LSE NUC.L 2020-Report

Nucleus Financial Group plc
Annual report and

financial statements
For the year ended 31 December 2020
Registered number 05522098

Contents
Strategic report
Chairman’s statement 3
Chief executive’s report 6
About Nucleus 9
S172 Report 10
Chief financial officer’s report 14
Principal risks and uncertainties 20
Governance
Risk management framework 24
Corporate governance statement 25
Board of directors 26
Audit committee report 32
Risk committee report 34
Nomination committee report 35
Remuneration and HR committee report 36
Directors’ report 44
Directors' responsibilities statement 48
Financials
Independent auditors' report 49
Consolidated statement of comprehensive income 55
Consolidated statement of financial position 56
Consolidated statement of changes in equity 57
Consolidated statement of cash flows 58
Notes to the consolidated financial statements 59
Company statement of financial position 88
Company statement of changes in equity 89
Company statement of cash flows 90
Notes to the company financial statements 91
Company information 104
Definitions and glossary 105
2
Annual report and financial statements 2020
Strategic report
Chairman’s statement
2020 was by any measure one of the

most challenging and uncertain years in
recent memory. Dominated by the Covid-19
pandemic and exacerbated by the
continued uncertainty around Brexit, the
year ended with one of the most divisive US
presidential election campaigns contested.
By far the most disruptive and The company’s response to the

damaging, the Covid-19 pandemic has unfolding crisis at the end of March
had far-reaching consequences for last year was swift, with all staff
all. That millions of people across the working safely from home within the
globe would be required to quarantine first few days of lockdown. That was a
themselves in their home (with the more testament to the technology, systems
fortunate ones) using video technology and business continuity efforts of the
as their primary communication method entire team. On behalf of the board I
would have been unimaginable a year would like to pay tribute to everyone
ago. The ramifications of this anomalous at Nucleus who adapted so quickly to
year will play out for some time to come, ensure the business remained open
and while the world rightly celebrated and operational throughout. The fact
the scientific breakthrough of a Covid-19 that we retained our FT Adviser 5-star
vaccine at the end of the year, it is clear service award, improved our Platforum
that we have some way to go before the service ratings and increased our net
world tips back on its axis. promoter score throughout this period
demonstrates the commitment of the
Nucleus people to delivering excellent
customer outcomes come what may.
3
Strategic report Governance Financials
Given the extraordinary circumstances The second significant event was the The business’ long-term success is
of 2020, I am pleased to report a announcement in December that the reliant on the strength of its corporate
resilient financial performance for the company had received proposals culture, and the board advocates
year with net inflows of £0.7bn (2019: regarding possible cash offers for the the importance of good governance
£0.5bn) and adjusted Ebitda of £5.7m business after the company’s largest and effective systems and controls in
(2019: £7.9m) on a net revenue of shareholder, Sanlam UK Limited, supporting the executive management
£46.0m (2019: £45.2m) as we continued initiated a process to sell its stake in in their development and delivery of the
to invest in the long-term prospects of Nucleus. In February 2021 a cash offer company’s strategy. A full governance
the business throughout the pandemic. of 188p per share to acquire the entire report detailing our compliance with the
Assets under administration (AUA) issued and to be issued share capital of QCA corporate governance code, and
grew 7.9 per cent to £17.4bn despite Nucleus was announced by James Hay the work of the board and its committees
significant falls in the UK stock market Holdings Limited, backed by its owners, can be found in the corporate
during the period, with the FTSE Epiris. This offer was unanimously governance report on page 25.
All-Share Index falling 12.5 per cent recommended to shareholders by the
The company’s purpose ‘to create
year-on-year. It was also particularly board. At this point, the acquisition
value through greater alignment of
pleasing to note that customers grew to is awaiting shareholder, legal and
adviser and customer interests’ has
over 100,000 for the first time. Full detail regulatory approvals and, subject to
remained unchanged since inception
of the key financial results is contained these, is currently estimated to complete
and stakeholder engagement has
in the reports that follow. It is positive to in Q2 2021.
long been a key element. The Section
see continued growth across many of
Following completion, it is intended 172 statement on pages 10 to 13 sets
our key performance indicators (KPIs)
that the existing business activities of out how the board has engaged with
including growth in assets, net inflows,
Nucleus and James Hay will continue key stakeholders to better understand
revenue, customers and advisers using
within the combined group and merge stakeholder needs throughout the year
the platform.
over time. The coming together of and how this engagement has informed
The year ended with two further these two businesses represents an key decisions.
significant events, both a little closer opportunity to create a leading financial
Should the acquisition by James Hay
to home. Firstly, the acquisition of planning and retirement-focused
Holdings proceed as planned, the
the UK business and assets (as they platform with c£45bn of AUA.
existing non-executive directors – Tracy
pertain to Nucleus) of OpenWealth,
Dunley-Owen, Margaret Hassall, John
a business process outsourcing
company providing account servicing Governance Levin, Jonathan Polin, Alfio Tagliabue
and myself - will step down on
and administration. This acquisition The company has adopted the Quoted completion.
sought to allow the business to increase Companies Alliance (QCA) corporate
control over its processes, service and governance code, and the board
product development. The acquisition reviews the company’s compliance
completed in December and is expected with this on an annual basis. Board
to be earnings enhancing in 2021 and composition remained broadly
increasingly accretive thereafter. unchanged throughout the financial
year, save for the appointment of
Alfio Tagliabue in February 2020 who
joined as one of Sanlam’s two board
representatives to replace Jeremy
Gibson. I remain confident that the
breadth of skills and the depth of
experience we have on the board
provide equal measures of support and
appropriate challenge to the company’s
strategic direction.
4
Culture and people Outlook Market commentators Fundscape

project a ‘realistic’ assumption of 12 per
Given the challenges thrown at us all The business has adapted well to the cent compound annual growth for the
during this most troubling of years, the unprecedented change to the way we market over the next five years, taking
business has done extremely well to live and work as a consequence of the total assets to £1.3 trillion by 2025. With
keep culture and its people at the top of Covid-19 pandemic, and many of these the retail advised sector making up 63
the agenda. changes will likely endure for much of per cent of the overall market projection,
the year ahead and beyond. our sector’s future looks assured.
Culture, values and engagement have
been central to Nucleus’ success over While there remains much uncertainty Against one of the most challenging
the years, and this year has been no regarding the pandemic, the rollout economic backdrops of recent times,
exception. Our focus on ensuring our of the vaccine in the UK, the signing I am pleased with the company’s
people’s care while working remotely of a UK-EU Trade and Cooperation financial performance over the past
has had a positive impact reflected in our Agreement and the transition of year. While the longer-term economic
people engagement scores where we presidential powers in the US have consequences of the pandemic
saw a 7 per cent uplift to 81 per cent. done much to ease market uncertainty. are unknown and the James Hay
We have seen early and encouraging acquisition is not yet approved,
The business welcomed an additional
signs of recovery in investor confidence, Nucleus’ recurring fee income model
130 people (114 employees and 16
with Nucleus recording a 35.9 per and strong balance sheet give the
agency contractors) into the fold at the
cent increase in net inflows in the last board confidence in the company’s
end of the year with the acquisition of
quarter of the year compared to the ability to deliver on its future plans.
the relevant assets of the OpenWealth
same period in the previous year and
business and this is already reaping Finally, on behalf of the board, I would
a 152 per cent increase on the previous
many rewards with improvement in like to offer my gratitude to all of
quarter (Q3 2020). This very positive
communication and service levels. the people at Nucleus, whether you
momentum has continued into the early
weeks and months of the new year, with have chosen to be with us or have
Dividend net inflows of £69m in January 2021 newly joined the business as part of
representing an 11.3 per cent increase the OpenWealth acquisition, for your
After having decided not to recommend on the previous year (January 2020: exceptional work, dedication and
a second interim dividend in 2019 as a £62m) and the team is confident they fortitude under very uncertain and
consequence of the board’s belief that can build on this. trying conditions. While there remains
the downside risk of Covid-19 had not some future uncertainty, I am confident
reduced sufficiently, the board did resolve the determination you have shown to
to pay an interim dividend in October get Nucleus to this point will carry you
2020 of 1.0p per share, in line with our through to future success.
dividend policy. Given the proposed
acquisition of the business, the board
has resolved not to recommend a final
dividend relating to the financial year
ending 31 December 2020.
Angus Samuels
Chairman
5
Strategic report
Chief executive’s report
Since last year’s report, Covid-19 has had an

extraordinary impact on our lives, financial
markets and global systems. 2020 was
simply a year like no other and that makes
me especially proud of the material progress
achieved over the period.
Our people and their welfare are bigger story where we can create a
always in focus and never more so leading independent platform of scale
than when Covid-19 hit. I was moved to with a high tech, high touch proposition
see everyone adjusting so brilliantly to and philosophy. I think the combination
maintain our online and offline services, of our people’s talents and the size of
to develop new digital services and to the opportunity can see us carefully
achieve a successful soft launch of IMX, navigate the roadmap to deliver on this
our new model portfolio service. Overall, collective medium-term goal.
their efforts led to a 42 per cent increase
Regardless of our ownership, I hope we
in net inflows, a 4 per cent increase
are able to build on the successes of last
in new customers and closing AUA of
year and the positive momentum we
£17.4bn.
have enjoyed in early 2021 which has
Toward the end of the year, we were resulted in us now being responsible for
able to reach agreement with Genpact £17.8bn of AUA.
to acquire the business and assets of
OpenWealth as they pertained to our
business, giving us greater control over Operational performance
our operations, more flexibility over Inflows began the year strongly as
product and service improvements and investor sentiment improved following
a transformational outlook for margins the decisive general election result and
as we grow AUA. our Q1 net inflows were up 100 per
Overall, we closed the year with our cent over the previous year, a marked
highest ever net promoter score, improvement that would have been
our best ever people engagement better still were it not for the onset of
score and were awarded CoreData’s the pandemic in March. Adviser and
‘best medium platform’ for the ninth customer activity slowed materially
successive year. through Q2 before beginning to recover
through Q3 and then accelerate through
Since the close of the financial year Q4. Overall we increased our market
(and following a process initiated by share of retail advised net inflows
our majority shareholder), the board from 2.3 per cent to 2.9 per cent, and
has recommended a cash offer to these were up 42 per cent over 2019, a
shareholders from James Hay Holdings good result in the circumstances even
valuing the company at £144.62m. if our pre-pandemic expectations had
Becoming part of this enlarged group been greater. Outflows continued to
gives Nucleus a key role in a much fall through the year, a positive trend
exacerbated by the pandemic.
6
We had another strong year on Financial performance Our people

