that I think it's worth showing to investors in the market in general. Also we have started – just started to offer some banking products and services. So when we look at the banking, wholesale bank here, a lot of those products they are able to be offered because of the banking license credit card, for example, cash solutions, FX in a different scale than we used to do, the SMB market, corporate and et cetera. And we are just getting started there. It's more TAM that we are adding to our ecosystem. And finally, when we talk about distribution channels and especially the IFA network, we have decentralized our cash in order to embrace the opportunity the market is offering us. As you all know, the banks – incumbent banks, they are huge agenda of cost reduction. And by that closing branch, it's a must, especially after the pandemic where a lot of the incumbent banks clients had to become more digital and they realized that they don't need as many branch as they have still today. And that pose a great opportunity for the IFA profession in Brazil. And we as leaders in that market, we are investing and accelerating the base of investment in that segment. And you can see that is already generating good results for us. As an example, we had on a monthly basis, nine months, IFA draws – a new IFAs per month of 277. And only in October, we had more than 500 new IFAs coming to our platform. And that happens organically through our existing IFA, not network. And that's the record number ever in our history. So we are very positive about the momentum, not only because of our competitors’ agenda of cost reduction in closing branch, but also because of the low interest rates that we have in Brazil. And we believe that it's time to invest more and we are going to have the benefits of those investments down in the long term. So now moving to our next slide, when we talk about the KPIs and financials, I will go a little bit faster here. Assets under custody you already saw the number 563 billion all-time high in our company. We had a huge net inflow in the third quarter. We had these extraordinary inflows that without these extraordinary inflows, we still have a very healthy base of net inflows on a quarterly basis, 39 billion compared to 36 billion in the first quarter pre-COVID. So again, despite all of these growth, we still have a very low market share compared to incumbents. And we believe that's a process that will continue through the next quarters and years. When we look at active clients, it's worth highlighting here that through our direct channel, XP direct, including Rico, Clear, and XP itself. The growth year-to-date XP direct has been responsible for more than 85% of the growth of the number of clients with a special highlight for Clear brand, but all the brands are growing really well. Now moving to our next slide. The DARTs is the same story we told less more I mean, the numbers have stabilized in a very high plateau of 2.7 million trades per day. And when we look at the market share, in equity retail, we kept our leadership, but not only kept the leadership, but we're able to increase our market share in a very favorable market for newcomers to the stock market in Brazil. And in terms of custody, equity custody, we now by far number one with 28% of market share in equity custody. In our NPS around 70 keeping the highest of the industry so far. Moving forward, here, I would like to highlight that the shift to higher yielding assets. We'd call the equitization process, but it's more than only equitization. We are talking about Brazil that is highly concentrated in fixed income because of the high historical interest rates in our country. These shifts away from fixed income into higher yielding assets, it's a process that will take a long time in our belief. We can see here that the growth of fixed income when we look at 2000 – December 2017 in compared to September 2020, fixed income is the lowest growth 16%, but it's still the highest absolute amount of more than R$2 trillion. When we look at equities, 120%, REITs 127%, alternative 61%, but from a very low base. So I would like to highlight three markets, pension, alternatives, and REITs, because we believe they have a huge potential to grow in the next quarters and years. When we look at REITs, we're talking about a R$145 billion AUM as of September, that's a fraction of the listed REITs market in United States, for example and we were like pioneer in these market. I remember when we were doing an IPO and no institutional investor would invest in a listed REIT fund. But we said, we have to go and educate those institutional investors, because if this market gets liquidity in the secondary trading, it will be another option of investments for portfolio managers in a market where portfolio managers in Brazil don't have that many options because of the under development of the Brazilian capital markets. And now when we look at 2020, a lot of those institutional portfolio managers, they have bought REIT shares in the secondary trading. And we are by far number one in that market. When we look at alternatives, international funds, we have talked a lot about it. We have reached an AUC of R$10 billion out of nothing a couple of years ago. But it's still – it's not a big market compared to the potential specially when we think about diversification of assets allocation for Brazilians. And our platform has more than 60 funds offered and growing. Private equity, same thing, we were the first one to democratize that type of investments for retail qualified investors, adding in a private equity fund of our own asset management. That's raised R$1.3 billion, more than 5,000 retail qualified investors. And now one month ago, we did the same thing for other private equity portfolio manager, EB capital that raising the telecom industry almost 800 million among retail investors, again, with more than 5,000 clients. So we believe we're in beginning of this journey open up, new options of investments for retail investors. And if these movement shifting away from fixed income into higher yielding assets keeps going we have a long journey ahead of us. Just talk a little bit about the pension industry. It's worth highlighting that back in 2019, we started our own insurance company. So we founded a little bit more than one year ago, and it's a brand new company. It has 10 billion approximately of AUC as of September, which is from zero to 10 billion in a little bit more than one year. It's a great growth and achievement, especially when we look at the market share of net inflows. So year-to-date, our insurance company is able to get 20% of net inflows in terms of market share. If we look at the transfer market, because it's like 401K, we have two types, you have the investments that you made, and then you have the transfer of custody from one insurance company to another that you can do. So is as if you can take your 401K from one platform to the other. And that's a market of some zero which some players gain others lose. In that transfer market, year-to-date, our insurance company has gain 55% of the market share. So for every R$100 that leave one platform, R$55 goes to our insurance company. But we still have nothing in terms of total market share. That's a trillion market. We have 1%. The largest player has 30% of total assets under custody in that market. It's a market that has a different base of growth compared to investments. But it's a very strategic markets that we intend to keep growing in the following years as well. So it's just to highlight new markets that we just entered and we expect to keep growing in the future. Now going to the financials, as you saw in our release, record total gross revenue R$2.2 billion in the third quarter, representing a 55% growth year-over-year, very strong performance in retail. Retail representing more than three fourths of our total revenue. And as you can see in the next slide, the retail revenue year-over-year represented 80% drop. The main drivers, equities and features and financial products, which is kind of linked to the equity and futures market itself and also fixed income. When we look at our take rate in the third quarter, last 12 months, 1.2, pretty much stable with what we had in the third quarter last year. This also shows a resilience of our business model and our revenue stream. As we keep adding new products we are going to have different mix from quarter-to-quarter. It's hard to predict and the take rates can vary also from quarter-to-quarter. But at the end of the day, as the ecosystem keeps growing and adding products we expect these revenue grow to be even more resilient than in the past. So moving to the next slide, I'm splitting up so we can go for Maffra in Q&A. Institutional revenue, a growth of 38%. That's a more mature market. We keep adding new institutional investors in our platform as we keep fueling the independent asset management industry. But he's a more mature market. So we should expect a lower growth compared to the retail markets. And issuer services revenue, we had a growth of 18% year-over-year, quarter-over-quarter was a huge growth because on the second quarter this year, we had the pandemic and the market window was closed. But I would like to highlight our growth in the equity capital markets business. We participated in 14 deals this quarter compared to four deals one year ago. And we keep growing our representativeness in the equity business as we did in the fixed income business in the past. In the REITs, as I said before, we were the pioneers in that markets and with the market window open, a lot of those funds looking for opportunities to improve their portfolio they are already listed with liquidity. So a lot of follow-ons going to the market, which is very healthy to develop the real estate business in Brazil. On to the cost and structured the COGS and the SG&A. As we look at our COGS, there is a slight margin compression compared to one year ago due to product mix and also the investments in the IFA network I mentioned in the opening remarks. When we look at the operating expenses, excluding the share based compensation, we can see the operating leverage in our platform going from 35.5% in the third quarter last year, as a percentage of revenues to 31.9% as of third quarter this year. This year we had other operating incomes that reduces the SG&A impacting positive the SG&A because of the incentives that we get on a timely basis from B3 and also some partners incentives to have access to our platform the mainly one being Visa. So moving to the adjusted net margin, our adjusted net income a record one close to the second quarter, which was a very strong quarter as well, R$570 million of adjusted net income without the trading that we had in the first quarter, again, showing the resilience of our business model. In the adjusted net margin at a very strong base, 27.1% in the third quarter, which higher than our top range of long-term guidance of 22%. Now then move one more. Here, we showed in the video the ESG, the awards that we had, the ESG just one highlight a year. We did this financial education journey for women. It's basically connecting women into our education platform to empower women to get education and succeed whatever they are aiming to, again, linking to our D&A of education since the beginning of our company. Also in terms of the awards, we are very honored, especially the North American customer centricity awards 2020 in the category of best measurement in customer experience. That's a really honor for us to get these awards and that's the reason for our existence, our clients. And now moving forward to, before I pass to Thiago Maffra, the reason we brought here, these growth strategies through technology is as I said in the beginning, I think that we have a revolution in our company. We have had a revolution in our company in the last couple of years that I don't know if it's a really clear for all investors. So I think it's worthwhile explaining a little bit more what we have been doing, why we are doing this, the huge total addressable markets that we have in the financial industry, Guilherme mentioned in his letter to shareholders that in the last 12 months, our gross revenue was R$8 billion, compared to the total gross revenue of 2018, less than two years ago of R$3.2 billion, almost 150% drove in less than two years in the total gross revenue. But when we think about the financial, total addressable market in terms of revenue pool, we are talking probably more than R$500 billion. So we have a teeny market share. We are not present in all verticals of the system, but if we succeed to do everything through our tech enabled platform with a big dream of having a marginal cost tending to zero, as we scale our business model, I think we are going to be in the right direction. So Maffra, please now is with you. And it would be nice for you to present yourself. I don't know if all investors know you already. So it would be great if you talk a little bit about yourself.

