Edinburgh fintech Nucleus Financial 'positive' over future as assets rebound to £16 billion

Nucleus Financial Group, the Edinburgh-based fintech, said it was continuing to invest in the business as it revealed that assets under administration had risen above £16 billion over the summer.

Nucleus, which chief executive David 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. Picture: Lisa Ferguson

Gross inflows of £373 million were recorded in the third quarter to the end of September, a slight reduction on the previous quarter (£384m) as a consequence of the pandemic.

Net inflows for the quarter fell by 26.1 per cent, year-on-year, to £82m, but are up by 44.7 per cent year-to-date compared to the same period in 2019.

In its latest trading update, the firm noted that advisers actively using its platform remained broadly flat against the comparable period. Customer numbers were up 4.1 per cent year-on-year.

Despite the ongoing impact of the pandemic on investor sentiment and market growth, assets under administration (AUA) stood at £16.1bn at September 30, up 1.8 per cent on the previous quarter and 2.6 per cent year-on-year.

By comparison, the FTSE All-Share Index fell 3.8 per cent on the last quarter and was down 19.2 per cent year-on-year.

Chief executive David Ferguson said: “Covid-19 looks set to dominate our lives for at least the remainder of the year and is likely to have a continued impact for a time to come.

“In these challenging times, the health and well-being of our staff remain our highest priority. While we have re-opened a portion of the office, within government guidelines, almost all of our people continue to work from home.

“Despite a significant reduction in markets this year… our AUA at the end of Q3 2020 was back to the level we started the year, at £16.1bn.

“Despite a softer Q3 in terms of net inflows, our year-to-date position remains ahead at £515m compared to £356m in 2019, a 44.7 per cent increase on the same period last year. It’s worth noting that in terms of gross inflows, while these dipped in August the figures for September are more positive.”

He added: “Our focus throughout the pandemic has been to ensure we are well set for the months and years to come, concentrating on the things that matter to our business that are within our control.

“This has meant a commitment to continuing to invest in the platform. Q3 has been no exception.

“While the future impact of the Covid-19 crisis remains unknown, there has perhaps never been more of a pressing need for high-quality financial planning, and as such, we remain positive about the long-term future of the sector.”

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 “wrap platform” provider, which floated in 2018, is seen as one of the biggest successes of Scotland’s burgeoning fintech – financial technology – sector.

Last month, Nucleus said it had seen customer numbers top the 100,000 mark after booking resilient first-half results despite investor sentiment being hit by the coronavirus turmoil.

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