product development and operations,
and dividend The resilience of our systems and our
responding quickly to working from
home and adapting processes in March Our 2020 profit was impacted by three people allowed us to make a prompt
and delivering notable enhancements, pandemic-driven themes. and seamless move to working from
including the delivery of digital home and throughout the rest of the
Firstly, income was hit by the fall year almost all of us worked from our
signatures, better tax reporting, phased
in markets (and AUA) and despite kitchens, lounges and spare rooms.
drawdown automation and enhanced
the subsequent recovery and our I am indebted to the way in which
bulk tools through the year.
improvement in inflows, net revenue everyone responded, a sentiment that
We also entered into a long-term was only marginally up to £46.0m. extends to the 154 new colleagues we
agreement to move the hosting of the Secondly, we benefitted from substantial welcomed in the course of the year,
platform into the cloud. This work will savings in some cost lines, especially including the 130 who joined us through
be carried out in collaboration with our in travel and entertainment, marketing the OpenWealth transaction.
long-term partners Bravura Solutions and recruitment fees. Thirdly and
and is expected to result in our platform perhaps most significantly, we made We made substantial effort to ensure
being hosted in AWS by the end of a clear and early decision to continue the wellbeing of our people through
this year. This infrastructure change to invest through the pandemic and the difficult circumstances and continue
is expected to improve our flexibility, while this has contributed to improved to encourage our leaders to monitor
resilience and scalability. user sentiment (and outlook) it had a this area closely as the impact of the
predictably negative impact on profit in pandemic and lockdown wearies
We also achieved a soft-launch of us all. We now operate a ‘work from
the short term. I am entirely comfortable
IMX, our new model portfolio service anywhere’ policy and will continue with
this was the right decision and although
which aims to improve the probability this model post-pandemic expecting
adjusted Ebitda was down 27.9 per cent
of customers achieving their financial perhaps 40-50 per cent of working time
to £5.7m, most of that was achieved in
goals. We have partnered with Hymans to be spent in one of our offices in the
H2 during which we outperformed our
Robertson to engineer a product which medium term.
expectations.
promotes better alignment between
customer goals and the way portfolios Following last year’s decision to not We continue our controlled shift toward
are constructed and the combination recommend a final dividend in respect technology roles and by the end of the
of low costs and this more personal of 2019, we were pleased to reinstate year, 85 per cent of our 384-strong team
approach has been well received. our dividend with an interim 2020 were involved in product management,
payment made in October. Our capital platform operations or directly servicing
Sector pricing trends are developing our audience.
position continued to improve through
broadly as expected with larger adviser
H2 and I suspect that we may have Following a restructure of the
firms continuing to exert pressure on
revisited the 2019 dividend had our executive team and some other
behalf of their customers. We have
capital requirement not increased by a senior management changes, I am
refreshed our pricing strategy and
broadly-equivalent amount following sorry to say that our gender pay gap
developed a new enterprise sales
the OpenWealth acquisition. In light widened for the upper pay quartile.
channel to target larger firms (including
of the recommended offer by James This is regrettable and is being actively
IFA consolidators) and have now
Hay Holdings, no final dividend will be addressed with new focus with a view
established two new relationships
recommended in respect of 2020. to improving our performance in this
(one since the end of December) and a
pipeline of other potential opportunities. important area.
In addition to securing our latest Prior to the announcement of the

CoreData award, we received an potential change to our ownership,
FT Adviser 5-star service award, overall people engagement was
posted successive and substantial at an all-time high with 93 per cent
improvements in our Platforum ranking considering themselves proud to
and landed a highly commended work here. There has been a notable
second place at the Schroders platform improvement in service since the
of the year awards. OpenWealth transaction completed
and I hope this will be maintained. We
achieved all the objectives detailed in
our people strategy and continue to
invest in learning and development to
support the growth of the business.
7
Although perhaps not really ‘our people’ We have now completed the reshaping
I also remain grateful to the members of our operating model and subject to
of our advisory board, platform any changes that may be triggered by
development group and regional a change in ownership I believe we are
practice development groups – the very well positioned for further growth.
individual and collective input is greatly The combination of our online product
valued. I will also take this opportunity and offline service is increasingly
to thank Mike Seddon who has chosen competitive and the inflow momentum
to step down as chair of our advisory we expect from our core and enterprise
board for all he has contributed in audiences is expected to deliver the
various roles (including on the main scale that is required to expand our
board) over the years. operating margins from what is now
a largely fixed cost base. Pricing
Last and far from least we were terribly
pressure is expected to continue (and
sorry to lose our much-loved friend
perhaps accelerate) but the shape of the
and colleague Mike Wallis to MND. He
organisation and the scalability we’ve
remains greatly missed.
achieved through automation mean we
are well-prepared for that challenge.
Climate change Our combination of agility, scalability
We recognise the threat posed by and resilience should allow us to
climate change and our responsibility to continue to improve the sentiment of
help the UK transition to a low-carbon existing users and to grow our user
economy and also believe that action in base. This can then be expected to
this area is an important consideration accelerate inflow growth, adding
for our people and our attractiveness to AUA and driving future revenue
as an employer. It is our intention to growth. The operational gearing in the
address these challenges by adopting business model is expected to result in
and promoting low-energy technologies a substantial majority of revenue growth
and working practices, and to help falling through to profit, and margins
hold other organisations to account can be expected to grow further if we
through more transparent reporting and are able to achieve scale with IMX.
particularly through the climate-related The regulatory environment for adviser
elements of our IMX investment beliefs. platforms remains benign although the
ongoing scrutiny of the advice and asset
management sectors may trigger a
Strategic development
need for us to respond. We also expect
and outlook to have to make product changes
The advised platform sector remains triggered by the review of the UK tax
buoyant and our important role system and by Brexit. The scope of these
in improving value for money for remains unclear but we expect to be
customers remains as valid as ever. able to meet any new requirements in a
The market remains competitive with timely and cost-effective manner.
a combination of established and new
participants and there is a growing
trend toward consolidation. This has
been building for a while but we have
only recently seen the first transactions
where profitable platforms are being David Ferguson
acquired. Scale is becoming an Founder and chief executive
important sectoral consideration but we
continue to see scalability and value for
money as equally important medium/
long-term drivers of success.
8
Strategic report
About Nucleus
Nucleus is an independent Our purpose Accountable
wrap platform that allows Our purpose has been clear and We own solving problems and our
consistent since our inception and customers, people, stakeholders and
customers to hold all of their our regulator can rely on each of us to
that is to create value through greater
pensions, Isas and other alignment of adviser and customer be disciplined and take responsibility.
investments in one secure interests. We collaborate, while delivering as
individuals, overcome challenges and
place online. see things through on time. Being
Our values accountable means we are reliable;
We were founded in 2006 and built in we trust each other to deliver and enjoy
collaboration with financial advisers Our values are aligned to our purpose
autonomy.
committed to altering the balance and provide the foundations that
of power in the industry by putting support, shape and unify the culture
the customer centre stage. We work of our business. Together they are a Authentic
with more than 1,400 active financial core part of our identity and provide
We are all human, this gives us the
advisers from more than 860 financial the framework for how we engage
opportunity to be ourselves, do our
advice firms as at 31 December with our people, our users and our
best work and deliver value for our
2020. We are responsible for AUA of customers and how we drive value for
customers. Being authentic is being
£17.4bn on behalf of more than 101,000 our shareholders.
honest, respectful, having ‘adult-to-
customers. Naturally, these values align with the adult’ relationships and not shying away
The platform offers a range of custody, principles of our regulator. from candid conversations.
trading, payment, reporting, fee-
handling, research and integration Energetic
services across a variety of tax
wrappers and more than 6,500 asset We are proactive, innovative and
choices including cash, OEICs, unit tenacious. It’s about driving our business
trusts, offshore funds, structured forward and making a difference for our
products and listed securities, including customers and our people. We balance
ETFs and investment trusts, and our drive to change the future with being
currently facilitates over 1.1 million accountable for delivering every day.
customer account transactions on
average per month. Inspiring
We think big, act small and are humble.
We’re always looking to make life better
for our customers and our people. We’re
relentlessly curious, always learning and
developing, pushing boundaries and
finding better ways, for ourselves and
our customers.
9
Strategic report
S172 report
Our strategic decision making Case study one IMX is underpinned by a number of
investment beliefs, one of which is
is driven by a desire to fulfil responsible investing. Environmental,
Nucleus IMX (“IMX”) launch
our purpose, aligned to our Social and Governance (ESG)
As reported in our 2019 annual report considerations are integrated in our
values, our policies and our and financial statements we planned to investment and monitoring processes
overall attitude to risk. launch IMX, a discretionary managed and are a key factor in selecting fund
portfolio service, in 2020. We wished managers for IMX portfolios. Moreover,
A key input to any strategic decision to create a service delivering value for our responsible investing approach will
is its impact on our stakeholders. In money, take an outcome-led approach adapt as the industry evolves with new
addition to the stakeholder specific to investment management, and products and tools becoming available.
outcomes set out on the next couple empower our advisers by helping to
of pages, the case studies below improve the alignment between their
provide two examples of how the clients’ goals and their investments. The Case study two
board took its duties set out in s172(1) of board approved the full launch of IMX
the Companies Act 2006 into account in December 2020 following a period of Acquisition of certain assets of
during the course of 2020. soft launch, which enabled collaboration OpenWealth
with a number of onboarded advisers
As directors, we are obliged to fulfil our On 2 November 2020 we announced
to refine the proposition ahead of full
codified directors’ duties under section to the market that we had entered
launch. We believe the development
172(1) (a)-(f) of the Companies Act 2006, into a binding agreement to acquire
and deployment of IMX to be a clear
and in taking decisions, ensure that we certain assets of Genpact Wealth
strategic example of our values and of
promote the success of the company for Management Limited (which operated
how we are working to achieve greater
the benefit of its members as a whole. under the trading name OpenWealth)
alignment of adviser and customer
as they pertain to the group (the
We acknowledge that this involves interests.
“Acquisition”). The Acquisition completed
both judgment and process. We have The IMX journey had stakeholder on 10 December 2020 representing the
created a number of forums to facilitate engagement at its core. The board achievement of a key strategic objective
and engage the views and expectations approved the establishment of an for 2020 and a step in our journey to
of our stakeholders and seek to ensure investment committee in late 2019 increase control over our processes,
we can demonstrate how their views, comprising two external independent service offering, hosting of key
as well as the long term consequences, members to provide challenge and applications and product development.
are taken into account in our strategic guidance to IMX development. This
decision making. Prior to the deal being agreed there
committee continues to operate
were a number of consultations carried
We consider our key stakeholders and engage with our investment
out with key stakeholders. Vendor
to be our customers, our platform consultant, a key supplier, as part of
meetings were setup to ensure a
users, our people, our shareholders, IMX governance, providing oversight
seamless transition of both service
our suppliers, our regulators, our of IMX investment and management
and license novation, assessment
community, environment and wider activities. A board workshop was carried
workshops covering planning and
society. The Covid-19 pandemic has out in early 2020 to ensure that board
impact analysis were conducted with
brought unprecedented change to input was incorporated into the IMX
our material vendors and management
the way we all live and work and, as design. The board received feedback
meetings were completed to assess the
announced by the company back in from the IMX team who had consulted
impact on staff and morale leading up
March 2020, the company’s highest with advisers to understand how we
to completion. Staff engagement also
priority would be and continues to be could better their clients’ journey, our
commenced prior to the deal being
the health and wellbeing of its people, investment consultant on portfolio
completed with TUPE consultations and
users and customers. We have captured creation, our regulator and external
cultural alignment sessions taking place.
what matters most to each of our lawyers to ensure all regulatory, legal
stakeholders, how we engage with and compliance obligations and The regulator was updated at the key
them and how we have responded to expectations were met. milestones over the year. The board
their needs during this unprecedented received feedback and updates on
time on the following pages. interactions to ensure stakeholder
expectation and requirements were met.
10
S172 report
We believe that the Acquisition will Stakeholders Platform users