Okay. Thank you, Bruno. Hello everyone. Good evening. As Bruno mentioned, I would like to briefly introduce myself as is the first time I speaking to you guys. You see that I have a different background from other CTOs. I have a Bachelor in Business Administration from Insper; and MBA from Columbia University. And I am a CFA chart holder. I have started my career as a trader in hedge fund, doing high-frequency trading. And I joined XP six years ago. At XP, I have worked in different business segments from equity retail, building cryptocurrency trading platform few years ago. And 2.5 years ago, Guilherme invited me to lead the digital transformation of the company and to lead the technology team. So as you can see on the slide, we start huge transformation of the company at the beginning of 2018. We decided it was time to change or organizational model and our mindset from a financial organization to a technology company. We started by reorganizing our technology into squads with multidisciplinary teams, composed of business and technology people working together side by side, changing from our waterfall model to agile methodology. As you could see, I myself, I am a business guy. And what we have been doing here is to really put technology and business together. You can see that we have grown from less than 300 people to two to two and a half years ago to about a 1,000 people today and from 10 squads to 81 squads today. We have hired people with very different skillsets from like our traditional employees from companies like Google, Mercado Libre, Nubank, Magalu, PagSeguro for positions in designing, product, data and engineering. However, we expect lower investment growth rates for the next years, because we are capturing gains of scale. We expect to hire about 250 people over the next couple of years. Of course here I'm considering only the business that are already in the pipeline, like digital account, credit cards, margin low and credit, as Bruno mentioned before. Can you move to the next slide? So we spent the last almost three years building a tech-enabled platform that allow us to provide financial and non-financial services to our clients. Through technology, we are able to access different business segments and expand our TAM with very low marginal costs. By leveraging our tech platform, we have been able to expand to other segments, such as educations, payments, and credit in last years. Most of these new business lines is too early stage, but we expect them to mature in the next couple of years. Our goal for the next years, it should be recognized as the best technology company in the world and use our tech platform to disrupt other financial segments, such as we did with investments. Can you move on there? This slide shows only a few numbers, choosable straight one case. These numbers are like from our XP app. And when we have this multi-disciplinary squads working together, they really make incredible things. As you can see our NPS for our app is 75. They ranging from App Store, it was 4.8. When I saw – I saw in the video 4.7, but it's changed every day, but it's the highest financial segment in the financial segment in Brazil. And our customer engagement is growing month after month. As you can see on the frequency that people access our app. We are creating a powerful financial ecosystem to our customers in which we have been adding more service and products every month. Can you move to the next? And you may still ask why we have been doing such a huge digital transformation in the company. First by beauty and tech enabled platform, we are able to scale our operation with very low marginal costs. Second, before tech ecosystem, we are able to get a lot of data and use them to improve our products and businesses even further. Third, faster time to market. We can leverage our platform to launch new products up to four times faster than other companies. Fourth, it's all about customer experience as Bruno mentioned. In the long run, our product is going to be the experience we provide. And that's why we have been investing in that customer centric approach with design and data working together to improve our customer experience. You all can be sure we are ready for the future. Thank you.

