Edinburgh fintech star Nucleus Financial riding out pandemic as assets rebound

Nucleus Financial Group, the Edinburgh-based fintech business, has seen its assets under administration return close to pre-Covid levels after a “volatile” few months of market activity.

David Ferguson; founder and CEO of Nucleus Financial Group, based in Edinburgh. Picture: Lisa Ferguson
David Ferguson; founder and CEO of Nucleus Financial Group, based in Edinburgh. Picture: Lisa Ferguson

Releasing a trading update, the firm noted that is had £15.8 billion of assets on its platform as of the end of June. That total is up 13.1 per cent on the previous quarter and 3.2 per cent year-on-year. It compares favourably with the £16.1bn recorded at the start of the year.

Advisers actively using the firm’s platform increased by 3.3 per cent year-on-year to 1,428 and remained at similar levels to the first quarter.

Customer numbers, meanwhile, lifted 4.3 per cent year-on-year to 99,797 in the second quarter and have since broken through 100,000 this month.

David Ferguson, the group’s founder and chief executive, said: “The Covid-19 pandemic has had a significant impact on all our lives over the last four months and will have a continued impact for a time to come.

“In this type of situation, we can only control our response to the circumstances, and I’m pleased with how the business has responded.

“The health and well-being of our staff remain our highest priority, and we made an early and decisive move to have all our people switch to home working. The platform has remained fully operational throughout.

“Markets were particularly volatile in the first few weeks of the crisis before recovering some ground and stabilising over the period. Our AuA [assets under administration] is more or less back to the level we started the year at, £15.8bn compared to £16.1bn.

“At the same time, while gross inflows are down on the prior quarter, net inflows have held up well with a 48.6 per cent year-on-year increase in Q2.”

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.

Ferguson added: “Our expedited move to accepting scanned documents ensured advisers could quickly adapt to the lockdown situation and helped minimise any friction in the new business process.

“While the future impact of the Covid-19 crisis is unknown, we remain positive about the long-term future of the sector. As such, we continue to invest in our people, our platform and our proposition, to ensure we deliver improved service, engagement with users and resilience.”

Shore Capital analyst Paul McGinnis noted: “Operational gearing is inherent to the Nucleus business model, meaning this higher AuA drives substantial bottom-line upgrades.”

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