My beautiful wrap
Only a few years ago, IFAs wanting to offer their clients a wrap proposition had just two choices - Transact or the pseudo-wraps of Skandia, Selestia and Cofunds.
As with all good ideas in financial services, the insurance companies cannot help but jump on the bandwagon and along came Abbey, American Express (remember them?), Lifetime, Standard Life and so on. Gaining true independence from the insurers continued to be a difficult thing to achieve. Then Nucleus was born.
Here at last was the opportunity to offer true investment advice across all tax wrappers where the main driver is not a purely transactional one.
Why do we like Nucleus? I can tell you in three words - independence, participation and simplicity.
IndependenceTo my mind, this is the most important issue, as I have already alluded to. Clients invested through Nucleus are not enticed to use the in-house funds. Instead, they have the choice of any investment they want. They are not mailed independently of the adviser with special offers. My client database is not at risk of being poached.
ParticipationNucleus is a young organisation and there will be ongoing development of the wrap for some time to come but at Bradbury Hamilton we see this as a good thing. As a participating IFA, we have the opportunity to influence the direction the wrap takes and what products are made available. We can suggest innovations and developments that we want to see and we can build a portfolio for a client that exactly matches their needs.
SimplicityThe Nucleus offering does not sing and dance, it does not have bells and whistles, the website does not dazzle and flash and, most important, the charges are straightforward and easy to understand.
At wrap level, there is no initial charge, no wrapper charges, no annual administration fees, no switch fees and no drawdown fees. Nucleus simply charges 0.35 per cent a year or 0.3 per cent over £1m. That's it, nothing else. Discounts have been arranged with the majority of fund management groups, with many funds accessible at creation or creation plus 25 basis points. Annual fund charges are also discounted, with rebates of around 50 per cent paid into the account. We can tailor remuneration structures to suit our clients' needs. Nucleus does not interfere with this.
The Nucleus platform, or offerings similar to this, has to be the way of the future. It allows us as professional advisers to offer our clients a lifetime of ongoing investment advice and not piecemeal transactional advice.
Sheriar Bradbury is managing director of Bradbury Hamilton