Great, Maffra. Thank you. Thank you very much. And before we go to the Q&A, I'd like just to add, as you can see our – I mean, I've been in XP since 2012. The profile of our employees has changed a lot as Maffra explained. What it hasn't changed is our purpose, our culture, and our driver to go after what we believe to be the right thing side-by-side with the clients. So that's something that we started the company, Guilherme started this company in 2001, believing that by doing the right thing for the clients, in being side-by-side with the client without shortcuts and hard work, a lot of hard work and a big dream we would get there. We haven't gotten anywhere yet. I mean, we have achieved a lot, but when we look at the size of the opportunity in the total addressable market of the whole financial industry and beyond the financial industry, because we have known financial service and products as well. We think it's a very long journey ahead of us. The IPO, it was important step in that journey. And now, I mean we are here with the accountability one year, almost one year after the IPO being a listed company. Thank you all the support that we have gotten from all investors that trusted in our business model and in ourselves. So thank you very much and now we open for Q&A. I don't know how it's going to work Lazar, you tell me, it's going to be open or somebody who brings the hands. A - Carlos Lazar: Thank you, Bruno. Thank you, Maffra. So I'd like to ask all the participants that want to raise any questions to raise their hand, and I'm going to allow them to make the question here. I saw some questions already was sent to the Q&A area as well. But please feel free also to raise their hand here, instead of myself making the questions to all contributors. So this time we're going to be doing something different here. So the first question comes from Tito Labarta. [Goldman Sachs] Please Tito?

Hey guys. Good evening. Can you hear me okay?

Yes. Perfect.

Hi, Tito.

Okay, perfect. Thank you everyone for the presentation. Very helpful. I guess my question looking at the growth that you're talking about the scalability, the mix in assets can improve and just going back to the initial sort of guidance that you gave at the IPO the 18% to 22% net margin. Is that still realistic and I mean, just given everything that you're saying, I mean, everything's going well. And I know, it's a long-term guidance and tax rate can go up, and there's a lot of moving parts. But either what would it take for that to actually become a reality or is it really more upside and like that results that we're seeing today are really maybe more realistic of the growth potential that you're describing.

Okay. Now, I mean, Tito, I think, there is more upside, okay. We haven't revised the guidance yet, because right now we are in the middle of the process of our budget for next year and our review of long-term numbers internally. So as we finish that we are going to decide what to do with that long-term guidance. But when we gave that long-term guidance, we hadn't factored in totally the IPO structure that helped to reduce the effective tax rate at the end of the day. But most importantly, what we had in mind is exactly what Maffra explained here today. We changed the company and we do everything through technology. And to have, I mean, our investment in technology. If you look at our numbers, in terms of people, we are hiring more than 1,000 people this year, most of them in technology, in your verticals, we entered, we moved from no squads to 81 squads nowadays, and all of that it's expense that we have in our financials. So basically our investments is not capitalized. Guilherme also talked about that in his letter. Most of it goes directly into our financials. But at the end of the day, we were talking about investments because think about it, credit card business for example. We have a lot of people working in the squads, everything through technology, with design, connected business people together that number of people growing in the future, probably some of those people will do other things in the company because when the business matures, that's why technology is for rights to be able to have the scale and to get a lower decreasing marginal costs tending to zero in the best scenario. The reason we gave that 18% to 22% in the long term is that our vision during the IPO was look, we are just at the beginning. There is a huge total addressable market. There are a lot of markets we are not in yet. And we probably will start new businesses in our platform. And then it's hard to predict, it's hard to forecast how much we are going to have to invest and go to expenses. And in the short term pressure, our SG&A and our margins. So that's why we gave that guidance. Having said that, we have not yet revised. We want to wait at least the end of this year, as I said, to revise the whole long-term financials of our company. But probably there is room for upside there.