deliver long term value to all our
What matters most:
stakeholders. It is expected to be Customers
earnings enhancing in 2021 before
What matters most: • Connection to customers’ needs
becoming increasingly accretive
thereafter benefitting shareholders. It • Continuous technology and
• Transparency and simplicity proposition developments
will help us to further accelerate our
product development and automation • Fair pricing • Dependable and consistent service
programme benefitting customers
• Quality of service standards
and users, allow for implementation
of a scalable hosting solution and • Security of assets • Cost-effective platform
enhance offline services for our users.
• Outcomes • Clear guidance and thought
Our integration programme has
leadership
been designed to assist our people
How do we engage:
and facilitate the transition of new
How do we engage:
employees to the group, move to a
• Bi-annual investors in customers
new office in Glasgow and rationalise
surveys • User sessions
technology hosting and applications.
Together we aim to enhance our user • Face to face meetings or events via • Platform development group
experience and help to realise our goal virtual meeting providers • Practice development group
of achieving a market leading proposition
• Dedicated client relations team • Advisory board
for our customers. We believe that
the Acquisition will help unlock further • Clear communications • Dedicated account managers and
potential in our continuing efforts to
business development team
carry out our purpose of creating value How did we respond:
through greater alignment of adviser and • Regular Illuminate events
customer interests. • Continued embedding our updated • Thought leadership platform
conduct framework to ensure all
our people are focused on creating How did we respond:
good customer outcomes
• Maintaining online and offline • Delivered a major propositional
service levels throughout the release delivering key propositional
pandemic, retaining a 5-star service changes such as a bulk rebalance
rating at the 2020 Financial Adviser rebuild and phased investment
Awards and achieving improved enhancements.
Platforum service ratings and our • Developed and launched Nucleus
best-ever net promoter score IMX, a discretionary managed
• Adapted to meet customer portfolio service
and adviser needs, evolving to • Embedded our strategy to
accept scanned documents and consider alternative product and
e-signatures. pricing structures for larger scale
opportunities, including completing
our pricing review.
• Achieved a major strategic objective
of acquiring certain assets from
OpenWealth.
• Converted all face-to-face user
events to online without loss of
engagement or support.
11
S172 report
Our people How did we respond: Suppliers

What matters most: What matters most:
• By taking a people first approach to
our Covid-19 response, reviewing
• Making a difference for our • Commercial relationship
flexible working and building
customers
leadership capability to support and • Trusted partnerships
• Autonomy, coupled with clear monitor the wellbeing of our people
• Strong governance
expectations and boundaries as we settle into a distributed way of
working • Clear communications
• Having opportunities to grow and
progress • Maintaining productivity and • Our input into their service delivery
engagement during the Covid-19
• Being fairly rewarded for their
– working proactively to create How do we engage:
contributions
a sense of stability, safety and
• Knowing that their voice is heard community for our people with • Regular service reviews
initiatives such as wellbeing
• Feeling alignment between • Clearly documented vendor
Wednesdays and highlighting the
company and personal values management onboarding and
roles of our mental health first aiders
maintenance policies and practices
How do we engage: • Successful TUPE and culture first
• Annual due diligence reviews
integration of Genpact OpenWealth
• Regular updates from the people colleagues – resulting in 46 per cent • Collaborative engagement
and development team on Covid-19 increase in headcount. Building
and our wellbeing approach leadership capability to support How did we respond:
delivery and alignment between
• Regular surveys
people and customer experience • Identified relationship managers
• Fortnightly all company briefing across all key suppliers
• Delivered against our people
sessions and bi-annual strategy
strategy to create the workforce for • Reviewed effectiveness and
updates led by our CEO and his
the future embedding of our vendor
executive team
management suite of policies.
• Maintained a charity committee
• Culture champions in each team
which supported initiatives • Agreed a definitive sale agreement
• Board member responsible for with Genpact, created a clear
representing employee voice position with regards to historic
liabilities and entered into a
• ‘Ask me anything’ lunch with the
definitive TSA that established the
executive team for new joiners
mutual responsibilities of the parties
for a limited period
• Extended the agreement with
Bravura Solutions for a further two
years including addition to hosting
services
12
S172 report
Shareholders Regulators Community, the environment and

wider society
What matters most: What matters most:
What matters most:
• Compelling business model and • Understanding and adhering to
growth story the principles and rules of the FCA • Actively supporting local
Handbook communities
• Stability, resilience and ability to
scale • Open and transparent • Recognising the threat posed
communication by climate change and our
• Reliable returns
responsibility to help the UK
• Demonstrating good conduct
• Investing in our talent and transition to a low carbon economy
succession • Acting in our customers best
• Providing jobs and investment
interests
How do we engage:
How do we engage:
How do we engage:
• Investor roadshows twice a year
• Support employment and
• Members of the UK platform
• 1-2-1s with institutional shareholders apprenticeship schemes with
development group
graduate coding schemes.
• Ongoing dialogue with analysts
• Direct communication via our chief
• Engaging in charitable activities
• AGM and regular disclosures risk officer and compliance lead
• Promote low-energy technologies
• Consultations and policy statements
How did we respond: and working practices
How did we respond:
• Reported quarterly on trading and How did we respond:
AUA
• Direct engagement with the FCA
• Set up a charity committee which
• Communicated the acquisition of platform team
supported initiatives raising over
certain assets from OpenWealth
• Embedded our SM&CR £67,000 for MND Scotland
• Preserved capital during the documentation and policies and
• Sponsored and attended Lean Agile
Covid-19 pandemic preparedness for our transition to an
Edinburgh meet-ups
enhanced firm in 2021
• Held more than 40 meetings
• Adopted ESG investing as part of our
with shareholders and potential • Operated our conduct group as an
Nucleus IMX proposition
shareholders throughout the year established part of our governance
framework
• Reviewed conduct in our 2020
compliance monitoring plan
13
Strategic report
Chief financial officer’s report
In a year that was dominated by the

Covid-19 pandemic, Nucleus’ financial
performance proved resilient.
After the Covid-19-induced slow down over the spring and summer, net inflows recovered
strongly in Q4 and AUA rose in line with the recovery in global markets to end the year at
£17.4bn. Similarly, underlying profitability, which was negatively impacted in H1 by the sharp fall
in market levels, increased steadily towards the end of the year, with the company now well-
positioned to grow its operating margin off an increasingly fixed cost base.
Financial key performance indicators
Year ended Year ended Year ended Year ended Year ended
December 2020 December 2019 December 2018 December 2017 December 2016
Group £'000 £'000 £'000 £'000 £'000
AUA¹ 17,415,185 16,141,279 13,883,713 13,576,703 11,143,757
Gross inflows¹ 1,829,389 1,941,712 2,290,236 2,607,759 1,854,830
Net inflows¹ 722,765 509,444 1,193,502 1,668,237 970,263
Revenue 51,809 51,517 49,405 45,462 37,483
Net revenue¹ 45,974 45,234 43,154 39,361 32,407
Adjusted EBITDA¹ 5,711 7,923 8,304 6,248 5,141
Profit for the period after tax 3,178 5,953 4,756 4,111 3,387
Dividend paid 760 3,873 3,933 4,813 nil
Adjusted EBITDA margin¹ 12.4% 17.5% 19.2% 15.9% 15.8%
¹ Industry-specific financial performance measures. Included within this results announcement are alternative measures that the directors believe help to inform the
results and financial position of the group.
14
Financial review
Year ended Year ended
31 December 2020 31 December 2019
Group £m £m
Opening AUA 16,141 13,884
Inflows 1,829 1,941
Outflows (1,106) (1,432)
Net inflows 723 509
Market movements 551 1,748
Closing AUA 17,415 16,141
Average AUA 15,885 15,180
Year ended Year ended

31 December 2020 31 December 2019
Group £'000 £'000
Revenue 51,809 51,517
AUA related fees paid (5,835) (6,283)
Net revenue 45,974 45,234
Other income 74 105
Total operating income 46,048 45,339
Staff costs (16,593) (14,590)

AUA related costs (10,368) (10,197)
Other direct platform costs (4,087) (3,389)
Platform development costs (3,046) (2,948)
Other costs (6,243) (6,292)
Adjusted EBITDA* 5,711 7,923

Depreciation* (583) (667)
Amortisation (22) -
Adjusted EBIT 5,106 7,256
Interest income 40 80
Interest expense* - (2)
Adjusted profit before tax 5,146 7,334
Other non-operating income 13 17

Exceptional items - OpenWealth acquisition fees (217) -
Exceptional items - James Hay Holdings offer fees (113) -
Share-based payments (799) (349)
Statutory profit before tax 4,030 7,002

