Edinburgh fintech Nucleus hails 'milestone' seven-figure takeover of Glasgow's OpenWealth

Nucleus Financial Group, the Edinburgh-based fintech, has unveiled the “milestone” acquisition of a Glasgow business it has partnered with for almost a decade.

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

The seven-figure takeover of OpenWealth will further accelerate the capital firm’s product development and create “new growth opportunities for its people”.

OpenWealth has provided business process outsourcing (BPO) services to Nucleus since 2011, including account servicing and administration.

The 130 or so OpenWealth staff that currently provide services to the business will transfer to Nucleus, taking the combined headcount to about 380 people.

David Ferguson, founder and chief executive of Nucleus, said: “I’m looking forward to welcoming all of our new colleagues into the business.

“The Nucleus/OpenWealth combination has worked well for the better part of a decade and bringing the two together will allow us to focus more than ever on developing our online product and offline service.

“We’ve always believed that the highest service levels are achieved when the online product is so intuitive that the customer hits the button themselves and on the occasions they are unable to do so, that the offline service is exceptional.”

He added: “Today marks the start of a new stage in our journey, a milestone towards us achieving a market-leading position for our customers.

“Improving the quality and flexibility of what we do will be central to that, and I’m excited by the opportunity this affords us in enhancing the overall user experience and helping us to realise our growth ambitions.”

Under the terms of the deal, Nucleus has agreed to acquire the business and assets of OpenWealth as they pertain to Nucleus for a cash payment of £1.5 million.

Completion of the acquisition is expected by the end of the year, following regulatory engagement and subject to the transition of transferring employees.

As part of the agreement, OpenWealth will continue to provide a “restricted” range of services to Nucleus for a period of about 15 months.

News of the takeover comes just over a week after Nucleus said it was continuing to invest in the business as it revealed that assets under administration had risen above £16 billion over the summer.

Gross inflows of £373m 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.

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.

The firm, 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.

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