An advice firm which has worked with Nucleus since the platform's inception is considering leaving following the news it will be bought by James Hay.
The management team at Surrey-based Bespoke IFA is investigating alternative platforms, saying it had “no intention of hanging around” while the deal takes place.
But James Hay has committed to carrying out changes in a "measured and controlled way".
Paul Francis, director and principal at Bespoke IFA, said: “We hate the idea that another bunch of people we don’t know are clearly interested in getting their hands on the Nucleus assets.
“[They] would no doubt say anything to keep us all on board, and yet we have no idea what they will actually do with the platform [...] we have all been working on so hard together with Nucleus to develop for 14 years into the excellent client investment management tool that it now is.”
Roger Graham, head of operations at the firm, told FTAdviser part of the disappointment of the James Hay deal was that they had “contributed greatly” to the platform it is today.
He added: “We have been with them from the very start, when Nucleus was just being evolved. A lot of the development came from IFAs, we had regular sessions and they would come back and improve the platform.
“It’s not just about a firm that we use, but our contribution to their growth and development.”
Other advisers were happier about the deal. Paul Hogarth, chief executive of Tatton Asset Management and also a Nucleus user, said the deal brought an end to the uncertainty of where Nucleus was going to land which was helpful for all involved.
He added: “It also creates a sizeable combination of the two platforms with £45bn assets, giving the new combined entity the fire power to remain competitive which should lead to a better value proposition for all.”
The comments come after James Hay announced this week it had reached an agreement with Nucleus to take over the platform, paying £145m and creating an entity with £45bn assets.
FTAdviser has since learned that Nucleus staff could face redundancies at the firm post-takeover, with talk of “moderate” job losses in the aftermath of the deal.
The details of the arrangement also show James Hay intends to merge the operations of Nucleus with James Hay Group to create one financial planning and retirement-focused adviser platform, using FNZ technology.
Technology turbulence
For Bespoke IFA, the medium-term plan to migrate Nucleus users to FNZ technology, was a big worry.
Graham said: “This is going to be one heck of a migration. These things can go badly wrong and we’ve seen it all before and we’re worried.
“Some may say, should we not be reacting and instead, waiting to get more information? That is a reasonable thing for others to say, but our experience tells us that if we do our own migration in a smaller way, we can do it in our own time and manner and control the situation.”
Bespoke IFA is not the first to raise concerns over the migration. Earlier this week, experts warned there were “significant challenges” ahead for the firms.
But a spokesperson from James Hay said the firm was excited about its agreement with FNZ, as it would allow its advisers and their end clients to benefit from the “considerable investment” FNZ has made in the development of “market-leading technology, their people and best-practices administration”.
There will be no immediate change for Nucleus advisers, but once the deal is completed the company will undertake an evaluation of the current technology arrangements — Nucleus’s deal with Bravura — with the goal of combining the businesses so the front-end is aligned around Nucleus with the back end run by FNZ.
Graham added: “When we look at FNZ, there doesn’t appear to be an IFA anywhere in sight.
“It is a huge firm. We won’t have any input, we will be a very small player and have no influence.”
Hogarth was less concerned, saying any future platform migration would be “well planned, thought out and considered” before any green light was given.
Standard of service
Bespoke IFA was also concerned over the level of service provided to advisers by James Hay.
Graham said: “We were gutted to find that James Hay was buying Nucleus. As an IFA of many, many years, James Hay has never been good for IFAs and the way they handle things is poor.
“You can’t get information out of them. We’ve got rid of almost everything that was on James Hay because we had so much trouble.”
On the other end of the spectrum, Nucleus was easy to deal with, quick to respond and provided excellent adviser service, he said.
But Hogarth said the merger would help this aspect of things. He said: “It enables the enlarged group to go back to basics, focusing on value and service and not trying to enhance the proposition with addons which create little or no value.”
James Hay said it had made significant investment in its customer experience and would continue to do so.
The spokesperson added: “We have a new management team leading the business and this has been made a priority. We have seen improvements already and we are confident this will continue.”
Addressing the concerns about moving to FNZ, James Hay said: "Any changes will be made over time, in a measured and controlled way to ensure continuity for clients."
Nucleus declined to comment.
imogen.tew@ft.com
What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know