Taxation (852) (1,049)
Statutory profit after tax 3,178 5,953
Adjusted profit after tax 4,168 5,941

Basic EPS 4.2p 7.8p
Adjusted EPS 5.5p 7.8p
Blended revenue yield (bps)** 28.9 29.8
Adjusted EBITDA margin 12.4% 17.5%
* Adjusted EBITDA excludes non-operating income, exceptional items and share-based payments and includes ROU asset depreciation and ROU lease liability interest.
It is included within the strategic report as the directors believe this is a better representation of the underlying performance of the business.
** Blended revenue yield is calculated by dividing annualised revenue over average AUA.
15
Revenue The trading environment in Q1 2021 The impact of the transaction is a shift
to date remains uncertain, with out of AUA-related costs and into staff,
Having opened the year at £16.1bn, AUA expectations of a post-pandemic other direct platform and other costs
continued to increase in the first quarter recovery being tempered by the risk (although less than one month of these
on the back of relatively stable market associated with bringing the virus under costs were incurred in the year under
levels and recovering net inflows. control and the enormous economic review) and results in the cost base of
This positive momentum reflected the cost associated of the pandemic to date. the group becoming increasingly fixed
rebound in investor sentiment post the in nature.
general election and Brexit withdrawal Average AUA, which increased by 4.6
agreement, as well as a number of per cent over the year from £15.2bn In the year under review, staff costs
Nucleus-specific factors, such as the to £15.9bn, captures the impact of increased by 13.7 per cent from £14.6m
continued growth of some of our largest market volatility throughout the year. in 2019 to £16.6m in 2020. Full-time
supporting IFA firms, the development As Nucleus’ revenue accrues on a daily equivalent permanent headcount
of a number of new relationships and basis, average AUA is a better indicator increased from 236 to 356 over the year,
a sustained period of service and of top-line growth and compares to of which 113 transferred to the group
proposition delivery. growth in net revenue for the year of from Genpact in mid-December. The
1.6 per cent (from £45.2m in 2019 to balance of the increase in employee
After the very positive start to the year, £46.0m in 2020). The lower rate of numbers represents net recruitment into
which saw net inflows of £268 million growth in net revenue resulted in a the business, principally in technology
increasing by 100 per cent on the same blended revenue yield for the year of and change-related roles. With the
quarter of the prior year, markets and, 28.9 basis points (2019: 29.8 basis OpenWealth acquisition now complete,
as a consequence, AUA fell sharply points), with the decrease being mainly we expect total staff numbers to
towards the end of March as the due to the existence of improved terms stabilise and that, within the overall
Covid-19 pandemic hit. Although markets for a small number of large adviser headcount, there will be a continued
recovered much of their losses over the groups. increase in technology-related roles and
next two quarters, it was not until the final a reduction in certain operational roles.
quarter of the year that the development
of a Covid-19 vaccine, resolution of the US Costs AUA-related costs, comprising
presidential elections and the expectation principally the fees paid to Genpact (for
The most important event of the administration services) and Bravura
of a UK-EU trade deal pushed investor
year from a cost base perspective Solutions (for the licence of Sonata)
sentiment, market levels and AUA above
was the completion, in December, increased by 1.7 per cent from £10.2m in
the level seen at the start of the year.
of the transaction with Genpact. This 2019 to £10.4m in 2020, at an average
The year ended strongly, with AUA resulted in the termination of the wrap cost of 6.53 basis points (2019: 6.72
closing at £17.4bn, a net increase of 7.9 administration services agreement basis points). This overall result includes,
per cent over the prior year, compared (and hence the AUA-related fees up until the date of completion of the
to a decrease in the FTSE All-Share historically payable to Genpact), the OpenWealth transaction, a lower level of
index of 12.5 per cent over the same transfer of 130 employees (including ‘fixed discounts’ that formed part of the
period. The £1.3bn increase in AUA 16 fixed-term contractors) to Nucleus, Genpact contract renegotiation in 2018,
reflects the impact of the market fall and the transfer of a number of contracts offset to some extent by the impact of
subsequent recovery (£0.5bn), as well and licences required to service the service credits. Looking forward, this
as net inflows for the period of £723m, acquired operations, and the entering category of costs will be substantially
which, whilst a 42 per cent uplift on into of a transitional services agreement less significant in amount and we may
2019, were unsurprisingly reflective of with Genpact, under which Genpact look to integrate it within other direct
the volatile external environment. As will continue to provide hosting and platform costs in future reporting.
such, the full year’s result consisted production support, IT and office
of the very positive first quarter, the services to Nucleus for a limited period
Covid-19 impacted Q2 and Q3, and of time.
the encouraging recovery in the final
quarter.
16
Other direct platform costs increased Operating margin Profit before tax
from £3.4m to £4.1m, primarily as a
result of 2020 including the full-year Our operating margin (as reflected by Adjusted profit before tax decreased
costs of platform hosting and platform- the adjusted EBITDA margin) decreased by 30 per cent over the previous
related printing and posting. This from 17.5 per cent in 2019 to 12.4 per year, reflecting a similar result to the
increase in costs remains consistent cent in 2020, primarily as a result of operating margin above. Statutory profit
with guidance given previously and lower than expected revenue (as a before tax, meanwhile, decreased by
represents an increase in the fixed result of the external environment’s 42 per cent to £4.0m, as a result of the
cost base of the group since August impact on markets, inflows and incurrence of £0.3m exceptional items
2019. Platform hosting services will therefore AUA), whilst the cost base of (relating to the OpenWealth acquisition
continue to be provided by Genpact the group remained largely in line with transaction costs and the costs incurred
(on the same cost basis) under the our expectations, except to the extent in 2020 in relation to the process that
transitional services agreement with that individual cost lines were directly led to the announcement in February
them until Nucleus completes its impacted by the pandemic. by James Hay Holdings of its offer to
planned migration to a more flexible acquire the company) and a higher
We took the decision, at the start of
and modern cloud-based solution, charge for share-based payments of
the pandemic, to continue to execute
expected towards the end of 2021 or the £0.8m.
on our strategy of investing in our
beginning of 2022. The balance of other platform and people should the external
direct platform costs relates to surround environment not deteriorate to such Taxation
platform licence fees, bank charges an extent that mitigating actions were
and compensation costs. These costs deemed necessary. The lower operating The group’s effective tax rate of 21.1 per
decreased from £2.3m in 2019 to £1.8m margin (which was 9.6 per cent in H1 cent (2019: 15.0 per cent) incorporates
in 2020, mainly as a result of lower than 2020 and 15.1 per cent in H2 2020), the impact of expenses that are non-
expected compensation costs. demonstrates the increased operational tax deductible of £0.2m (2019: £0.1m).
leverage that is now present in the These costs relate primarily to the
Platform development expenditure of
business, in particular subsequent to OpenWealth acquisition and other costs
£3.0m was in line with our expectations,
the OpenWealth transaction and the incurred by the group in 2020 relating
prior year and our stated plans. The
earlier restructuring of the contract with to the offer to acquire the company. The
positive momentum established in
Genpact, and this operational leverage prior year’s effective tax rate, which was
this area of our business means that
should translate into a higher operating lower than the standard 19 per cent
we intend to target similar levels of
margin when and to the extent that rate, benefitted from the inclusion of
expenditure on platform development
market levels recover and then increase. qualifying research and development
in future years, and may even look to
(R&D) expenditure under the SME R&D
accelerate this over the next 18 months Similarly, adjusted EBITDA decreased scheme, for which the group qualified at
should market conditions stabilise. by 28 per cent from £7.9m to £5.7m, a the time.
Other costs of £6.2m decreased result we consider to be resilient given
marginally for the second year in a row. the abnormal trading environment and
These costs, which include the overhead the continued investment in the
costs of the operations acquired from business, and we continue to anticipate
Genpact from mid-December, were an operating margin in excess of 20 per
positively affected by the reduction of cent in 2022.
expenditure in some areas as a result
of the Covid-19 pandemic (such as
recruitment, travel and entertainment
and marketing) and negatively affected
in others (for example, materially
higher FCA and FSCS levies), but
otherwise were generally in line with our
expectations.
17
Dividend
At the time of release of our 2019
Dividend
results and in light of the exceptional
uncertainty caused by the Covid-19
pandemic, the directors decided, in the 2020 2019
interests of prudence, not to recommend financial financial
a final dividend for the year ended 31 year year
December 2019. At the time of release £’000 Pence £’000 Pence
of our 2020 interim results, we reported
that the directors did not believe that the
Interim dividend 760 1.0 1,139 1.5
downside risk of Covid-19 had reduced
sufficiently to declare a second interim Final dividend - - - -
dividend in respect of the 2019 financial Combined dividend 760 1.0 1,139 1.5
year at that stage. Pay-out ratio 18.2% 19.2%
However, the directors did resolve to pay
a 2020 interim dividend of £0.8m (or 1.0
pence per share) in October in line with
our dividend policy.
This compares to dividends paid in
the prior year of £3.8m, comprising Financial position
a final dividend in respect of the 2018
financial year in June 2019 of £2.7m (or 31 December 31 December
3.6 pence per share) and an interim 2020 2019
dividend in October 2019 of £1.1m (or Group financial position £’000 £’000
1.5 pence per share).
Given the proposed acquisition of the Intangible assets 2,258 253
business, the board has resolved not to
recommend a final dividend relating to Right of use lease assets 3,026 3,476
the financial year ending 31 December
2020.
Cash and cash equivalents 17,546 18,525
Cash flow Lease liabilities 3,737 4,212

