Ascentric joins the profitable platform club

Well done all

Good to see all these firms getting into profitability - makes the whole thing more sustainable!

Well done to Hugo and the team - good to see the so-called smaller players leading the way...

Well done Ascentric! We have enjoyed doing business with you and pleased you have reached this milestone. Onwards and upwards!

This is fantastic news. Ascentric is our chosen Wrap and it is very satisfying that the financials have worked out exactly as planned.

Congratulations to the Ascentric team. This is really good news and confirms our decision to chose you as our preferred Wrap.

I echo the comments of other Ascentric users. Well done... onwards and upwards!

Well done Ascentric. However, I don't want to appear hugely negative here but we have just completed 3 months of due diligence and filled out more spreadsheets on Excel than I ever thought possible looking at various scenarios.

What initially looked amazing against Standard, AXA and Transact was the cost at 25bps but if you start to map you service proposition to the costs it soon racks up as Ascentric charge for everything on top. Taking out an account out, assigning a model, rebalancing twice per year and the odd CGT exercise can push that up to over 65bps per year. So in some respects I can certainly see how they are in profit.

This was the same with 7IM who were really expensive as you have to pay for each trade. The worst was True Potential whose initial offering looked exciting but we would have to scrap our IO system and I think the trades are £10 each which, according to our calculations made them the worst of the bunch, especially as the platform charge is 40bps.

Our conclusion was that Nucleus looked the best as you knew where you stood but 50bps seems a bit pricey unless you buy in at 35bps.

Forgive me if I have made some errors but I must confess it is very confusing to us mere mortals, it would be far better if they would all unbundle the charges for us!

Tony

Just to clarify, the 7IM platform operates 2 charging structures 25bps with dealing charge and 35bps with no dealing costs, these AMCs are further discounted depending on portfolio size(other discounts may also apply).

Thank you for all the positive comments above...

@Tony Shaw...I'm not sure what case size and dealing frequency you selected - whereas it is theoretically possible to end up with such a high charge (a very small case size and alot of dealing outside model portfolio) our average total charge on Ascentric is less than 35bps...if one doesnt trade it tends towards 25bps - if you do trade more than average it will be more than 35bps...

Both the tools in the market Capita and AdviserAsset demonstrate very clearly this position..

@Hugo Thanks for the clarity. Our average case size is £93,000 buy the way and on GIA's where we would seek to use the CGT allowance and pensions it was the most expensive.

@ 2 pence worth - thanks again for the clarity but on the above I doubt there would be a discount for us on most cases.

@Tony - You make a good point, however, I would be interested to know what you consider expensive.

To sum up, given your book of clients, you believe Ascentric and 7IM to be too expensive @ approx 35bps . One could argue that the service, functionality and commitment to market that you get from the above makes this a good proposition for both clients and wealth managers.

Just my 2 pence worth!

Well done Ascentric...I hope your success continues

My opening line should have read, 'what do fee do you consider appropriate for your book of clients'?

@2PW No, I do not consider 35bps expensive and that’s why Nucleus looked good because you know where you stand with ISA GIA and PPP. For example, on pensions this looks great for us. Ascentric looks better for our 3 clients over 1M at 10 bps and the trading charge is irrelevant at this level.

Our only fear with Nucleus is that I certainly would prefer a provider thats in it for the longer term. In five years time for example how will the landscape look? I think it would be great if they were still there representing the IFA but I think not!

As I said, True Potential at 40bps and the £10 charge was the most expensive because if you were rebalancing for CGT on an ad hoc basis and then effectively you would add another 300 quid for out and back in on a 15 holding portfolio. Therefore, a £50,000 GIA would actually cost 100bps per year, 70bps for 100,000 and 50bps for £150,000.

This is horrendous and way above want clients should pay and in addition you have to use their software and although our IO is probably a bit dated now and perhaps clunky we are used to it. Our fear was software houses would start flogging Wrap and we wanted the freedom of choice with strong back office fully integrated.

I will have to sign up for Comparator and get back with my findings, although it may be a debate for another day - I don’t want to take anything away from the success of Ascentric here. These are real concerns for us and as with most IFA's the consequences of getting it wrong for our clients will cause much grief on all fronts.

All the best

Tony

@Tony Shaw - appreciate the positive comments regarding our pricing and as ever we're more than happy to share our financials with anyone interested. Having flirted with profitability last year before choosing to pursue a more ambitious plan I'm happy to confirm that Nucleus remains on track to turn into profitability this year. Naturally as a 'single issue' business our focus is pretty keen and you can be sure we're planning to be in it for the long term.

As Transact have demonstrated for years and now Ascentric (and soon Nucleus) have begun to demonstrate, it might just be the new, thinner players that win here (all the exits to date have been by big companies with supposedly deep pockets). The economics of a platform business and wildly different to those of a legacy life company and I can't help think that to deliver a profitable, technology-led, RDR-friendly, open-architecture platform it may be better to have started with nothing at all. We'll see over time.

Cheers!

PS - re our pricing, we're simple people so we need to keep things very straightforward ;-)

Thank you Tony - good luck with your continued research and analysis. It is unfortunately a necessarily painful process! Someone from Ascentric is trying to contact you to help if possible...happy to be considered against all others - even David and Nucleus!