Great. Thanks Bruno. That's very helpful. If I could just have one follow up on that. So in terms of the margins, I guess, do you worry about having to invest more just given the growth potential, right? I mean, it really the focus here should be on that revenue growth and even with the asset mix, maybe potentially benefiting your yield a little bit, right. I think that the focus will be on the growth and you could suffer some margin pressure in the short term, but given the growth potential, you have, that's really where the focus is. Is that fair?

That's correct. When we decided to lease the company last year, we knew we probably would get all kind of investors. The markets, I mean, it's – when you become a listed company, there is honors and bonus. The bonus is that you can connect with great investors globally and they can help you to become more intelligent and have success in your business. The honors is for those that allow the short-term focus to drive the company. That's not us. We think as owners as we are. And we have to think about the perpetuity of this company. That's all we think about it. So if we have to invest in the short-term to, have a, is like compression of margin. But we believe it's the – on the benefits of the long term, we are going to do it. Look what we did with the online brokerage fees. We didn't have to, some investors ask us, but if there was no market pressure, why haven't done that, because we thought it was the right thing to do. If we are going to do it, you better do sooner than later. And then have the clients recognize the relationship for the long-term. That's going to turn into benefits for us much more than what we gave up in terms of revenues in the short term. We did the same thing with Clear back in 2018, that's the kind of mindset that we have. So you are 100% rights in what you just mentioned.

Great. Thanks, Bruno. Thank you, guys. Appreciate it.

Thank you.

Thank you, Tito.

Next question comes from Thomas Peredo. [ph]

Hi, everyone. Good night. Good evening. And very quickly on my side, we noticed that prepaid expenses jump at almost 1 billion this quarter, and just wanted to have a sense of how this – how much is there still to come from the – I believe this is connected to the first edition of IFAs. How much is this still more to come for next quarter? And how should we see these impacting COGS going forward in the next two quarters? How is – they are counting of this prepaid expenses through time? If you could give us a bit more color on that? Thanks.

Sure, Thomas. Thank you. So we cannot give numbers for the following quarters. How much is yet to come. That number has to do mostly with the investment in the IFA network. As I mentioned at the beginning of the presentation, we believe we have unique condition in terms of different variables that justify that kind of investments. In terms of how we recognize that in our P&L's in our financials is based on the contracts that we have with that incentive attached with that incentive. So most of it we're talking about 10 years. If we take 1 billion, 10 years are going to be 100 million per year. So that's basically…

Okay, perfect. Thank you very much.

Next question comes from Christian Bolu. [Autonomous Research]

Hey, good morning. Good morning. I’d say, good afternoon or good evening.

How are you, Christian? Good morning.

I'm fine. I'm fine. It's been a long day here.

Okay.

So I apologies for asking a boring accounting question, because I do think your operational performance was pretty strong. But I kind of like to get some more call on the balance sheet growth. I mean, it's up 126% year-over-year, I think almost 50% quarter-over-quarter to R$88 billion. I don't know, what drove that? Like, how does that flow to the P&L? I know we've had this conversation in the past. But it seems to be a pretty significant move in the quarter. And maybe the bigger question of a time really is like, is there a – I mean, what is the maximum size you can grow your balance sheet or you'd be comfortable to grow in the balance sheet. And at some point is the ability to go to balance, you'd have some constraint on the actual business.

No. Great. Great. Yes, the balance sheets grew a lot in this quarter, but most of the growth it's based on government bonds on the – in repos, on the asset and liability side. So that's a kind of a tricky, because it seems if you don't understand the balance sheets, you can look at it and say, okay, you're leveraging the company that’s not it, because it’s like arbitrage, most of it is arbitrage opportunity in the fixed income business related to government bonds. If you go into our asset part of the balance sheet, you’re going to see that most of the numbers is related to government bonds. And then the remuneration, it’s not a huge one, because we’re talking about a very liquid market. But we have strong presence in that market and there is this arbitrage in government bonds and it’s something that we do. So from quarter-to-quarter, you can see a movement that in the picture of the third quarter, you had debt balance sheet with R$88 billion in total if I’m not mistaking you. And then you can gather a reduction of R$10 billion to the next month, for example. So it doesn’t mean that we are leveraging the company or taking more risk. That’s important to say. The measure that we look in terms of risk is basically the far and the stress test. For example, we take our net worth of the group, XP Inc. in total, approximately a little bit more than R$8.5 billion and the limit for our VAR of one day with 95% of confidence it’s a 50 basis points. As of September we had 22 basis points. And the stress test that in our numbers the maximum amount is less than R$200 million. In the worst case scenario, we had a maximum of R$50 million as of being able to offset to the number. So we had all the positions that we have, we looked at the whole thing on a consolidated basis and the growth of the balance sheets is tricky because you're going to see in some quarters down the road, the balance sheet shrinking, and the other way around. It doesn't mean that we are paying this or that. In terms of that we had excluding the bank approximately R$1.2 billion only in financial debts, two bonds issued in the Brazilian markets and one that with IFC basically, okay. And one of the bonds matured in September and we just paid off R$400 million. So we basically reduced our gross financial debt on that perspective. Then you have the bank, the banking business, you're going to see in our liability side, the deposits and the structure notes, financing, the collateralized loan portfolio on the asset part of the bank. But that, when we look at the whole group is not that much, but is grown our collateralized loan portfolios above close to R$1.5 billion already.