We continue to achieve a high
conversion rate of operating profit to Net assets 22,731 19,706
cash before payment of dividends
and investing activities. Whereas the
group did not pay a final 2019 dividend Capital adequacy ratio 15.1% 19.7%
in the first half of the year, the timing,
nature and scale of the OpenWealth Excess capital - above 8%
acquisition, together with the improving regulatory requirement 9,621 11,424
Covid-19 impacted operating
environment in the second half of the
year, meant that the headline £1.5m
OpenWealth acquisition was financed
using internal resources in December,
and a 2020 interim dividend of £0.8m
was paid in October.
18
Financial position The group’s capital requirements are However, as set out in note 34. events
reviewed on a quarterly basis and are after the reporting period below, the
Nucleus continues to be funded also subject to periodic stress testing group is the subject of an all cash
entirely by equity capital and has no to evidence that its regulatory capital offer from James Hay Holdings that,
borrowings, save for in respect of the requirements can continue to be met in if successful, is expected to complete
lease of our Edinburgh headquarters, a range of stressed scenarios (including in the next 12 months. Whereas the
which is recognised as a lease liability macro-economic shocks, company- directors note the intentions of James
under IFRS16 Leases. specific shocks and a combination of Hay Holdings as set out in the Scheme
Intangible assets increased over the simultaneous internal and external circular and whereas they do not have
course of 2020 and now comprise the shocks). The output of the stress testing any reason to believe that James
costs incurred in the development and is subject to a set of mitigating actions, Hay Holdings would not continue to
licencing of Nucleus IMX (recognised in applied as appropriate to each scenario. support the group and company or
accordance with IAS38) and goodwill In all scenarios incorporating a significant would materially change their activities
arising from the OpenWealth acquisition. shock to financial markets, the nature in the next 12 months, they are not
of Nucleus’ revenue (ongoing annuity- party to the detailed intentions of
All surplus capital not required for type revenue derived from asset classes the acquirer. Although this does not
working capital purposes continues that are not equally correlated to equity change the directors’ conclusion as to
to be held in cash and is governed by markets) acts as an inherent mitigant. the appropriateness of preparing the
an embedded capital management financial statements of the group and
policy. At the end of the financial year, The group’s robust capital structure,
the company on a going concern basis,
the group had £17.5m of cash and solvency position, high conversion
it is considered to create a material
cash equivalents, representing 77.2 rate of profit to cash, no borrowings
uncertainty which may cast significant
per cent (2019: 94.0 per cent) of the and available liquidity mean that it
doubt on the group and company’s
group's net assets. In addition, the remains well-positioned to absorb the
ability to continue as a going concern,
group has retained access to a £5.0m impact of a sustained collapse in equity
and the financial statements contain
uncommitted overdraft facility from RBS markets. In consideration of the ongoing
disclosures to this effect.
International that remains undrawn and uncertainty in relation to Covid-19, the
has not been accessed for the last four group will consider and implement
years. identified mitigating actions should
these be required (including in respect
At the end of the financial year, the of expense management and dividend Stuart Geard
group had a pillar I statutory capital payments) but will seek to not take Chief financial officer
ratio of 15.1 per cent (2019: 19.7 per actions that might constrain the strategic
cent), amounting to £9.6m of capital development of the business unless
in excess of the 8 per cent minimum conditions deteriorate to the extent that
regulatory capital requirement. The this is required.
solvency position as at 31 December
2020 includes the audited profits for
the year as well as the increased Going concern
capital requirement pursuant to the
The directors consider that the group
OpenWealth acquisition, whilst goodwill
has adequate resources to remain in
arising from the acquisition does not
operation for the foreseeable future and
qualify for solvency purposes.
have therefore continued to adopt the
going concern basis in preparing the
annual financial statements.
19
Strategic report
Principal risks and uncertainties
The following principal risks relate to

the group’s business and the wider
sector in which it operates. The risks
and uncertainties described below
are not intended to be exhaustive.
Additional risks and uncertainties not Culture risk

presently known to the directors or
that the directors currently deem to be Conduct risk is an intrinsic risk to
immaterial could also have an adverse our business as our behaviour and
effect on the group’s business and organisational structures have the ability
financial performance. to impact customer outcomes, market
integrity and competition in our chosen
The group operates a risk management markets. Our values are embedded in
framework through which it our business strategy and our internal
systematically identifies actual and systems and controls are focused on
potential risk events and seeks to delivering our business plan while
manage and mitigate these risks by meeting our various culture and conduct
putting in place appropriate policies expectations. Similarly, as a listed and
and controls. Our key risk categories as regulated business, governance risk
documented in our risk taxonomy are is intrinsic to our business model. We
summarised on the following pages, believe good governance helps mitigate
and these are managed within the risk risk in our business and provides
appetites set by the board on an annual assurance to our stakeholders that we
basis. Additional information is available are focused on what matters most, our
in our Pillar 3 disclosure which can be conduct and customer outcomes.
found on the company’s website www.
nucleusfinancial.com/investors
20
Business model risks Competition Reliance on key suppliers

The provision of advised platforms is Nucleus, like many other participants
Fluctuations in capital markets, and competitive and Nucleus faces significant in the wrap platform market, operates
economic, political and market factors
competition from a number of sources, a business model that outsources
that are beyond the group’s control
including other intermediated platform selected components of its technology
The group’s revenue and performance providers, life insurance companies, services, and enters into agreements
are directly linked to the value of AUA asset and fund managers and direct to with selected product providers to
held on the platform, which in turn is consumer investment platforms. While distribute and administer their products
linked to the level of inflows, outflows the group strives to remain competitive as part of the Nucleus wrap platform.
and the performance of the assets and by continuing to develop its online and As a result, the group has a reliance
asset classes into which customers offline offering, the risk exists that it is on its key suppliers and performance
have invested. A decline in capital unable to adapt to changing market issues affecting these products and
market asset values may: (i) reduce the pressures or customer demands, keep services may have an adverse impact
value of the AUA on the platform; (ii) pace with technological change and on Nucleus’ strategy and business
prompt customers (in conjunction with platform functionality relative to its performance.
their financial advisers) not to make competitors or maintain its market share
The group’s key suppliers are:
further investments or to withdraw given the intensity of the competition.
funds from the platform; and (iii) make
Competition may also increase in • Bravura Solutions Limited, who
it more difficult for financial advisers
response to demand dynamics, provide Nucleus with platform
to attract new customers to advise
further consolidation (including vertical technology services;
through the platform.
integration) in the wider financial
• Genpact WM UK Limited, who
Economic, political and market factors services sector, new entrants to the
provide Nucleus with technology
can also affect the level of inflows market or the introduction of new
and hosting services;
and outflows and the performance regulatory requirements (including those
of investment assets. For example, targeted at financial advisers or other • Scottish Friendly Assurance Society
a general deterioration in the global market participants). In addition, pricing Limited and Sanlam Life & Pensions
economy, and the UK economy in pressure across the investment lifecycle UK Limited, who provide the onshore
particular, may have a negative impact is prevalent as competitors invest in bond tax wrappers on the platform;
on customers’ disposable income and new technologies and new blends of
• RL360, who provides the offshore
assets, and the value of savings and products and services to deliver value
bond tax wrapper on the platform;
investments on the platform. This was and compelling propositions for their
evident during 2020 as the effects of customers and other stakeholders. • Winterflood Securities Ltd (a division
Covid-19 influenced global economies. of Winterflood Business Services),
who provides Nucleus with
Relationship with financial advisers
stockbroking services; and
Ownership structure
While Nucleus has been able to
• Amazon Web Services (AWS),
The platform market has been relatively maintain strong, longstanding
who provides Nucleus with IT
active in the recent past as market relationships with its adviser users,
infrastructure and cloud hosting
providers seek scale through acquisition there can be no assurance that this
services.
and consolidation. Nucleus is AIM will continue. The group could lose or
listed and publicly traded, albeit with impair relationships as a consequence
a majority shareholder. This alongside of, among other things, operational
the buoyancy of the external market failures, uncompetitive functionality
creates risk in relation to Nucleus future or pricing, reputational damage,
ownership, and potential merger and consolidation and vertical integration
acquisition activity. in the financial advice market or the
closure of firms of financial advisers. The
loss of, or deterioration in, the group’s
relationships with its financial adviser
base, particularly those responsible
for directing significant inflows to the
platform, could have a material adverse
effect on AUA and revenues.
21
Operational and • Operational resilience and Regulatory

technology
regulatory risks Regulatory risk includes the risks relating
to the introduction of new regulations,
- Failure of, or disruption to, the
Operational changes to existing regulations and
sophisticated technology and
The nature of the activities performed non-compliance with existing regulatory
advanced information systems
by the group is such that a degree requirements:
(including those of the group
of operational risk is accepted. and its third-party service a) Impact of new regulation and
Operational risk may have a number providers) upon which the group changes to existing regulations
of consequences, including deficient is dependent.
The risk of failing to identify
service delivery, poor customer
- I nability to respond to the need forthcoming new regulations or
outcomes, an inability to scale
for technological change as a changes could create a risk of
effectively, reputational damage and
result of the failure to continue non-compliance. The risk of late
financial loss.
to improve new technologies, identification could impact the
The group’s operational risks can be through lack of appropriate business’ ability to embed new
divided into three main categories investment in new technologies or changed regulations on time.
(people, technology, and operational or through such investment These risks could result in regulatory
process and controls) with relevant proving unsuccessful. scrutiny, enforcement action and
examples of each below: remedial work.
- Failure to maintain existing
• People technologies or to invest b) Impact of a material breach of
appropriately in continuing existing regulatory requirements
- Failure to attract, train and improvements to those
If Nucleus Financial Services Limited
motivate people, technologies.
(NFS) or any other member of the
- Failure to retain core skills and - Vulnerability of the group’s group, and/or any of its outsourcers
knowledge in the group (key networks and platform (and were to commit a serious breach
person risk), those of its third-party service of any applicable regulations, there
providers) to security risks, could be regulatory and financial
- People-related errors in core cyber-attack or other leakage of consequences including - without
processes. sensitive or personal data. limitation - sanctions, fines, censures,
loss of permissions or authorisation
• Operational process and controls - Vulnerability of the group’s
and/or the cost of being required to
networks and platform (and
take remedial action.
- Failure in core processes and those of its third-party service
controls (whether preventative or providers) to security risks or
detective), either by the group or cyber-attack leading to direct
by third parties, theft of monies or assets.
- Failure in systems and controls in

place to meet the requirements
of taxation and other regulations
in respect of the suitability of
certain investments to be held
within certain tax wrappers and
accounts,
- Failure to adapt processes
and controls to the changing
operating environment (e.g.
Covid-19 operating environment).
22
New regulation in 2020 Financial and liquidity risks Liquidity

