The Nucleus census is our annual temperature check of Nucleus platform users, tracking how they and their businesses progress from year to year. We’ve just published the 2019 census which aims to understand how the changing regulatory landscape, market events, and investor confidence have impacted Nucleus users.
As the demand for advice continues to grow, many firms are focusing on how they can evolve and improve their businesses to serve more clients. Despite many saying they take a selective approach to client enquiries, we’ve still seen a 9% increase in the average number of clients per adviser.
Client referrals play a huge part in this, with nearly all firms receiving new clients this way. These referrals are appreciated, valued and aligned with increased levels of trust between adviser and client, also leading to advocacy.
Interestingly, users spent a smaller proportion of their time with clients or prospective clients, instead focusing on administration.
For smaller firms where employee time can be split across several roles, this could be a symptom of complying with regulatory requirements across 2018. And many have one eye on the future, taking the opportunities today to build for future growth and success.
On the regulatory front, no-one is under any illusion the hard work is done – in fact quite the opposite. Around 30% tell us they don’t segment their client bank.
Ex-regulator Rory Percival suggests this will be a key focus for the FCA this year. So regardless of feelings around the usefulness of these rules (and they are rules), some have more work to do here.
With increased regulation (particularly as Mifid II starts to bite), there comes additional detail for clients including quarterly statements, 10% drop reports, costs and charges disclosures and an increased focus on suitability. Clients could become overwhelmed and disengaged (especially in periods of market volatility). Simplicity is key, with ‘making sense of it all’ continuing to be the key factor client’s value in advisers, along with trust.
There is a continued, growing interest among advisers in acquiring other firms or client banks, and most owners are committed for the long term.
When they do decide to exit, a client-friendly succession plan is of major importance. Some are considering an Employee Ownership Trust (EOT) or selling to a like-minded advisory firm to ensure the least disruption possible for clients and staff.
Confidence remains high, with nearly all Nucleus users confident about their future business.
And rightly so. Continued success will be seen from those that continue to adapt their businesses to harness the massive opportunities being presented.
If you’d like to read more, download a copy of our census or watch our highlights video below.