Great. Okay, thank you. Maybe just a follow-up question to Tiago this time if your taking questions. Thanks for the presentation. Maybe just in very simple terms, how do you – how would you describe the competitive advantage in technology that XP has relative to the traditional banks and even the emerging fintechs, right, like what is it, why is it sustainable over time? And then maybe the second part of the question is if it was like Bruno, is tightening the purse strings here on costs for you, so you are going to have to be more disciplined next year. But are there projects you would like to work on going forward or if resources weren't a constraint, are there sort of big projects you would like to work on with the team and kind of, what would they be maybe over the next couple of years?

Okay. Let me take the first part.

Yes, yes Maffra you can explain.

I will take the first part, then you take the second part. Yes, so Christian, I would say that as you mentioned, how we compare, like to the incumbents like the big banks in Brazil. We have a completely new technology environment, so we don't have legacy systems, we don't have any mainframe here. So we are like 80% to 90% cloud-based, we use good cutting-edge technologies. So all these technology vendors make us to have a much faster time to market and a much better product, because to give you an example, as Bruno mentioned, we launched our credit card a few months ago is still on beta, but it's on the Street. It took us six months from the conception, like to releasing the product. And that's how the tech platform enables us like to have an advantage. And besides that, the quality of the product that we release is much better. Like if you look some of the banks, you cannot like – not even like reset your like password for the credit card, you have to go like to the branch physically. And that's insane like in a digital world. So that's how we differentiate ourselves through technology.

Yes. And going to your second question Christian about the opportunity next year. First, let me start saying that in terms of cost conscious, I mean, we are also fanatic in terms of costs. So we are investing a lot, we believe we should do it. There is a huge opportunity ahead of us, we got to think in the long-term, as I said. But we are also cost fanatics here in the company. And every everything that we have as an expense should be just fine. We have a short need in long-term view. And in terms of the opportunities, I think, the main opportunity that we have is with our existing clients nowadays. We keep saying about adding more products in banking services so we can cut completely the link of our clients with the banks. That's probably going to take a while because it's a process, right. And the banks, the incumbent banks, they are good in the banking service business. It's not that the technology, it's not good, and so forth. But we believe that our mindset, the way the company is structured, as Mafra explained through technology and business people, altogether designers, everything focused on the end-to-end journey of the client can make this process a lot smoother and better for the clients. And when we think about the existing clients using data analytics that we are accelerating, but we still have a long way to go as well, we can do much more in terms of the experience, the product offer for the client, the next product to buy, the better assets allocation, we have a lot of initiatives in that sounds we have the XPG News, and I cannot enter in more details here because those are strategic products that we have in our company. And I'm pretty sure if not all, most of our – of the competitors they are listening to us here. So I cannot answer in detail. But existing clients, they offer the best opportunity if we are able to serve them better in everything, in terms of experience, products, and so forth. We can basically double our assets under custody if we get close to 100% of share of wallet of our clients. So that's an in-house opportunity.

Thank you, Christian. So let's go to the next question Marcelo Telles please.

Hi, good evening, everyone. Thanks for…

Sorry. Marcelo, please join again raise the hand again.

You muted myself.

No well go ahead Marcelo. Thank you.

All right. Can you hear me Carlos?

Yes, it’s perfect.

All right. Okay, great. Sorry my baby is playing in the background. So I apologize if you're hear.

It’s normal, it’s new life. Relax Marcelo.

So I have two questions here. I was wondering if you could, regarding the retention agreements with the IFS that you engaged in the quarter, I was wondering if you could tell us what was the amount of AUC of those IFS that you engage in this type of agreements that's first question. And the second question if you can comment a bit on the expectations regarding the public consultation on owner internalization. I know this being a hot topic, I think, your manifestation, I think, it was very clear right, where you guys stand. So if you can comment a bit how – what you think the potential outcome would be or you think it makes sense in your view and how meaningful that could be in terms of earnings for you? Thank you.

Okay. Thank you, Marcelo. In terms of IFA, I cannot say the exact number of AUC related to the long-term incentives that we have done so far, but I can tell you that it's a lot, okay. And again, I mean, we are talking about investments in network that has a huge potential for growth as the October number of new IFS come in to the platform if not all almost all of them through our existing IFA network of more than 500 new IFS in one single month. So that's how we see this profession. Always thinking about not only the number of existing IFS, this number was basically less than 500 when we started the business. So now it’s close to what 10,000 getting, I mean, you have to discount those IFS that have the certificate, but do not exercise the profession. But at the end of the day, it's a profession that has grown a lot. And the reason for that is that you have to add to the IFA world, the bank managers as well. And there are several of bank managers. And as I said the market is a huge opportunity because a lot of branches are going to be closed. Good people spread all over Brazil that have this potential to become an entrepreneur, can have a chance and do it through our platform in one of our existing offices. So your second question, I'm sorry I forgot, it was about externalization.

