On the broad spectrum of financial advice models – with no-frills robo-advice at one end and expensively tailored self-managed super funds on the other – Nucleus Wealth aims to sit smack-bang in the middle.
Nucleus has an office on Melbourne’s upmarket Collins Street, but the team can bring on new clients with as little as $35,000 to invest via an online portal within 10 minutes.
The firm then charge a management fee of 0.64 per cent plus a third-party platform fee.
“It’s much cheaper than the average super fund and not much more expensive than a passive fund, such as an” exchange-traded fund says one of the three Nucleus Wealth founders, Tim Fuller. “So there is the benefit of an active fund manager, with the cost benefits associated with passive funds.
“It’s that middle market that we saw was being overlooked.”
Nucleus Wealth was founded in January 2017 and has enjoyed a stellar run since then with more than 300 clients on its books.
The team offers tailored investments across cash, bonds and international and Australian shares in separately managed accounts. Nucleus uses a proprietary system to automatically rank 1600 stocks in the World MSCI Index and then tailor them to individually curated managed accounts.
Clients are able to log in to their investment portfolio, track performance and see, at a granular level, how each asset class is performing.
That, Fuller says, is a big point of difference.
“If you try to call a big super fund and look at your exposure to the Australian banks, for example, you just can’t get that level of detail,” he says. “We want our clients to be able to log in to their portal and see how they’re going immediately.”
More than that, however, clients also need to be happy with the ethics of the companies in which they invest. Nucleus clients can choose whether to invest in companies based on their morals and ethics, eliminating businesses that fall foul of their standards; for instance, some clients refuse to invest in companies that produce sugar or fast food, while others steer clear of companies that generate more than 5 per cent of their sales from gambling.
“The biggest ethical screen we are finding is with old-growth forests,” Fuller says. “A lot of clients are opposed to investing in companies involved in logging. Australian banks are also on the nose with a lot of clients, which I would say has a lot to do with the [Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry]. It may take a few years for banks to regain that reputation within the community.”
Fuller thinks many Australians are over-exposed to local stocks.
“Most Australian investors are over-exposed to domestic equities because it’s very difficult to find a multi-asset investment that is also affordable,” he explains. “We are changing that, with clients able to trade international shares on brokerage as low as 0.22 per cent.”
Fuller says about 60 per cent of Nucleus clients activate at least one ethical screen, with the youngest and oldest client demographics applying the most screens.
In both the below-40 age group and the above-60 age group, 70 per cent of the cohort applies at least one ethical screen.
In the 40 to 50 and 50 to 60 age groups, the rates are 45 and 62 per cent, respectively.
“It’s really interesting that older clients are applying ethical screens in such high numbers,” Fuller says. “The under-40s are a no-brainer, but the older clients was a bit of a surprise.”
Tim Fuller
Name of firm: Nucleus Wealth
Name of licensee (if not self-licensed): Integrity Private Wealth
Time in the industry (previous jobs?): Seven years, with previous stints at Akambo Private Wealth, Mercer Financial Advice and AMP Horizons
Academic qualifications: MBA; bachelor’s degree in geomatic engineering
Accreditations: Certified Financial Planner
Professional association memberships: Financial Planning Association
