Funding for this may have been aided by the £19m of “cash or cash equivalents”, the Nucleus Group had at the end of the 2021 accounting period.
In Nucleus's most recent set of published accounts, which cover the period to end of December 2021, the company reported assets under management of £19.8bn (excluding James Hay), which represented an increase of 13.9 per cent.
However, the company’s strategic report highlighted that this has been achieved at a cost, with the yield per customer declining, partly as a result of wider pricing pressure in the industry, but also as a consequence of the company’s tiered pricing structure.
This means the percentage charge paid by the client falls as the size of their portfolio rises, and amid the stout market rallies of recent years a greater proportion of Nucleus clients entered the cheaper fee tiers.
Profit for the period was £2.8m for the year to the end of 2021. Nucleus declined to comment for this article.
Growing pains
There have already been bumps in the road as Nucleus has attempted to grow beyond its roots as a platform.
The company launched a model portfolio service in 2021 but announced it was winding the range down in 2022.
FTAdviser understands one of the issues with the model portfolio service was that advisers were reluctant to move client assets into a newly launched service at a company that was for sale.
In the end just eight advice firms were clients of the model portfolio range, according to Nucleus. It was also launched just as the management of the company was changing, and with that came a change in priority, with the new pivot being towards the retirement end of the market.
Nucleus was among the first standalone platforms to enter the UK market and attempt to compete with the incumbent life insurance companies.
But as the model it and its peers deployed has been challenged in recent years, Nucleus's ability to navigate the new terrain of the platform universe will impact all advisers in the coming years.
David Thorpe is investment editor of FTAdviser
david.thorpe@ft.com
