Edinburgh fintech Nucleus posts market-beating gain in assets

Nucleus Financial Group, the Edinburgh-based fintech business, has reported a market-beating performance over the past quarter but warned that outflows of cash remain “higher than normal”.

Assets under administration (AUA) rose 6.8 per cent year-on-year to £15.7 billion compared with a benchmark FTSE All-Share Index fall of 1.6 per cent. In the year to date, those assets have risen 13.1 per cent while the benchmark lifted 10.5 per cent.

In a trading update for the three months to the end of September, the firm said gross inflows had increased for the third consecutive quarter, to £490 million. Net inflows remained steady with both the Q2 and Q3 figure at £111m.

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Advisers actively using the Nucleus platform rose 2.1 per cent year-on-year to 1,389, while customer numbers were up 3.6 per cent year-on-year to 95,373.

Outflows in the third quarter amounted to £379m with the year-to-date total standing at just over £1bn.


David Ferguson, the firm’s founder and chief executive, said: “Gross inflows increased, albeit marginally, for the third successive quarter against a backdrop of continued investor uncertainty.

“Outflows remain higher than normal but in line with expectations, and reflect primarily the ongoing impact of a small number of firms that have been acquired by consolidators.

“Net inflows remained stable at £111m and, as previously reported, we are in the early stages of a new partnership agreement with one IFA [independent financial adviser] consolidator and are in continued discussions with others. We expect these new relationships to enhance resilience of net inflows while also presenting future growth opportunities.”

He said the firm had held its 11th annual conference last month where it welcomed more than 300 delegates and confirmed its intention to continue investing in its investment platform.

“We’re very positive on product development and developments completed in the quarter (or shortly after), included enhancements to our customer portal, Nucleus Go, and new paperless correspondence options for customers,” Ferguson added.

He told investors: “We have significantly increased the velocity of our change programme this year. This planned and marked acceleration has continued into Q4 with a series of further enhancements.”

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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, which floated in 2018, is seen as one of the biggest successes of Scotland’s fast-developing fintech – financial technology – sector. Last month, it posted adjusted underlying earnings of £4.6m, in line with expectations.

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