Yes.

Yes, I mean it's something that I believe it makes sense in the United States, for example, I'm here in United States here you have that kind of competition with broker dealers being able to internalize orders, and so forth. But I don't know if and when it's going to happen. I think that probably before that, I know there is a discussion going on, but probably I'm not sure before that we can have the facilitation for athletes. We only have four mini contracts, we already have the experience that it's a good thing for retail clients, they benefit from it liquidity, and so forth in the markets and it's working really well. So why not extend that for equities, liquid equities, for sure. But yes, internalization is on the roadmap of the regulator as well. So we'll see. And I don't have a number to give right away in terms of the potential revenue that we can have if that internalization idea moves on.

Thanks, Bruno. If you allow me to just one follow-up question regarding the client retention in terms of the IFS that have left, right. The XP platform can you comment a bit, what has been the – your ability to retain those clients, if this is better or worse than you're expecting? Thank you.

Yes, sure I can. Further down the road, we can update that press release that we shamed the past considering, IFA offs, number one, two and three. But the picture, it hasn't changed on average. Of course, you have office that have migrated less than 10% and others that have migrated more than 10%. But I would say the worst case scenario is around 25%, worst case scenario, worst case. Because what we do when something like that happens, it will happen probably in the future, because remember we built this ecosystem. We were working on investing in the IFA profession for 17 years by our self. Then when our deal with Itaú became public in 2017 other players realized that the business model was the right one and start to invest and it's a natural thing to look at XP and the IFA network, they have built and tried to get some of the IFS. But again, the new IFS phase coming to the markets are many, many, new IFS, and I believe this profession, as I said, will keep growing. So in terms of the numbers of those that have left that's it, it's nothing really different than what we have already shared with the market. And when something like that happens, what we do, we just distribute, the client to be served from somebody for somebody else either internal advisor or another IFA from a different office, the client has to be the priority. The client cannot – it's when an IFA leaves the platform it's not a good experience for the client at the end of the day. So we got to think about the clients and that's what we do right away. That's why the retention rate is so high.

Very clear, Bruno, thanks a lot. I appreciate it. Thanks Carlos.

Thank you Marcello. Thank you. Next question comes from Mario Pierry. Please Mario.

Hi there. Thank you for taking my question. I have two questions as well. Bruno, you mentioned that you’re seeing faster growth for clear Rico clients, can you share with us what percentage of the growth then is coming from this two type of clients? And what is the average balance from these accounts? And how could this impact your ability to cross sell other products in the future? You mentioned on your remarks, right that you – that the opportunity is to monetize on the existing clients. But I was wondering what is your ability to monetize on a Rico, versus a Clear, versus a XP account? And then I'll ask my second question.

All right perfect Mario. Thank you. Yes, you were right when you think that these type of clients on average, they have a lower ticket and it shouldn't be like that right? Because for example, the IFA network, it has to go to justify itself after a higher ticket client. And the number, as I said, including Rico, Clear, and XP Direct, B2C, as a total they were responsible year-to-date of more than 85% of the growth in number of clients, not in assets under custody, okay. In number of clients. And the way we monetize those types of clients, I mean, every client said a different equation, and that's the beauty of having this tech-enabled platform, because the tech-enabled platform if we turn our marginal cost to zero that's the goal. In the long-term we are able to add those clients without having the burden of increasing too much the cost to serve that client it's 100% digitally. I think I mentioned about the clear example as one of the achievements. We increased a lot, the clear clients in our year-to-date here, basically because of these equitization process. And it's linked to the number of new individuals in B3 as well. And we have not increased the costs to serve that client. 100% digital, and we increased the volume, a lot, and the stability of the platform has improved through all time with the investments we have made. So the clear clients are different profile of clients because that's basically for traders, right. The Rico clients are different profile and XP a little bit different as well. And I think the challenge here Mario is exactly to keep adding services and products in our platform and even non-financial products like subscription, courses, and so forth that can monetize and help that client to involve in terms of investments in the journey. Remember that we now are looking the client end-to-end the whole journey is what matters. And for sure data and technology is going to help us a lot to have a better path side-by-side with the clients. So that's what I mean, we've been doing different types of clients, different type of products, service experience at a point that we reach individualized experience for each client. That's the goal in the future.

Okay. Now that's clear. My second question is related when you mention that you reduced some of the trading fees for equities, because you wanted to, there was no pressure to do so also, but when we look right, you have to have this retention costs for IFS. So how do you describe the competitive environments, right? We're seeing a lot of consolidation, we're seeing some of not only competition from the incumbent banks, but new players. How would you describe this? Is this as competitive as you have seen that you've seen any easing from your competitors?

