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November 2, 2020

Wrap platform provider Nucleus to take over certain OpenWealth assets

Edinburgh-based wrap platform provider Nucleus Financial Group has agreed to purchase certain assets of OpenWealth in order to have more control over its processes and product development.

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OpenWealth is the trading name of Genpact Wealth Management UK.

At the same time, Nucleus will continue to licence its core software Sonata from Bravura Solutions.

Nucleus’ access to Bravura’s Sonata was previously offered via an outsourcing agreement with OpenWealth.

In 2018, Nucleus entered into an agreement with Bravura to gain direct access to the technology.

Transaction details

Nucleus will pay £1.5m ($1.9m) in cash for the transaction, which is slated to close later this year.

The two parties have been working together since 2011, with OpenWealth offering business process outsourcing (BPO) services including account servicing and administration to the wrap platform.

The concerned OpenWealth assets have no material book value and posted an EBITDA loss of around £2.5m last year.

Glasgow-based OpenWealth will continue to offer a “restricted” range of services to Nucleus for around 15 months.

As part of the deal, Nucleus will also absorb the employees of OpenWealth. This will increase the staff headcount at Nucleus to nearly 380.

Benefits expected from the deal

Nucleus anticipates the deal to be “earnings enhancing” next year and “increasingly accretive” after that.

The firm believes that the transaction will speed up its product development and automation programme as well as aid the expansion of its operating margin.

The firm also expects the purchase to boost the efficiency of its offline service and result in new growth opportunities.

Nucleus founder and CEO David Ferguson said: “The Nucleus / OpenWealth combination has worked well for the better part of a decade and bringing the two together will allow us to focus more than ever on developing our online product and offline service.

“We’ve always believed that the highest service levels are achieved when the online product is so intuitive that the customer hits the button themselves and on the occasions they are unable to do so, that the offline service is exceptional.

“We believe that this deal will kick-start our margin expansion and accelerate growth by moving us closer to having the best product offering in our market.”

At September-end 2020, Nucleus’ wrap platform served more than 1,370 active adviser users and the firm worked with over 880 financial adviser firms.

 

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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