There were no material regulatory The group’s liquidity position is subject to
changes that took effect in 2020. Solvency (including access to capital) a number of factors that may generate
The group is required to maintain liquidity strain in the short or medium
and have available to it a sufficient term. The group manages its liquidity
Forthcoming regulatory change
level of capital as determined by the risk through an ongoing evaluation of
February 2021 – Changes to in-specie requirements applicable to an IFPRU its working capital requirements against
transfers: The FCA’s investment platforms 125k limited licence investment firm and available cash balances and credit
market study from 2017 introduced a non-insured Sipp operator. facilities. The group also has a defined
changes relating to in-specie transfers liquidity management framework that
between platforms from February 2021. The group may require access to requires management to monitor and
The changes include requiring the additional capital for a number of report on liquidity positions and potential
facilitation of unit class conversions to reasons, including increased regulatory risks to the audit committee and board
enable in-specie transfers. capital requirements, and there is no on a quarterly basis.
assurance that such additional capital
March 2021 – Certification staff will be available (or available on The strategic report was approved by
registration on the Directory: With the favourable terms). the board of directors on 22 March 2021
introduction of a new Directory for and signed on its behalf by
certification staff under SM&CR, all Nucleus is a public company and its
Nucleus’ certification staff must be entire issued share capital is admitted
registered on the Directory by March to trading on the AIM market of the
2021. London Stock Exchange (LSE), which
provides the group with access to
August 2021 – Enhanced SM&CR status: capital markets if required. The group David Ferguson
As Nucleus meets the criteria of a also operates a dividend policy, with Director
significant IFPRU firm occasionally for the intention that it will pay regular
short periods of time, a consequence dividends – however the ability of the
is it falls into the enhanced SM&CR firm group to pay dividends is dependent
category, which requires additional work on a number of factors including,
to comply with the enhanced regime. among other things, the results of
By August 2021, Nucleus must be its operations, its financial condition, Stuart Geard
enhanced-compliant - which includes anticipated cash requirements, Director
the need to get FCA approval as Senior regulatory capital requirements, future
Manager Functions (SMFs) for additional prospects and its profits available
members of senior management and for distribution, and there can be no
have the required governance in place. assurance that the group will pay
January 2022 – The FCA’s investment firm dividends or, if a dividend is paid, of the
prudential regime (MIFIDPRU): MIFIDPRU amount that any dividend will be.
comes into effect in January 2022. This
will replace the capital requirements
directive and regulation (CRD IV and CRR)
for small and medium-sized investment
firms. We do not anticipate that the
impact of the changes will be material to
our risk profile.
23
Governance
Risk management framework
The board’s objective In assigning risk management Third line of defence

responsibilities, the group operates an
regarding risk management is approach to risk management that is The group engaged Deloitte LLP as
to deliver the group’s strategy commonly referred to as the “three lines an appointed internal audit function
of defence” model. to serve as its third line of defence on
and business plan supported a fully outsourced basis. Through the
by a robust, scalable and The activities within each of the three model the group obtains independent
lines are noted below. At 31 December assurance on the effectiveness
enterprise wide governance, 2020, there were zero open significant of its control environment for
risk management and control internal audit findings. material processes, Cass handbook
framework. arrangements, and cyber frameworks.
Internal audit, through a risk-based
First line of defence approach, provides assurance to the
Our framework is concerned with:
Business lines have responsibility for audit committee and the board on
• Demonstrating it is proportionate identifying, assessing and managing how effectively risks are assessed and
and effective in the governance and their risks through a sound set of managed, and the effectiveness of the
performance of risk management policies, processes and controls. risk management framework. Findings
for an authorised and regulated Business lines are also responsible arising from these audit processes are
investment firm. for the development and deployment reported to the audit committee.
of appropriate mitigating actions and
• Evidencing our business strategy The group also engages other third
embedding of systems and controls.
and business planning process are parties to provide independent
aligned with the risk management assurance.
framework. Second line of defence
• Demonstrating we manage our risk The roles of the second line risk and
appetite tolerances and limits across compliance functions are to develop
agreed risk categories. and maintain the group risk and
compliance management policies and
• Demonstrating we meet all
frameworks. Review of the effectiveness
applicable regulatory principles and
of the risk management practices
requirements on an ongoing basis
performed by operational management
and do so based on strong and
is evidenced through effective
effective risk management culture
assurance reporting to management
and structures.
and the audit committee. The second
• Embedding a risk aware culture with line also provides support and advice
risk management recognised as a to the business risk owners in reporting
management competence, critical to risk related information within the group,
the delivery of our business strategy including management information
and performance targets. on risk and assurance matters to the
audit and risk committees and the
We use a clearly defined risk framework board. The risk committee receives
to effectively identify, assess, manage regular reporting from the second line
and report the group’s risks. The on business performance against risk
framework is set out in our risk appetites across the risk universe.
management policy and is subject to
annual review and challenge by the risk
committee.
24
Governance
Corporate governance statement
I am pleased to present At Nucleus we believe that our corporate

governance arrangements should
our report on corporate support and encourage effective risk
governance. On behalf of the management, diversity of thought and
board, I acknowledge the robust decision making. We believe
there is huge value in delivering effective
importance of high standards leadership and a corporate culture
of corporate governance and based on ethical values and behaviours.
Our governance should support our
the board’s role in overseeing strategy for growth, commitment to the
the business. This has been creation of shareholder value in the long
the case in 2020 as we have term and our desire to deliver good
outcomes for our customers.
continued to re-enforce our
We will continue to review our
culture, conduct, policies and governance arrangements in light
values throughout the year. of our move towards becoming an
SM&CR enhanced firm in 2021 and in
In 2018 we adopted and implemented light of our enlarged group as a result
the principles of the Quoted Companies of our acquisition of certain assets of
Alliance (QCA) Corporate Governance OpenWealth.
Code (the “QCA Code”), welcoming
a code which is proportionate to a
company of our size and complexity.
We last reviewed and updated our
annual statement of compliance with
the QCA Code in September 2020 and Angus Samuels
this is published on our website https:// Chair
nucleusfinancial.com/investors.
22 March 2021
25
Governance
Board of directors
Our board
The board of Nucleus
consists of a team of
executive and non- Angus Samuels Margaret Hassall
executive directors working (appointed July 2018)
Independent non-executive chair
together and using their Independent non-executive director
(appointed July 2006, chair since March
knowledge and experience 2017) Margaret has experience and
of UK financial services Angus started his career as a knowledge in various industry sectors
and platform businesses to stockbroker and became a partner in including manufacturing, utilities and
Fergusson Bros, Hall Stewart and co. (a financial services. She has held a
drive Nucleus forward and leading South African stockbrokers). He number of senior executive positions
achieve good outcomes for has previously held a number of chief at Barclaycard plc, Bank of America
executive officer roles and currently Merrill Lynch Corporation and The Royal
its customers. Bank of Scotland plc. In addition to her
serves as the chairman of UK-based
financial services group the Punter executive roles, she has also worked
We believe our board possesses all
Southall Group and corporate finance extensively as a consultant for Deloitte,
the necessary attributes to effectively
business Craven Street Capital Limited. Oracle Corporation and Wavestone
steer and challenge the executive team
He also holds a number of other Limited, and led the Financial Services
and assess the quality of management
non-executive directorship positions, consulting business for Charteris plc.
decision making. The board must also
including Sanlam Investment Holdings Margaret is now an experienced non-
ensure the group’s obligations to its
UK Limited and Sanlam Life and executive director and in addition to
shareholders and wider stakeholders
Pensions UK Limited. Nucleus also currently sits on the boards
are understood and met.
of The Phoenix Life Companies, Tandem
Our board is collectively responsible for (also as remuneration committee chair)
setting out the strategy and vision of the and Ascention Trust (Scotland).
group. It is also responsible for shaping
and instilling company values, culture
and standards, providing oversight of
and challenge to management and
for ensuring the maintenance of sound Tracy Dunley-Owen
systems of internal control and risk (appointed July 2018)
management.
Independent non-executive director
John Levin
(appointed April 2017)
Tracy has over 20 years’ experience in
global financial services and is currently Senior independent director
an independent non-executive director
and committee chair for a portfolio John co-founded and is chairman of
of companies. She has held senior Certua Group Limited which provides an
executive finance roles in addition Embedded Finance platform for SMEs
Chair of the remuneration to board, audit and risk committee and individuals supplying banking,
and HR committee responsibilities at various companies credit and insurance solutions. John
within the Old Mutual plc group, also co-founded Telecom Plus plc where
Guardian Financial Services group he was a non-executive director from
Chair of the nomination
committee and a division of Swiss Reinsurance 1997 to 2006. John has held senior
Company Limited. Tracy’s non-executive positions in several companies including
portfolio currently includes Sun Life chairman of Amtrust Europe Limited, Car
Chair of the audit
Assurance Company of Canada (UK) Care Plan (Holdings) Limited and Motor
committee
Limited, Simplyhealth Group Limited and Insurance Company Limited and was
AIB Group (UK) plc. the CEO and non-executive director of
Chair of the risk IGI Group Limited. John is currently the
committee chair of Rocketer Consulting Limited.
26
Board of directors
Jonathan Polin David Ferguson

(appointed July 2016) (co-founder and CEO
since 2006)
Non-independent non-executive director
Experience: Jonathan began his Chief executive officer
financial services career with Prudential Experience: David started his career as
plc before taking up the position of a trainee actuary in established and
Managing Director UK, European start-up ventures in the life insurance
and Middle Eastern sales at what and asset management sectors before
was formerly known as Aberdeen becoming a founding partner in a
Asset Management plc. Prior to this financial product design and strategy
Jonathan was a director at Ignis Asset consultancy. He has led the Nucleus
Management Limited. Jonathan has business from its founding in 2006 to
also held the position of chief executive the present day. He is one of HMT’s
officer of wealth management firm, Fintech Envoys for Scotland and was the
Ashcourt Rowan plc, before becoming founding chair of Fintech Scotland.
the group chief executive officer of
Sanlam UK Limited. Furthermore,
Jonathan holds the position of non-
executive director at Avidus Scott Lang.
Stuart Geard
(appointed October 2012)
Chief financial officer
Alfio Tagliabue
(appointed February 2020) Experience: Stuart started his career with
what is today PwC South Africa before
Non-independent non-executive director moving to Sanlam Limited as a senior
manager in corporate finance. He was
Alfio’s experience has spanned head of finance and investments for
across the investment and wealth what is now Sanlam Life and Pensions
management sector, where he has held UK Limited prior to becoming finance
a number of CEO and CFO positions, director of Sanlam UK Limited. He also
as well as over 15 years’ experience as served as director at Sanlam Private
a board level consultant and advisor Investments UK Limited and Sanlam
in financial services, investment Life and Pensions UK Limited and audit
management and other sectors. Alfio and risk committee chair of most of
spent five years in his early career with the Sanlam Group’s interests in the UK.
Mars & Co, a strategy consultancy. More Stuart joined Nucleus in an executive
recently he was Group CFO of Ashcourt capacity as managing director in 2012,
Rowan plc, a wealth management before being appointed as the chief
company, and joined Sanlam UK in financial officer in 2017.
2016, holding during his tenure a
number of positions including Sanlam
UK CFO and CEO of Sanlam Investments
UK. Alfio is currently group head of
strategy for Sanlam UK.
27
Board of directors
Remuneration
Audit Risk Nomination and HR
Meeting attendance Board1 committee2 committee3 committee4 committee5
Independent
non-executive directors
Angus Samuels (chair) 32 9 5 5 9
Tracy Dunley-Owen 29 9 5 n/a n/a
Margaret Hassall 31 n/a n/a 5 9
John Levin 29 9 5 5 9
Non-independent
non-executive directors
Jonathan Polin6 18 n/a n/a 4 7
Alfio Tagliabue7 20 8 5 n/a n/a
Jeremy Gibson8 0 0 0 n/a n/a
Executive directors
David Ferguson 32 n/a n/a n/a n/a
Stuart Geard 31 n/a n/a n/a n/a
¹ The board met thirty-one times and held one board sub-committee meeting in 2020.
² The audit committee met seven times and held two audit sub-committee meetings in 2020.
³ The risk committee met five times in 2020.