Look, first, we didn't have to, okay. We wanted to. We could just ask the IFA to migrate to another platform in fight for declines, as we did with some of the IFS. So it’s not that we had to. We wanted to, of course, because of the competition as well, but also we understand it’s the right thing to do considering the momentum we are living right now, in terms of the opportunities that these investment pulls to the whole IFA network as well. The thing is that before we were not able to make those long-term investments because of restrictions we have, we had and we still have. But just matching a competitor proposal, we can do it. And we think is the right thing. Of course we know all the numbers and some of them we did not do. So that's one important thing to mention. In terms of the competition Mario, yes, it's, I mean, the investments we share lot of news, right. But we got to think about the profile of the client. We still look at the main competitors being the incumbent banks. That's where our competition really is because incumbent banks, if you look at what they have, they have the most variable asset, which is the client. The clients, is where everything happens and they already have the clients, right. So we need to convince the clients to migrate to our platform. The clients that are here, we need to convince, look, experiment the platform and as you can see in our cohort’s charts as they, the experiment, the platform, the engagement increases over time, and then they bring more money. Great. Now we have to accelerate that and bring more new clients into our platform that's the game. That's what we've been doing. Other competitors that do not have what the banks have, which is the clients, it's a different profile of clients or different competition. I think the real competition is with incumbent banks. And if you look at everything that happened in our numbers and in our market share retail, for example, with the competition in terms fine. And I always say, look, the competitive landscape is going to be intense for the next years, because there is a trend in terms of investments in Brazil that it's a separate growth trend. That's the way we see this shift away from fixed income, into higher yielding products it's going to happen. And people are trying to accelerate. But at the end of the day when we look at the numbers of market share that we have, for example, I gave the equity retail market share, we started the year, we all see above 50% market share, we ended October with inequities with 58% market share, we increased our market share in this competitive environment that you just mentioned, and it is true. So competition is good. Competition is good for the client. It's good for the customer. We have to be better. We have to have better prices. We have to have better services and that's our life. So that's it.

Okay. if I can follow-up here, so it's kind of related question, as you mentioned so much competition from the incumbent banks we had Itaú announce recently, right that they are planning on spinning off their stake that they have on XP. What do you think that can change in terms of your relationship with the bank? And how could it impact your operations? Thank you.

Okay. Yes, I saw the announcement and I listened to part of the earnings call led by Candido Bracher. Yes, first, I mean what I can say it's, I mean, it's important to highlight as we have always said that Itaú’s deal announced in 2017 and executed in 2018 was an important move for XP’s long-term value creation. We understood at that time was the best move that we could do. And Itaú gave us a credibility an important credibility stamp at that time, our main competitor recognizing the business model, we have built through our lifetime, very important. And I was going to do correctly explaining in his call with the market last week, the original deal had the possibility of Itaú acquiring control of XPO at some point down the road. This deal has been modified by Brazilian Central Bank and Itaú cannot buy XP’s control, neither do we want to sell it. And the adversity studies and the reward announced by Itaú, in my view, it seems that a smart move to unlock value for Itaú’s shareholders. But at the end of the day, the controlling shareholders of Itaú, they will keep control of these large stake at XP Inc. So from that perspective really Mario I don't think anything has changed. So my view, nothing changed in that perspective. But now if this reorg comes together, with an improvement in XP’s corporate governance it can be very positive for our company in the long-term. I believe in that. When central bank changed the deal back in 2018 to approve the deal, it didn't change the governance of our shareholders’ agreement with Itaú. For example, Itaú has super voting rideshares usually designed only for controlling shareholders, right? They also have some veto rights. They have access to confidential information on a monthly basis that our shareholder agreements – by our shareholder agreements, we have to send to Itaú and they also have the right to indicate Board members where we discuss the strategic topics for XP, and for these competitive landscape we’re discussing here. So most rights that were given to Itaú back in 2017 nowadays they conflict with the best interest of XP Inc. – they can also conflict with this fair competitive environment. That I believe central bank is going after. And they also go against the best corporate governance standards. We'd like to have a, better corporate governance standards in the XP Inc. on behalf of XP Inc., which is our lives. So if this reorganization that Itaú announced intention to do, as I understand is not done yet, it's an intention to do. If it comes along with this improvement in the corporate governance of XP Inc. and we believe it's a very good moment to revise all these together in the best interest of the company and the competitive landscape in Brazil can be very positive for our company in the long run. That's what I think about it. But further than that, I mean, nothing changed.

Thank you very much. Thank you.

Lazar you are on mute.

I think you are on mute. I saw myself dropped off.

My self I’m on mute. Domingos please next question.

Thank you Lazar. So Bruno, thank you for the opportunity. And I have a quick, I guess, a little bit of an accounting question. So I really appreciate this balance sheet you guys put, which are just the assets and the liabilities that you obviously have effects, leveraging effects of repos and others. And is that just a cash flow as you present, basically came from R$8.9 billion to R$7.8 billion, let’s say about R$7.9 billion about a R$1 billion cash burn in the quarter. And my understanding is that this adjustment in cash, this way you present this cash automatically adjusts for a couple of the items you mentioned in the net cash flow used for operating activities. In example, if you'll get cash and you invest monitory funds, like you mentioned in here or other financial assets, you would automatically adjust, you have more passes to have more than of liabilities and in fact, we'll be close to net zero. Couple of them. And then you mentioned here growth of our Omni channel distribution at work through IFS, which I believe probably had some impact in this cash outflow. So my question to you is out of that R$1 billion that we've seen there, how much was CapEx, how much was other things? And how does that transfer to your balance sheet, other items? Does it go through accounts payable to everything including IFS and go through to property, like how exactly do you spend a R$1 billion in a quarter basically?

