The focus of most platforms has been to serve the adviser to simplify their administration, but it is no longer enough to appeal to advisers and not the end client, according to Nucleus Financial Group’s business development director, Barry Neilson.
Nucleus, which has circa £12.5 billion in assets under management, regularly analyses its data to ensure that clients using the platform receive a ‘appropriate service’. Founded by financial advisers, with 51 percent of ownership and voting rights, the tech company encourages advisers to review their propositions and ensure they are suitable for various family generations. With many advisers looking after family units, inter-generational planning is part of the client strategy, and “platforms must be able to change what they do so they can link clients and consolidate performance”.
Mr Neilson highlighted Nucleus’s ability to adapt to change. He told thewealthnet: “Culturally we are a tech business, employees have a tech mindset and we are agile. The advisory businesses we serve are increasingly changing their client propositions and doing different things to the other adviser down the road.” With the user base having many different demands, it can be challenging to develop propositions, and Mr Neilson added that “older platforms don’t have the technology or flexibility to do this”.
Of the shifting trends of user requirements, Mr Neilson noted that the need for the integration of technologies with other technologies is crucial, in terms of tech being able to exchange data and allow users to avoid re-keying information. Secondly is the client’s expectation of digital engagement. Mr Neilson said that advisers are now “moving towards a combination of good quality face-to-face time alongside digital support. Clients from every walk of life expect an element of digitalisation which we wouldn’t have seen 10 years ago. An element of the platform’s role is to help empower the advisers to deal more digitally with clients. Clients are having more engagement with how their money is managed digitally.”
In March, thewealthnet reported that Nucleus is to lower its costs for clients with large portfolios, and charges for clients with £500,000 and above was 'significantly' reduced from 1 July 2017. Mr Neilson attributed the price drop to “pricing pressure combined with wanting to give something back to the client”, and added: “As we become more profitable, advisers want the client to benefit from that.” Mr Neilson considered that some businesses that have not been set up primarily as tech firms may be seeing fee rises due to their original business models not necessarily being compatible with new technology.
In order to support the objectives of its own business model, Nucleus turns away half of the firms that approach them, with advisers wishing to use the platform required to meet “certain criteria”. Mr Neilson said: “We have an acute understanding of the type of businesses we work well with.” Nucleus is most interested in “the younger adviser, who are more entrepreneurial, more business-savvy and more focused on the client outcome”. Compared to the average industry adviser age of 56, the average age of a Nucleus adviser is 46, meaning that they are more likely to be “in it for the longer term, better qualified and more market aware, and there are no legacy issues by doing the job in a modern manner”.
The tech company has seen profit increases every month for the past five years. Pre-tax profits increase by 21 percent from 2015, reaching £4.3 million at the end of the financial year ended 31 December 2016. Mr Neilson explained that the rise in profit is “partly down to cost control”, and noted that Nucleus ensure they do not spend money on services which are not required. He concluded: “We can deploy our profits much more effectively because we ask clients what they want. It sounds simple but it is important.”