4
The nomination committee met five times in 2020.
5
The remuneration and HR committee met nine times in 2020.
6
As a Sanlam nominated director, Jonathan Polin was recused from all board meetings in relation to the approval of the acquisition of
certain assets of OpenWealth and the potential offers for the Company due to a declared conflict of interest. As a result, Jonathan was
invited to a total of twenty-two board, four nomination committee and seven remuneration and HR committee meetings.
7
As a Sanlam nominated director, Alfio Tagliabue was recused from all board meetings in relation to the approval of the acquisition of
certain assets of OpenWealth and the potential offers for the Company due to a declared conflict of interest. As a result and given the
timing of his appointment, Alfio was invited to a total of twenty board, eight audit committee and five risk committee meetings.
8
Jeremy Gibson resigned as a director of the Company on 25 February 2020. Apologies were noted for Jeremy in respect of 2020 board
and board committee meetings prior to 25 February 2020.
28
Board of directors
Board constitution The board commits to following the John Levin is our senior independent
QCA Code which we believe will further director (SID). The SID acts as a sounding
Our schedule of board reserved matters support independent, effective and board and key support to the chairman,
was adopted on our admission to transparent decision making, enhance and acts as an intermediary for other
AIM in 2018 and is reviewed regularly. collective and individual performance directors as required.
It covers topics such as strategy and and drive sustained performance.
management, governance, financial The company secretary and the chief
The board considers Angus Samuels,
reporting and controls, internal controls executive officer report directly to the
John Levin, Margaret Hassall and
and remuneration. The schedule of chairman. The company secretary acts
Tracy Dunley-Owen to be independent
reserved matters can be found at as an internal but impartial adviser to
non-executive directors and, as such,
https://nucleusfinancial.com/investors. the board, specifically on governance
free of any relationship which could
matters, and provides support to
There is a relationship agreement in materially interfere with the exercise of
the board by managing the agenda
place between the company and its their independent judgement. Further
planning cycle and ensuring that the
majority shareholder, Sanlam UK Limited commentary around the independence
board receives quality information in a
(Sanlam), the details of which were of our directors can be found within the
timely fashion. She also supports the
disclosed in the company’s Admission company’s statement of compliance
chair in assessing training needs and
document which can be found at with the QCA Code which can be
arranging training for the board as
https://nucleusfinancial.com/investors. found at https://nucleusfinancial.com/
required.
The relationship agreement contains investors.
a number of provisions designed to The board meets at least quarterly and
protect the interests of shareholders as holds additional meetings as required. Board effectiveness
a whole as well as to ensure that the The number of additional meetings The Nucleus board and its committees
company is able to carry on its business during 2020 were reflective of the are committed to periodic evaluation
independently from Sanlam, and as a business underway in the group at of their performance and effectiveness.
result supports independent, effective that time and are shown in the table This commitment is evidenced in our
and transparent decision making by above alongside director attendance. In corporate governance framework as
the board. The relationship agreement respect of the offer for the Company as part of the board schedule of reserved
also specifies that at all times a majority announced to the market on 9 February matters and the terms of reference
of the board will be comprised of 2021, the board sought external advice of each board committee. The board
directors who are considered by the from Craven Street Capital Limited and performance evaluation is led by the
board to be unconnected and free Shore Capital and Corporate Limited as chair and supported by the company
from any business, employment or joint financial advisers for the purposes secretary. Individual performance
other relationship with the Sanlam of Rule 3 of the Code and from Burges reviews for each director are the
Group. Pursuant to the relationship Salmon LLP as legal advisers. Due responsibility of the chair and are
agreement, it has been agreed that to the pandemic, save for meetings carried out annually.
Sanlam nominated directors do not in the early part of the period, board
qualify as independent directors and, as and board committee meetings were During 2020, the board undertook
such, Jonathan Polin and Alfio Tagliabue held via a virtual meeting provider a review of its schedule of reserved
are not considered independent non- throughout 2020. I feel that the directors matters and delegated authorities
executive directors of the company. made the best use of the technology and each board committee reviewed
Furthermore, in the context of the offer available during this time enabling its effectiveness. Building on the
process for the Company, a disclosure respective chairs to manage meetings feedback from each board committee
protocol was put in place to manage effectively and allowing directors to effectiveness review, the terms of
information flows between the Company continue to contribute positively and to reference for each committee were
and our Sanlam nominated directors. deliver robust and relevant challenge reviewed along with the business to be
As noted in the director attendance to management. As a result, all board conducted at each meeting during the
table above, Jonathan Polin and Alfio committees effectively executed their year and approved by the board.
Tagliabue were also recused from all duties and responsibilities, assisting
board and board committee meetings the board in fulfilling its oversight
in relation to the potential offers for the responsibilities for the group during the
Company. reporting period.
29
Board of directors
The board recognises that well-informed The group is committed to supporting Board oversight of Nucleus’
and high-quality decision making is individual director development needs.
risk management and control
a critical requirement for a board to Director training needs are reviewed at
be effective. During 2020, the board board committee level and all directors framework
continued to embed its procedures can take independent advice in support The board has overall responsibility
for decision making and information of their duties at the group’s expense for risk management and internal
sharing and style of board reporting to and under the board policy for obtaining controls and is supported by the board
reduce volume and improve quality and independent advice. Directors also have risk and audit committees. Details of
consistency. The changes formed part access to the advice and services of the our principal risks and uncertainties
of the overall review of our governance company secretary. Regular training can be found on pages 20 to 23 and
arrangements aligned to the SM&CR across a range of topics is offered to a summary of our risk management
for solo-regulated firms which came our board in addition to the learning framework can be found on page
into effect in December 2019 and which and development that each director 24. Further details can be found in
is designed to bring greater individual undertakes individually. our Pillar 3 disclosure and statement
accountability across the senior team. of compliance with the QCA Code,
As referred to in James Hay Holdings’
Our capability framework, which acts both of which can be found at https://
announcement dated 9 February 2021
as a responsibilities map for every nucleusfinancial.com/investors.
in respect of the acquisition of the
discipline in the organisation and
Company, should its offer complete, it is
aligns to our delegated authorities
intended that the current non-executive
framework and board schedule of Communication with
directors will step down.
reserved matters, is another example shareholders and
of the tools in place to provide greater
stakeholders
clarity and boundaries for our people Culture and conduct
and align to the ongoing work to create The board is committed to maintaining
clear leadership outcomes. The board Culture and conduct remained a focus an ongoing dialogue with the group’s
considers that these tools promote during 2020. The group’s conduct and shareholders and stakeholders.
greater autonomy and agile working culture framework aims to ensure During 2020 we announced any
practices which, over the course of the that our culture and values remain significant shareholder information
pandemic, has been demonstrated embedded across the group. The board to the market and communicated
in retained group performance and intends to continue assessing and with our shareholders through results
engagement of our people. monitoring culture and conduct on an presentations and our AGM.
ongoing basis, and receives quarterly
reporting to support this, built on Our broader engagement with our
Director induction, training qualitative and quantitative metrics. stakeholders is set out in our s172 report,
which can be found on pages 10 to 13,
and re-election In addition, work continued on the and is also detailed in our statement of
Nucleus invites each new director to group wide policy framework to ensure compliance with the QCA Code, which
receive a tailored induction including alignment of our policies to our risk can be found at https://nucleusfinancial.
typical elements such as briefings with categories, bringing greater clarity and com/investors.
members of the executive team and connection for our people between our
values, our behaviours, our strategic On behalf of the board
other people across the business. All our
directors are also given the opportunity objectives and our policies. We refined
to meet with other stakeholders such as our policy approval process and the
our platform users, our customers and board risk committee and board
key suppliers. have committed to a review of the
effectiveness of the revised group wide
policy framework in 2021. Angus Samuels
Chair
22 March 2021
30
Governance
Our board committees
The board has established four principal

committees: audit, risk, nomination and
remuneration and HR. Each committee
operates under its own terms of reference
to assist the board in its oversight and
monitoring responsibilities for the group.
31
Governance
Audit committee and risk committee reports
I am pleased to present the audit committee and risk committee reports

for the period ending 31 December 2020.
Tracy Dunley-Owen, chair of the audit committee and risk committee (appointed 19 July 2018)
Audit committee report • The adequacy and effectiveness of Committee highlights

