Nucleus has blamed higher volatility and implementing changes around Mifid II and GDPR rules for a 15% hit to net inflows in the first six months of the year.
The platform provider took in net inflows of £726m in its first set of results since becoming a quoted company, down 15% from £850m in 2017.
Gross inflows were also 4.5% lower in the financial period ended June 2018 at £1.27bn versus £1.32bn the year before.
Outflows of £539m were in line with expectations, the firm said.
Dented inflows
Nucleus CEO David Ferguson (pictured) said inflows had been chiefly dented by more volatile markets and the twin introduction of Mifid II regulation and GDPR rules in 2018, which halted momentum across the sector as advisers and platforms grappled with getting their businesses up to speed.
“We expect inflows per firm (across the sector) to remain slightly soft in the short-term as post-Mifid II and post-GDPR processes mature and adviser firms rediscover capacity to take on new clients,” he said.
Replatforming
But he said the group also expects to win more market share as rivals struggle with technology issues around replatforming.
Earlier this year the Lang Cat said that 90% of the £519bn assets held on adviser platforms are subject to disruption from major business changes like a public listing, M&A activity and technology upgrade.
Nucleus currently has about 1,357 active adviser users on its platform and services more than 90,000 customers.
It has £14.33bn in assets under administration, up 15.6% from £12.40bn in 2017.
Profits up
Ferguson said growth in these two key performance indicators “show that our adviser users continue to share our ambition of promoting transparency and improving customer outcomes”.
He added the firm’s financial performance was also in line with expectations. Adjusted profit before tax was up 152% from £1.9m to £4.9m over the period, while revenue rose 11% to £21.6m.
The group has returned £2.7m to shareholders from dividend payments thus far and anticipates paying a further £1.1m by 19 October 2018.