Okay. Yes, first, I mean, the reason to have of these stable domain is to explain a little bit about our balance sheet, because all the assets and liabilities we work a lot in the financial industry it's different than an industrial company or the other sector to understand the cash flow of the business. So here's is more trying to net all the assets that we have with the liabilities that is not our money and try to see what is the adjusted gross financial assets. In this quarter specifically, we introduced the bank and the bank changed a little bit, this equation and can be misleading, because if you look at the asset part, you're going to see a R$1.4 billion of loan operations. That's the collateralized loan basically that we are ramping in the bank. If you look at the liability part, you're going to see deposits and structured operating certificates, the COEs, that with the bank now we can issue through the bank, our own structured operating certificates. And that together at R$42.7 billion in the liability part. And that explains a little bit the reduction of the adjusted gross financial assets. But going to your question about the R$1 billion, yes the R$1 billion is capitalized because the investment in the IFA network, and you are going to see that as I explained through the next quarters in cards as all the expenses with IFS goes to amortized through the time of the long-term contracts that we have with them, okay. More than that we also had a reduction in the cash that it doesn't appear in the liability part here because we paid off our debenture, our bonds issued in 2018. And as I said, we decided not to roll over. So together with interests, it's a R$432 million in the quarter. Other than that, we had the investments in the fintechs we acquired. Also the deal with the ex-bankers from Credit Suisse and that's the investments we are doing as well. And there was a cash disbursement there. So it's basically investments in the business and new business fintechs and the deal with the high net worth segments. IFS bonds being paid off in the cash generation of the business itself.

Very detailed Bruno. Just one very small follow-up. Are any of these contingent on the specific goals and metrics, or all those a 100% expect, like capitalized is going to be depreciated no matter what?

No, there is parts contingent on it – there is an earn out in the balance.

In the format?

Yes, there is continuing to performance that I hope it's amortized through all the time, and then we paid that. But the businesses they have to perform for us to pay, but I hope we do.

Thank you very much.

Thank you.

Thank you, Bruno. Well, we did receive also some questions here through the communities. So I'd like to provide you one question from Jorge Kuri Bruno. Could you please provide how inflows you see in revenue are trending so far in the fourth quarter?

You see net inflows…

Take rates.

Take rates.

Yes. Take rates I mean it's going well excluding the extraordinary in the third quarter. So the pace of net inflows it's going well. AFC, we have a large portion of our AFC inequities not only because of the profile of the investors we have in our platform, but as you saw during the presentation, the equity custody in retail, we are by far, we have more than 10 percentage points, 100 basis points of leadership compared to the next competitor. That one year, one year and a half ago, we were the second one, not the first one in retail equity custody in the market. So the growth has been really exponential there. And because of this equity custody, of course, there is a fluctuation of the AFC, depending on what happens with the equity prices. But having said that all, I mean, it's business as usual, okay. So things are going well. In terms of net new money, in terms of AFC and take rates, I would guess stable. Okay. It's because depends on the fluctuation of the denominator it's hard to predict. But as what I can tell you, it's stable.

Okay. Next couple of questions here from Neha. How should we think about the evolution of banking services over the next two to three years? How we will XP’s product suit look like? And in terms of M&A, – are there any specific business areas that you would make sense for XP?

Okay. The banking, service, and products we are we are developing all of them. It's a continued process. So the collateralized loan is something that we have invested and we still have more to go. They are marginal low on another the issuance of structured notes in the link with the secondary market trading it's also important. Derivatives with institutional clients is something that also we can sure increase the revenue base there. FX another one, either corporate clients or retail clients. And in the credit card, it's on better tests increasing every day, the number of clients there. And the digital bank account, it's going to be the next phase together with payments. So I think that by beginning of next year, first semester, we are going to have the whole shoot of banking service products and the improvements it's going to be on a continuous basis as it is in investments and all days. It's not because we are leaders in as independent platform in investments that we rely on that since and we do not work hard to get better, because we always have how get better. So with the banking service product it’s going to be the same kind of journey I had. The other question Lazar, I don't know.

About M&A what would make sense.

On our M&A we are always looking for M&A opportunity. So yes, we do have a seminar pipeline. It doesn't mean that we're going to close any of them, but I will not get into specific details about what compliments our ecosystem and what we are actually looking at right now. But we are always looking at opportunities and working in a very healthy pipeline, I would say.

Well, that concludes, I think the Q&A Session. Thank you for everybody participating in this. It's one hour and 30 minutes call. Bruno just your final comments. Thank you.

My final comment is to thank you all the investors that have believed in us so far. I know it's very short term, but we are getting close to one year of IPO. It feels great to be able to deliver a lot more than what we said in the long term. I know it's only a short term horizon here, but it feels great, especially considering the tough environment that we face this year with this pandemic that nobody saw it coming for sure. I hope every quarter, and as the time goes by the investors and the analysts, they realize what is the – what we believe to be the real competitive advantage that we have in our business, which is our culture, our people. We talk a lot about that. We believe in that I think the pandemic demonstrated that for ourselves, at least the way we were able to adapt and overcome the challenges in the way that the company as a whole, did the impossible become possible. And I hope you enjoyed knowing a little bit more about an important partner that we have a leader in our company, Thiago Maffra, our CTO, and hopefully you are going to be able to meet so you don't get bored about listening only from myself here, other players and partners of our company. And we are altogether in this long journey. And thank you very much for your time. Thank you.

Thank you. Thank you, all.