How much does Nucleus fund platform cost?
|Financial Advice | General
Asked by humpo99, submitted
02 January 2013.
Our new IFA of 24 months has put all our ISAs into the 'Nucleus' platform(?). Total value of about £185,000. Roughly what sort of total charges should we be looking at per annum from both Nucleus and the IFA
Answered by Justin on 04 January 2013
I hope your adviser clearly explained the charges you'll incur before you proceeded with the advice. They're compelled to disclose them and any good adviser should spend time running through them to ensure you're comfortable and understand what's going on.
Anyway, Nucleus itself is one of the more transparent fund platforms as it doesn't take platform fees from fund managers, instead charging customers percentage fees - 0.35% a year on balances below £1 million.
It uses low cost institutional versions of funds where possible (which strip out commissions and platform fees from charges), to ensure rock bottom fund charges.
So, for a typical fund you'll be paying a 0.75% annual fund charge, the 0.35% Nucleus annual charge plus whatever your adviser is charging. Funds on Nucleus seldom have initial charges and Nucelus doesn't levy any itself, so the only initial costs would be those charged by your adviser.
Ignoring the adviser for a moment, the typical 1.1% combined fund/Nucleus charge is a bit higher than you'd typically pay via platforms like Alliance Trust Savings on £185,000, but not excessive.
If your adviser charges an ongoing percentage fee then up to 0.5% is probably fair depending on how good they are at selecting funds and the level of service they provide. Although a cap to prevent fees becoming excessive on larger sums would be preferable. Any more than that and I'd be reticent, unless the adviser truly is an investment guru who makes you a mint.
If you found this answer helpful, please add your vote by clicking here
Readers' Comments (2) - To post a comment please register or login
Comment by glenn at 9:24pm on 23 Jan 2013:
Nucleus may be transparant in costs but not in terms of ownership. IFAs effectively part own Nucleus and recieve more shares as the amount of assets they place with Nucleus increases. Justin is correct that there are cheaper platforms available and any adviser who recommends them has a clear conflict of interest.
Did your adviser mention that to you humpo99? Hope so as they're required to by the FSA!
Comment by justin at 9:42pm on 23 Jan 2013:
Thanks @glenn, a good point I should have mentioned. Doesn't affect the Nucleus platforms itself from a consumer point of view, but there's a risk it may influence advisers to use it over other platforms without making sure it's really in their client's best interests.