Nucleus Financial assets under admin nudge £15 billion

Nucleus Financial Group has unveiled a jump in assets under administration (AUA) as positive market movements in the first quarter helped to drive up asset value.

Nucleus Financial founder and chief executive David Ferguson. Picture: Lisa Ferguson

In an update the Edinburgh-headquartered fintech, which provides so-called wrap platforms for financial advisers, saw AUA hit £14.8 billion in the three months to 31 March, a 9.1 per cent uplift from the same period last year.

This marks a 6.3 per cent quarterly increase, from £13.9bn at the close of 2018.

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Net inflows contributed £134 million to the rise, while market movements accounted for £735m. It represents a significant improvement from the final quarter of 2018, when market performance resulted in a negative contribution of £994m.

Nucleus contrasted its first-quarter growth with the FTSE All-Share Index rise of 2.2 per cent year-on-year and an 8.3 per cent quarterly rise.

The fintech, which floated on the Alternative Investment Market in July, has developed software platforms that enable financial advisers to provide online access to clients for investments across individual savings accounts (Isas), pensions and bond accounts.

The number of advisers actively using the platform increased marginally to 1,376 in the quarter, while customer numbers rose 0.5 per cent to more than 94,000.

Gross inflows crept up £4m to £466m, with momentum improving in the run up to the end of the tax year.

The fintech also reported key services developments in the quarter, including upgrading its core platform, introducing a new Junior Isa product and launching the beta version of its client portal, Nucleus Go.

Earlier this month the group hailed a strong performance in its full-year results for 2018, as annual revenues climbed from £45.5m to £49.4m.

It also pointed to benefits from a restructure of its business operations carried out last year, which is expected to accelerate the rate of product development.

David Ferguson, Nucleus founder and chief executive, said: “It was pleasing to see AUA levels increase in excess of 9 per cent year-on-year compared to a FTSE All-Share increase of 2.2 per cent in the same period.

“We completed a change to our technology and BPO [business process outsourcing] services model in Q4 2018 with the intention that this will improve our change velocity and I’m pleased to report that Q1 has borne this out with a significant upgrade to the core platform software, the launch of our new Junior Isa product, and the beta launch of our new client portal, Nucleus ‘Go’ all successfully completed in the quarter.”

Shore Capital, nominated adviser to the fintech, expects assets on the Nucleus platform to break the £16bn mark by the end of the year.

Nucleus, which Ferguson set up with the backing of a number of financial advice firms in 2006, is seen as one of the biggest successes of Scotland’s fintech sector.