Edinburgh fintech Nucleus books ‘solid’ summer figures

Nucleus was set up by David Ferguson with the backing of several financial advice firms in 2006. Picture: Lisa Ferguson
Nucleus was set up by David Ferguson with the backing of several financial advice firms in 2006. Picture: Lisa Ferguson
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Nucleus Financial Group, the Edinburgh-based fintech business that floated on the stock market earlier this year, has hailed a solid increase in its key performance measures in the face of “well-referenced market uncertainty”.

Releasing a third-quarter trading update, the firm noted that assets under administration (AUA) had grown to £14.7 billion – a rise of 8.1 per cent since the start of the year and 14 per cent up on a year earlier.

As of the end of September, the number of financial advisers actively using its platform stood at 1,391, up 5.6 per cent since the start of the year and 7.2 per cent over the last 12 months.

Meanwhile, customer numbers have increased by 4.3 per cent since the beginning of the year and grown by 6.4 per cent over the previous 12 months.

Founder and chief executive David Ferguson told investors: “Nucleus has continued to grow with a solid increase in adviser and customer numbers and strong AUA growth, despite the well-referenced market uncertainty that is continuing to impact investor sentiment.

“As a result, Q3 flows were below last year’s all-time high, although still well up on 2016. Alongside the continued growth in assets we are pleased that outflows as a proportion of opening AUA were reduced in the quarter and across the first nine months of 2018 (6 per cent versus 6.6 per cent).

“Of course, it is in exactly these market circumstances that the need for financial advice is at its most pronounced and we believe the soundness of our business model, our financial health and the ongoing investment we are making in our proposition position us well both now and in the future.”

Inflows during the third quarter totalled £563 million, down on the bumper £687m reported a year earlier.

Nucleus, which Ferguson set up with the backing of a number of financial advice firms in 2006, has developed software platforms that enable financial advisers to provide online access to clients for investments across ISAs, pensions and bond accounts.

The firm is seen as one of the biggest successes of Scotland’s fast-developing fintech sector.

Reacting to the latest figures, analysts at brokerage Shore Capital pointed to “good progress in a tough market”.

They noted: “Our current forecast for the level of AUA at 31 December is £14.8bn. On the back of this Q3 update, that figure would have looked conservative three weeks ago, leaving room for upgrades.

“However, given the weak markets so far in October, we leave it unchanged and, consequently, our revenue forecasts are also unchanged. We regard this as a resilient performance in the light of a widely reported slowdown in retail flows.”