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Nucleus launches alternative to ‘overpriced’ DFMs

21 January 2021

Nucleus has launched a new adviser-focused managed portfolio service, as it vows to deliver an alternative to “overpriced” discretionary fund managers. 

Following a soft launch, the solution – named IMX – has been made available to all advisers using the Nucleus platform, with access to managed portfolios at institutional cost, offering “better value for money,” the wrap platform said.

The portfolios have been built by Nucleus in collaboration with the Hymans Robertson, which operates in the institutional investment space, offering risk and consultancy services to trustees, pension funds, employers and financial services firms.

The IMX service will cost 15 basis points, with the fund management of the portfolios ranging between 20 and 36 basis points, to give an overall price of between 35 and 51 basis points.

Advisers using the service can access the IMX portfolio modeller, available via the platform, to understand which portfolio is most aligned to their client’s particular goals.

David Ferguson, chief executive, Nucleus, said: “For far too long, retail asset management and DFM services have been overpriced, oversupplied and have tended to underdeliver for the end user. Financial planning is about people, not products, and our analysis indicates the portfolio component can be done better and at much lower cost without simply going passive.”

IMX offers advisers a wide range of portfolio options, with a range of 11 ‘spend’ portfolios focused on providing income and 12 ‘grow’ portfolios.

Fergusson added that IMX has been built very much with the client needs in mind, “not the product”, using an ‘outcomes-led’ approach to investment management and data analysis to create a set of hypothetical client goals.

The 23 portfolios he said were the result of “starting with the goals of 100,000 clients and whittling them down until we got to a group that covered the core objectives”.

Jonathan Letham, head of IMX, Nucleus, commented: “This is about taking the best elements of institutional investing to create an outcomes-focused investment solution whilst keeping costs low by accessing the most appropriate solution, be that active, passive or factor-based investments, depending on the asset class we’re investing in.

“Our portfolios are designed to cater for a wide range of potential client goals and the service goes beyond simple risk questionnaires.”

Daniel Williams, financial adviser, Morgan Williams & Co. said the transparency of the new solution means the firm can see where the service is adding value.

Williams added: “The IMX portfolio modeller in particular allows us to track how clients’ investments are progressing against their goals, enabling us to have a better quality of conversation when it comes to reviews. Clients can see the value of advice, separate from the portfolio return. And through accessing institutional share classes, IMX means we can do all this at a lower cost.”

Professional Paraplanner