PlatformsJul 18 2013

Nucleus forced to review ownership structure

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Wrap platform Nucleus is reviewing its ownership structure following FCA rules regarding financial advisers’ conflicts of interest.

Advisers using the platform can invest in the company via an entity called Nucleus IFA Company, and more than 100 adviser firms have done so since its launch in 2006.

But as part of the regulator’s adviser charging rules, intermediaries must manage all potential conflicts of interest, which can include having financial stakes in product and service providers.

In Nucleus’ accounts for 2012, the company said: “The new regulations have made the business model of one of our shareholders, Nucleus IFA Company (NIFAC), redundant and Nucleus has provided a letter of support to allow NIFAC to continue as a going concern while the model remains under review.

“The support [provided by NIFAC] is capped at £250,000 and any liabilities arising under this agreement can be absorbed within Nucleus’ normal operating cashflows.”

Nucleus chief executive David Ferguson said: “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 platform made a profit of £137,762 in 2012, according to the company’s accounts.