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Technology has helped industry ‘tell the truth’, says Nucleus’ Ferguson

25 February 2018

Nucleus CEO David Ferguson says when reviewing the impact of technology on financial services, the focus should be upon how it has transformed transparency, rather than the way it has altered the interaction between customers and companies.

Addressing advisers at Nucleus’ annual conference, ‘Disruption 2018’, Ferguson said talking about “mobile, apps and uberisation misses the point.”

“Technology’s biggest impact has been transparency. It’s now mandatory to tell the truth and over time, that means the greatest value flows to those who add the most. The customer is beginning to be put first,” he said.

As a result, financial advisers must become “more human” with their clients and commit to being even more on their side, according to Ferguson.

Ferguson added that platforms were the only entity that were able to tell people who is getting value for money in an investment sense.

He commented: “As we continue to develop the Nucleus wrap we, and just like the FCA, need to get more curious on asset management, on value for money. Vanguard has already disrupted financial services, but transparency is about to have its turn. Only 25% of fund group staff contribute to investment decisions. More work in sales and marketing. The talent is very badly packaged.

“MiFID II led to disclosed fees rising 25% between 31 December and 3 January. Way more than in other industries, costs in fund management have a direct impact on the utility value of the product. The average active fund now discloses costs of more than 100bp. But yet, overall, fund groups capture only about 30bp in fees. Why are clients paying three or four times that?”

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