Nucleus cuts fees on large portfolios

Nucleus cuts fees on large portfolios

Nucleus has used its growing scale to cut fees for clients with at least half a million pounds invested in their portfolio.

From 1 July clients with between £500,000 and £999,999 on the platform will see their fees reduced from 25 basis points to 17.5 basis points, while those with more than £1m invested will have their fees slashed from 15 basis points to 5 basis points.

Those with less than £500,000 will continue to pay 35 basis points to use the adviser built wrap platform.

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Nucleus said the fee change was designed to ensure existing clients benefit from the continued success of the business while also ensuring overall pricing remains competitive.

Nucleus business development director Barry Neilson said adviser feedback had called for a simple pricing structure that becomes "even more competitive at higher portfolio levels”.

He added the company’s latest results showed assets, revenue and profitability have all grown strongly in recent years, and this continued financial success has given the business a strong foundation to be able to cut fees.

“We are ever mindful of the need to operate a responsible pricing model that reflects the commercial realities of providing a sustainable and financially robust platform while ensuring clients are charged appropriately and benefit from our increasing scale.

“As an adviser built business we share our users’ desire to deliver the best possible client outcome and it has always been our intention to ensure advisers who use the Nucleus platform, as well as their clients, benefit directly from the continued success of the business.”

Platform pricing has become increasingly competitive in recent weeks as clients call for lower fees and easier to understand pricing models.

Last month Ascentric overhauled its fee structure to an “all-in” model where advisers pay a flat charge based on how much is invested on the platform.

Dennis Hall, chief executive of Yellowtail Financial Planning, called the 5 basis point chare on portfolios of over £1m “quite bold” and is likely an attempt by the platform to attract larger clients.

“That’s getting quite competitive. The big story there is the 5 basis point charge on portfolios over £1m because that makes me question my platform that charges 15 basis points,” Mr Hall said.

“It's a huge change. Clearly they’ve looked at their demographic.”

Mark Polson, principle at the Langcat, said that while the move is likely a good one for Nucleus as a business, it is surprising that the fee cut was not extended to those with less than £500,000 on the platform.

“It’s really good to see Nucleus leveraging the fact it’s making profits by reducing charges. Transact has taken a similar tack over the years and it feels like a good thing to do.

“However, I’m a little surprised that the cut is only for clients above £500,000 – this mirrors Nucleus’s earlier price reduction in 2013.  Last time I checked the average client size on Nucleus was about £140,000 or a little more, so there’s a question about how many clients will actually benefit.”