Following Nucleus’ acquisition of Third Financial, subject to regulatory approval, Third Financial Group Chief Executive Ian Partington talks to Isabel Baxter about his hopes for the partnership … Read the article below and here
Transcription
It was revealed in February this year that Nucleus Financial Platforms acquired fellow investment platform Third Financial.
Third Financial is an investment platform and front-to-back wealth management software provider for discretionary wealth managers, multi-family offices, and adviser consolidators. It has more than 50 clients in the UK with £6bn of assets under administration (AUA) on its platform and a further £40bn of assets administered via its software system, Tercero. Following completion, the firm will continue to be led by existing CEO Ian Partington.
"Exceptional service, innovation, and deep knowledge of the financial advice and wealth management market have always been our core values. We see these reflected in the Nucleus team," Partington tells Professional Adviser. The "combined expertise" of both firms will equip Third Financial even better to meet the evolving needs of advisers and wealth managers across the whole spectrum of customer size and activity, he says.
"There will be a laser-like focus on retaining what makes us special: personal relationships with our customers that feed into our exceptional service." Partington notes that a recent survey of Third Financial's customers highlighted it has a Net Promoter Score of +80.
"This is already exceptional in our industry, and we are determined to increase it yet further."
'It is more than just outsourced vs in-house'
The conversation around platforms for financial advisers is often posed as outsourced versus in-house, when the situation is more nuanced, according to Partington. He adds: "There's a whole spectrum of possibilities available depending on how much control the adviser wants over the technology and the services provided.
"And of course, these activities mean the adviser is justified in retaining a platform fee, a new source of revenue for most firms." Third Financial is both a platform and technology business, Partington says.
"This means we can provide platform technology on an arms-length or hosted basis and can supplement the technology with the adviser's choice from our own regulated services (everything from a full custodial and dealing service to perhaps just providing transaction reporting services)."
He notes that some of Third Financial's customers use a white-labelled version of its platform – including whole-of-market asset coverage, custody and asset servicing, and a suite of portfolio management functions – to manage their clients and investments. Meanwhile, its ‘adviser-as-a-platform service' entails working with its technology (software) customers to help them provide their own platform where they take on the third party relationships and regulatory permissions and responsibilities.
"It is really a catch-all term for advisers moving away from the vanilla, client-centric retail platforms to a position where they are able to add more value to the client experience and derive a new source of revenue as a result."
Over time, Partington believes Nucleus' larger distribution network will mean Third Financial can provide its technology to a larger customer base.
"Nucleus' economies of scale and buyer power will help lower our cost base," he adds. "It will also offer enhanced personal and professional growth opportunities for our existing team and those we recruit in future, meaning we will continue to retain and recruit top talent."
The acquisition brings to market a flexible combined group with a range of platform and technology services, according to Partington. "This means we can serve wealth and advisory firms of all sizes."