Edinburgh fintech Nucleus sees funds top £16 billion after overcoming investor uncertainty

Nucleus Financial Group, the Edinburgh-based fintech business, has seen its assets under administration pass through the £16 billion mark after seeing a “marked improvement” in fund inflows.

David Ferguson is the founder and chief executive of Nucleus Financial Group. Picture: Lisa Ferguson

The “wrap platform” provider said it had delivered a solid performance against a backdrop of “investor uncertainty” during much of the past year.

Releasing a trading update, the firm said assets under administration (AUA) stood at £16.1bn as of the end of December, up 2.8 per cent over the previous quarter and an increase of 16.3 per cent year-on-year.

By comparison, the FTSE All-Share Index was up 3.3 per cent on the last quarter and 14.2 per cent year-on-year.

Gross inflows increased for the fourth consecutive quarter, to £497 million, marking a 7.6 per cent increase on the final quarter of 2018.

The firm said that net inflows had shown a marked improvement on the previous quarter, increasing 37.8 per cent to £153m.

Meanwhile, the number of advisers actively using the Nucleus platform rose 3.8 per cent on the last quarter and 3.3 per cent on the same quarter a year earlier, to 1,442. Customer numbers nudged up 1.6 per cent, quarter-on-quarter, and by 3.4 per cent, year-on-year, to 96,857.

David Ferguson, the firm’s founder and chief executive, said: “We’re really pleased with the 16.3 per cent increase in AUA over the last 12 months and, in particular, to post a fourth successive quarter of gross inflow growth, especially against the backdrop of investor uncertainty during most of 2019.

“It was especially pleasing to see net inflows improve in the last quarter – these had held steady across Q2 and Q3 but increased by 37.8 per cent in Q4. While still early days, this positive momentum has continued into the new year and we feel well-positioned to build on this.”

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 firm, which floated in 2018, is seen as one of the biggest successes of Scotland’s fast-developing fintech – financial technology – sector.

Ferguson added: “Q4 saw further significant investment in the business with new functionality that allows the placing of multiple trade instructions at the same time, a process our users tell us will save considerable processing time.

“Further enhancements included improved bulk switching capability, enabling more efficient adviser performance, and the successful live testing of new telephony infrastructure. Each of these enhancements has resulted in improved service delivery, engagement with users and resilience.”

The firm is scheduled to release its results for the year to 31 December 2019 on Tuesday 24 March.