Nucleus has a clear digital agenda for the year ahead. It was the first to re-platform to Bravura Sonata in 2014: a brave – and at times painful – move. However, clearing that re-platforming hurdle has freed up time to focus on its front-end technology. This puts it in a unique position. In this week’s profile, we explore where Nucleus is investing in 2016.
The platform’s assets under administration stood at £8.74bn as at Q3 2015, a growth of 16 per cent year-on-year. It has set itself a target of reaching £11.2bn in AUA by the end of 2016, targeting gross sales of £2.4bn throughout the year.
Nucleus is not a fan of AUA as a measure of platform success, telling us it is selective in the advisory businesses it pursues. Clearly, big does not always mean beautiful when it comes to AUA but healthy net inflows are important.
Nucleus has plans to look at its pricing for larger advice firms in 2016, which is an important step if it is to retain (and attract) higher pot sizes through more attractive rates. We understand some high-value clients have transferred from the platform in favour of lower fees.
The Nucleus technology roadmap shows a clear progression. Its initial focus has been on getting its back-office in order. Re-platforming to Bravura Sonata in 2014 was followed by Genpact’s takeover, from Citi, of Nucleus’ administration systems.
This year, the latest edition of Sonata will be rolled out, which the platform’s chief technology officer Andy Smith promises will enable real-time dealing. It is good to see it has built solid foundations before turning its attention to the “sexier” front-end.
Indeed, technology really matters to Nucleus. Its annual conference, held last week, felt a bit like a TED Talk from a San Francisco tech group. The Nucleus team are technology nerds, demonstrably passionate about the look, feel and function of the platform. Improvements to the front-end are being developed in-house, as, Nucleus argues, it gives it a better level of control over the adviser and user experience.
It is an iterative process. Each component is developed and perfected before moving on to the next. Nucleus also tests the components with its platform user group of advisers. Open API is important to the platform, enabling systems to integrate with third parties. At the moment, it is trialling access to full client transaction histories with Intelliflo. This will be a big tick in the box if it can get it right.
Nucleus also wants to be paperless. Our view is where it is possible to be paperless, platforms really should be. With few exceptions, advisers we speak to are on the same page. Nucleus is close to its adviser community so it is no surprise it shares this priority.
The platform has just launched new-look adviser interface Narrate. Glimpses of it show simple, clean graphics and some nifty features to help advisers make sense of client data. The valuation summary flags transfers in and out to provide context to dips and surges in the value at a glance.
Meanwhile, Nucleus’ big project for 2016, its client portal is being developed using a mobile first approach. In this industry, this approach feels quite radical. It includes secure messaging, facilitates authorisations and provides a document store the client can keep private or make available to advisers as they wish. Nucleus’ ambition is that advisers will use the portal to interact with clients over and above other options.
We will look to see how it is received when it is launched. It looks stylish but we are not convinced Nucleus will realise its ambition for advisers to use it for all client communications. Advisers use more than one platform and many have their own messaging systems.
The notion that the end-client will drive demand is also flawed, as our consumer research suggests advised clients want as little as possible to do with their investments.
That said, advisers will appreciate a client-friendly interface that is easy to use.
Chief executive David Ferguson wants his platform to help advisers “to get more automated to get more personal”. Combining technology with human expertise and intuition makes it more powerful. We hope Ferguson’s ambition pays off for his loyal community of advisers.
Miranda Seath is senior researcher at Platforum