The Client
Edinburgh-based Nucleus Financial Services Limited provides wrap platform services to UK Financial Advisers.
Nucleus administers a fully independent, ‘open architecture’ platform that gives access to a range of tax wrappers and over 6,000 different assets. Offering clients a totally clear charging structure that unbundles the cost of advice, the wrap fee and the asset charge, Nucleus is happy to add most assets where there is adviser demand as long as they can administer it.
Since its launch in 2006, Nucleus has established itself as a major force for change in the investment and pensions market. It is now a thriving community of over 800 adviser firms, which, through ownership and control of the business process, seeks to create a better customer experience. Nucleus currently looks after 68,000 clients and has around £8.7bn of assets on the platform.
Nucleus: The Challenge
Soon after its creation as an online wrap-based platform, Nucleus sought a technology partner that could not only offer a single order-routing network, but could also provide a variety of services in order to simplify their trade processing. This led to selecting order routing from Calastone.
Calastone Solution
In 2008 Nucleus implemented order routing, enabling them to connect and process fund orders accommodating different messaging protocols. Calastone’s Execution Management System provides real-time visibility over all transactions, resulting in higher productivity at reduced risk and lower cost.
The Outcome
The order routing solution has proven to excel in speed and reliability, easing the process of signing up to fund managers. With extensive market coverage in the UK and Europe, Nucleus can now connect to a wide range of fund companies, enabling them to better assist their clients.
What prompted you to adopt Calastone?
Back in 2008, the competitive landscape was immature and largely fax-based. During that time the predominant message system for electronic fund transaction order routing was considered rigid, notorious and limited.
Calastone’s order routing system was like a breath of fresh air. Not only were our two companies culturally aligned in the sense we were both considered as ‘disruptors’ to the marketplace, we felt Calastone was the right fit because of shared beliefs towards flexibility, innovation and the opportunities that adoption of a low-cost model approach could bring to the industry as a whole.
What are the key benefits reaped since you went live with Calastone?
The overall process of placing and verifying trade orders has been dramatically simplified. With extensive market coverage, the Calastone system enables Nucleus to sign up to new fund managers with ease, meaning we can fully concentrate on our primary function as a wrap platform. Since launch we have 87 fund manager partners using Calastone.
In addition, Calastone has helped us to be a bit more disruptive by introducing us to industry influencers and helping us bring transparency to financial advisers across the UK.
What were your key concerns when selecting vendors?
Our overall interest was in having a system that was flexible, though speed and reliability were also key concerns. We did not want all of our time taken up by worrying about, or micromanaging, various trading methods.
How did you prepare for the onboarding process?
Implementation via Calastone was a very straightforward process and the onboarding team was very easy to deal with. We simply provided Calastone with the data, which was then configured by the team, and the end result was it just worked.
Are you pleased with any particular aspect of Calastone’s service?
One area in which Calastone excels is their reliable service. Calastone provides great response times, and because the markets recently had to move towards T+1 and T+2, the ability to confirm trades at speed is important to us especially as regulatory requirements get tougher.
What would you like to see next?
We would like to see Calastone join up some of its automated solutions, for example, with regards to electronic re-registration and net settlement services. It would be great if Calastone did the same thing with these areas as it did with fund trading.
With thanks to Andrew Smith, Chief Technology Officer,
Nucleus Financial Services Limited
