Nucleus chief executive and founder David Ferguson explains how looking to the future and a desire for innovation and putting clients first has seen the company grow over the past 10 years.
Ten years ago today (and after eight years of trying) we finally secured the funding which allowed us to get this show on the road. Kicking off in a tiny basement in Edinburgh’s New Town we had an ambition to build a modern financial services business which would have clients at its core and transparency as its watchword. Our contention then was that fund supermarkets (essentially first generation platforms) would be toast once the market understood their kickback driven model and that the future lay in the more open, client-aligned wrap proposition. We were massively inspired by the good people of Transact who had created an unprecedented amount of empowerment for advisers and their clients through this model.
We had spent a lot of time researching the market, including working with a group of adviser firms hungry to reject the provider-owned model which had ultimately limited the possibilities for adviser firms and diluted the quality of client outcomes for decades. These advisers all wanted to move to a fee-based model and to promote transparency and the quality of their financial planning talents. All a million miles from the commission-hungry, product-led approach which still pretty much dominated.
And now we are about to enter our second decade and the world looks rather different. Commission is now banned and kickbacks for distribution have been consigned to history. More or less anyway. Fee-based financial planners have led the advice market through the financial crisis, the RDR and will now do so through Brexit too. Whatever happens in the world there will be a demand for high quality financial advice for many years to come. We’re now a little tribe of 161 people looking after nearly £10 billion of assets across almost 80,000 clients.
Thank you to every single person who has made that possible, your contribution has been greatly valued.
We’ve been making money every year since 2012 and it feels like we’ve pretty much earnt our place in the future. We’re kind of proud of that but much more importantly, we now need to build our position in the future.
Any success we’ve had has been on the back of great people, great collaboration with advisers and great technology. These are all key to what happens next. Our market is over-supplied but also over-complex. There are still too many platforms chasing too few assets and using too little technology to drive client engagement and better client outcomes. There are massive organisations destroying shareholder value chasing platforms dreams which are rapidly turning into nightmares. The sector is growing up but real maturity remains some way off.
If wrap was second generation, it’s now time for us to define the third. Third-generation platforms will build on all the transparency / decent corporate citizen stuff but will also offer brilliant client reporting and incredible possibilities for digital client engagement at scale. They will be founded on technology architectures which have been designed for the future, rather than cobbled together in the past and they will be inspired by the margins of the future rather than the sloppy economics of the past. They’ll have a nod to #fintech but they’ll care more about the business model than in artisan coffee and operating out of a loft in Shoreditch.
Crucially, they’ll use the data they have gathered as the meeting place between clients / adviser and fund managers to create new levels of personalization and define modern, low cost, high accountability economics for investing money.
I’ll be holding a Twitter chat Q&A session today at 2:30pm if you want to ask me any questions, especially on our journey the last 10 years, just tweet me on @david_ferguson using the hashtag #AskDave.
Click on the below to see the highlights of our first ten years in business.