Firstly I'd like to wish you all a very happy New Year. It hardly seems like a few hours since the end of the last Millennium, but already we are into its second decade.
I'm not sure how one might characterise the 'noughties but I'm guessing they will be most remembered for the nonsense of Y2K, the rise of terrorism against the west, extraordinarily appalling television and the financial meltdown. Here's hoping the 'teenies' might fare a little better.
From Nucleus' perspective, 2009 was a wonderful year, despite all of the doom and gloom surrounding our sector. We managed to grow our year-end assets by 130% and our revenue by about 140%. I'm not sure we can keep growing our turnover by an average of nearly 7% per month (we were helped by the market recovery last year) but the momentum that our IFA community has built is considerable. Our December inflows were more than three times what we achieved in January - it would be great to continue on that kind of trajectory.
At the start of 2009 we declared our word of the year to be 'authenticity' and it is particularly pleasing to have delivered these results while remaining true to that core principle.
We set Nucleus up on principles of accountability and transparency and while those have served us well it is more encouraging than ever to see the regulator and the competition waking up to the reality of what transparency really means - I believe we have led the market in this regard and we will continue to do whatever we can to take that behaviour to another level.
In terms of the broader market (and probably largely due to pressure for transparency) it is becoming more accepted than ever that wrap will supercede fund supermarkets as the mainstream platform model - we won't see wrap inflows overtake supermarkets this year but as the market change accelerates in the period up to the introduction of the RDR in 2012 I wouldn't be surprised to see a severe narrowing of the gap between the different platform types.
What may be more interesting is the extent to which the larger platforms are distracted by the changes they need to make to their technology / operations, their distribution strategy and perhaps most crucially their business model to deal with the post-2012 world. None of the legacy providers have yet to really demonstrate sustainable profits despite their immense scale and no matter what work has been done to date they will have to delve into their pockets to fund the transition.
From our perspective, our objective leading up to 2012 is similar to that we set ourselves when the credit crunch began to bite, namely to gain ground on the competition. We have come from literally nowhere to have around 12% market share in the wrap market and about 3% in the broader platform market. Given the market in general is growing by perhaps 10% per quarter, any meaningful improvement in our market share should stand us in good stead.
Our imminent break-even can only help and we hope to move quickly to stable profitability on a month-to-month basis from this point. I'd like to add how thrilled I am to have hired Standard Life's Aileen Mathieson as our new CFO - a huge statement of intent!
If 2009 was the year of authenticity, 2010 is the year of maturity. A year in which we will pass our break-even point, be readily able to demonstrate the sustainability of our business and finish putting in place the foundations that will prepare us for a full-scale assault in the market in 2011 and beyond. Here goes...
Moves to overweight equities and fixed income
The Big Interview: Focus on ethical investment
View from the front row
'No control or oversight'
359 new customers in 2018