Nucleus marked its 10th anniversary this week by highlighting ten areas on which fund groups, platforms and other providers should focus to secure better-quality results for their customers and ‘future-proof' their businesses.
The wrap platform, which launched on 29 June 2006 with seven founding advisory firms and has just passed £10bn of assets under administration, called on providers to focus on clarity of cost and prioritising the interests of their customers, rather than themselves.
"Back when we launched, the big challenge was to get people to believe in transparency and doing more online," said Nucleus chief executive and founder David Ferguson (pictured). "A decade on, those battles have been won but new challenges have emerged.
"For example - how can we help adviser firms to embrace technology and deliver a more digital client experience and how can we improve the effectiveness and accountability of the fund management sector.
"Although the Retail Distribution Review has helped move the industry into a new and fairer world, providers still have a lot of work to do to ensure consumers obtain the best service they can."
The ten areas Ferguson identified as ripe for change are:
1. "Reflect every single day you are responsible for looking after other people's money."
2. "Make it as easy to transfer money between platforms as it should be."
3. "Work harder than ever to lower overall costs - in the current lower-return environment, this really matters."
4. "Don't vertically integrate your businesses with the sole intention of taking advantage of poorly-informed customers."
5. "Stop pretending some fees simply cannot be disclosed."
6. "Withdraw complex fee structures that are designed exclusively to hide the truth."
7. "Stop telling people your string-and-Sellotape technology infrastructure is future-proofed."
8. "Share some of your benefits of scale with your customers - for example, Transact has lowered its pricing over the years to reflect increases in profits."
9. "Start disclosing all of your fees in a way your customers can understand."
10. "Don't pretend you're part of the future when your legacy business is still treating people badly."
Expanding on the subject of vertical integration, Ferguson said: "We are concerned that some of the emerging vertically-integrated businesses are being constructed solely to extract 2%-plus each year from client portfolios, without much regard for whether this is a good idea for customers.
"The bottom line is that, for most people, it is easy to pull together a platform and asset management combination for well under 1%. When you add advice on top then, you should still be coming in well south of 2%."
As for his view, some fee structures are deliberately designed to hide the truth, he explained: "Some platforms - and other providers - continue to promote fee structures that are designed to obfuscate and confuse, which simply cannot be in customers' best interests.
"In a world where many people, unfortunately, do not understand what 50% means, the industry has a moral obligation to design and present its fee structures in a far more transparent and customer-friendly manner.",
