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Nucleus reviews IFA shareholding model after FCA concerns


Nucleus is reviewing its business model which allows user firms to become stakeholders in the platform following regulatory concerns.

The platform’s accounts, published today, reveal FCA concerns over conflicts of interest and adviser charging rules mean it has had to review adviser shareholdings.

User shareholdings account for around 51 per cent of the business. The shareholdings were frozen on 30 December.

The accounts say: “The FSA confirmed that the adviser charging rues continue to require financial advisers to disclose and manage any conflict of interest which may arise from adviser firms holding a financial interest in a platform. The new regulations have made the business model of one of our shareholders, Nucleus IFA Company, redundant and Nucleus has provided a letter of support to NIFAC to continue as a going concern while the model remains under review.”

Nucleus chief executive David Ferguson says: “NIFAC was only ever created as an easy and efficient mechanism through which to hold adviser shares in one block. We have always been aware the mechanism behind it may need to be adjusted as the business continued to evolve and grow.

”While the implementation of RDR probably accelerated this change it has not impacted in any way our total commitment to preserving and promoting our core principle of adviser influence and more progressive governance through share ownership.”

The accounts show Nucleus made a £32,000 profit for 2012 compared to a £959,000 loss in 2011.

Turnover at the platform increased 40 per cent to £13.6m, increasing from £9.7m in the previous 12 months.

The highest paid director was paid £113,000, an increase of 6 per cent from £106,000 in 2011.

The firm’s accounts show that one third of new business placed on the platform comes through its white-label platform deal with Paradigm Partners, which is fixed until 2016.

A statement in the accounts says: “We consider functionality, service, price and culture to be critical success factors in our sector and we will continue to invest to ensure we remain at the forefront in each of those areas. We are particularly interested in exploring those areas where we can offer users a wider range of products and services.”

Last week, Nucleus revealed it had made a £500,000 pre-tax profit for the first half of 2013 and expected a similar profit in the second half of the year.

Nucleus currently has assets under administration of around £5.3bn.


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Of course if I held shares in Nucleus as an individual and not as an adviser or by the firm would I have to disclose this to the client? Hummm

  2. This is quite a surprise… David actually smiles!

  3. Noooo! I was racking up loads of Nucleus shares after transferring all of my clients onto the platform.

    Guess I’ll just have to transfer them all onto True Potential now and get another bite of the cherry!

    Kerching ££££££££££

  4. The main reason I have never considered Nucleus as a platform was precisely because of this. Once the all the shares are either bought back or in the public domain (i.e. Not in the hands of any advisers) then I might well consider the platform.

    What is the difference between being a (for example) L&G tied adviser and an adviser shareholder with Nucleus?

  5. man on the moon 19th July 2013 at 10:24 am

    Where other matters at the heart of this decision not only potential conflicts of interest?

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