systems of internal control.
• Reviewing and approving new
Committee responsibilities • Reviewing of quarterly reports accounting policies and changes
The audit committee terms of reference such as the reports from the chief to existing policies adopted by the
are available on the company’s financial officer, chief technology group.
website and can be found at https:// officer, chief risk officer, the money
• Reviewing and approving areas
nucleusfinancial.com/investors. The laundering reporting officer, and
of significant judgement and
terms of reference were last reviewed Cass oversight function holder.
estimation including accounting for
on 1 December 2020 and in accordance • The embedding of a supportive the acquisition of certain assets of
with the terms of reference, the culture in relation to the OpenWealth, revenue recognition,
committee is responsible for: management of financial risk across provisions, share-based payments
the group. and income taxes.
• The integrity, quality and reliability
of financial information used by • Reviewing the group’s final and
the board, specifically regarding Composition and frequency of meetings interim results announcements and
the annual reports and financial 2020 annual report and financial
The audit committee comprises Tracy
statements, as well as significant statements and Pillar 3 disclosures
Dunley-Owen (chair), Angus Samuels,
financial and regulatory returns, John Levin and Alfio Tagliabue. Details • Monitoring the company’s
issued by the group. of the number of meetings held within compliance profile and any
• The suitability, appropriate adoption the reporting period and attended by identified concerns and actions
and any proposed changes to members can be found in the table on through the review of quarterly
accounting policies and practices for page 28, in the corporate governance reports from the chief risk officer
the group. report. The company secretary acts as as holder of the SMF16 compliance
secretary to this committee. oversight function for Nucleus
• Reviewing the impact of any Financial Services Limited.
proposed dividends. The board is satisfied that, as well as
demonstrating recent and relevant • Monitoring the company’s financial
• The independence and effectiveness financial experience, the committee crime risk profile through the review
of the external audit including members possess extensive business of quarterly reports from the chief
monitoring any non-audit work. experience, knowledge of financial risk officer as the holder of SMF17
• The independence, efficiency and markets and the UK platform money laundering reporting officer
effectiveness of the group’s internal market, knowledge of the risks and for Nucleus Financial Services
audit arrangements. management practices inherent in Limited.
these markets and knowledge of
• Overseeing developments in board
the applicable legal and regulatory
level reporting in the areas of cyber
landscape.
security and data oversight.
The board is satisfied that the committee
is independent.
32
• Overseeing the delivery of the Internal audit arrangements

external statutory and Cass
Deloitte was appointed as the
regulatory audits by PwC.
group’s internal audit provider during
• Overseeing assurance provided on 2018. Deloitte provides the group
the group Cass environment. with a fully independent assurance
programme which is informed by
• Agreeing the external audit plan,
the group’s second line of defence
agreeing the audit fees and
assurance programmes and business
reviewing the effectiveness of the
requirements with reference to the
external audit.
committee approved internal audit
• Monitoring progress against the charter. Deloitte’s engagement includes
2020 internal audit plan and independent assurance on cyber,
approving the internal audit charter technology and Cass.
and 2021 plan.
The internal audit programme is
• Providing challenge and oversight of reviewed, challenged and approved
the group’s response to external and annually by the committee and is also
internal control findings. reviewed quarterly by the committee to
monitor progress and completeness.
External audit arrangements
On behalf of the audit committee
Subject to the approval of shareholders,
the audit committee is responsible Tracy Dunley-Owen, Chair of the audit
for approving the appointment of committee
the external auditor and setting its
22 March 2021
remuneration. As reported in our group
financial statements to 31 December
2010, PwC was first appointed as our
external auditor in 2010. Following the
company’s admission to AIM in July
2018, the audit partner rotation rules for
listed companies apply which resulted in
a change of engagement partner during
2018. The committee has reviewed
the relationship with the auditor and,
having considered its effectiveness and
independence, intend to propose that
PwC is re-appointed as external auditor
at the company’s forthcoming AGM.
The company’s existing engagement
partner, Lindsay Gardiner, is expected to
retire during 2021 and it is expected that
he will be replaced by Gillian Alexander.
The committee monitors any non-audit
work carried out by the auditors. The
committee is satisfied that the nature and
value of non-audit work performed has
not affected the independence of PwC.
33
Risk committee report Committee highlights

• Monitoring and providing assurance
Committee responsibilities on the enhancement of the group
The risk committee terms of reference risk management framework to
are available on the company’s meet the needs of the business and
website and can be found at https:// its stakeholders.
nucleusfinancial.com/investors. • Monitoring and providing assurance
The terms of reference were last on the development of the group risk
reviewed on 1 December 2020 and, appetite framework, the separation
in accordance with these terms of board approved and operational
of reference, the committee is components and assessment of
responsible for: underlying metrics.
• Fostering sound risk governance by • Overseeing the enhancement of

advising the board on the group’s risk reporting at board and board
risk culture, current and future committee level via a new chief risk
overall risk exposure, appetite officer report and development of
and tolerance, and implementing the risk and compliance report.
and maintaining the group risk • Reviewing and recommending
management framework and board approval of the 2019 year-end
recommending any changes to the Icaap review and 2019 year-end
board. wind down report.
• Maximising the efficiency and • Reviewing the quarterly 2020
effectiveness of the group’s three Icaap programme updates and
lines of defence. recommending board approval
• Reviewing and recommending of the quarterly assessment of
to the board the annual Icaap the consolidated group and solo
approach and methodology, and regulatory capital requirement.
the quarterly reassessment of • Reviewing the group’s existing and
regulatory capital requirements. forecasted risk profile, including
• Reviewing and approving corporate specific Covid-19 and Brexit risk
policies in accordance with the analysis.
group policy framework. • Monitoring the position of Nucleus
• Promoting risk awareness culture Financial Services Limited as a
across the Group. significant IFPRU firm and the firm’s
preparedness for a transition to
enhanced SM&CR status.
Composition and frequency of meetings
• Reviewing and recommending a
The risk committee comprises Tracy
redesigned group policy framework,
Dunley-Owen (chair), Angus Samuels,
approving a number of group
John Levin and Alfio Tagliabue. Details
policies and recommending any
of the number of meetings held within
material policy changes or new
the reporting period and attended by
group policies to the board.
members can be found in the table on
page 28, in the corporate governance
report. The company secretary acts as On behalf of the risk committee
secretary to this committee. Tracy Dunley-Owen, Chair of the risk
The board is satisfied that the committee committee
is independent. 22 March 2021
34
Governance
Nomination committee and remuneration

and HR committee reports
I am pleased to present the nomination and remuneration and HR committee
reports for the period ending 31 December 2020.
Margaret Hassall, chair of the nomination committee and remuneration and HR committee (appointed 19 July 2018)
Nomination committee report • To review performance appraisals director independence.

and fitness and proprietary
• Engagement in the appointment
Committee responsibilities assessments for non-executive
process for and recommendation
directors and senior managers
The nomination committee terms of of the appointment of a new non-
annually.
reference are available on the company’s executive director, Alfio Tagliabue,
website and can be found at https:// • To support the company’s role as a to the board (effective from 25
nucleusfinancial.com/investors. The champion of diversity and inclusion February 2020)
terms of reference were last reviewed on and monitoring progress against the
• Challenge of the executive team
1 December 2020 and, in accordance company’s diversity targets as well
structure, particularly in light of
with these terms of reference, the as recommending any changes to
the acquisition of certain assets of
committee has a responsibility: the diversity and inclusion policy to
OpenWealth.
the board.
• To review the structure, size • Engagement with and challenge of
and composition of the board management on the target operating
Composition and frequency of meetings
and considering succession model and workforce plan.
planning for directors and The nomination committee comprises
• Review of board succession planning
other senior executives, making Margaret Hassall (chair), Angus
and challenge of management
recommendations to the board as Samuels, John Levin and Jonathan
on executive and senior manager
appropriate. Polin. Details of the number of meetings
succession planning.
held within the reporting period and
• To identify and nominate new attended by members can be found in • Guidance to management on
director appointments in line the table on page 28, in the corporate the development of executive
with board procedures, making governance report. The company development plans.
recommendations on re-election of secretary acts as secretary to this
directors where they are retiring by • Challenge of statements of
committee.
rotation and re-appointment of non- responsibility and the management
executive directors where they have The board is satisfied that the committee responsibilities map in respect of
completed their term of office. is independent. SM&CR and approved person and
SMF “fit and proper” assessments.
• To recommend suitable candidates
for the role of senior independent Committee highlights • Evaluation of committee effectiveness
director (as and when required). • Encouragement of management in and recommendation of its terms of
nurturing an inclusive, diverse and reference for board approval.
• To evaluate director and
management training needs. inspiring workplace. The group’s
inclusion and diversity statement can On behalf of the nomination committee
• To evaluate the target operating be found on the company’s website
model and organisational design Margaret Hassall, Chair of the
at www.nucleusfinancial.com/
and making recommendations nomination committee
about-us/inclusion-and-diversity.
concerning any changes to the 22 March 2021
responsibilities or other associated • Evaluation and challenge of the
changes to the organisational structure, size and composition of
structure. the board and matters relating to
35
Nomination committee and remuneration and HR committee reports
Remuneration and Composition and frequency of meetings Committee highlights

HR committee report The committee comprises Margaret • Assessment and challenge of
Hassall (chair), Angus Samuels, John any proposed changes to the
Margaret Hassall, chair of the
Levin and Jonathan Polin. Details of directors’ remuneration policy and
remuneration and HR committee
the number of meetings held within recommendation of the directors’
(appointed 19 July 2018) the reporting period and attended by remuneration policy to the board.
members can be found in the table on
• Review of and challenge to
Committee responsibilities page 28, in the corporate governance
performance against annual bonus
report. The company secretary acts as
The remuneration and HR committee’s measures and approval of 2020
secretary to this committee.
terms of reference are available on bonus awards.
the company’s website and can be The board is satisfied that the committee
• Review of and challenge to
found at https://nucleusfinancial.com/ is independent. No individual was
achievement against performance
investors. The terms of reference were involved in any committee discussion
conditions applicable to outstanding
last reviewed on 1 December 2020 relating to his or her own remuneration.
performance share plan awards.
and, in accordance with these terms During the year, the committee sought
of reference, the committee has a • Approval of the grant of
internal support from the chief people
responsibility: performance share plan awards for
officer, who attended committee
2020 and associated performance
meetings by invitation from the chair, to
• To set the overall remuneration conditions and targets.
advise on specific questions raised by
policy for the executive directors the committee and on matters relating • Engagement with management
and other senior employees, to the performance and remuneration and the Company’s legal advisers
having due regard to any relevant of senior managers. The chief people in respect of the Company’s LTIP
legal, regulatory and governance officer was not present for any arrangements in the context of
requirements. discussions that related directly to her the possible offer process for the
• Within the terms of that policy, to own remuneration. Company and, in particular, on
determine the terms and conditions the assessment of performance
In addition, and within the context of
of employment of those individuals conditions and the determination of
the process followed in respect of the
and the level and structure of their the vesting of LTIP awards as part of
potential acquisition of the Company
remuneration (including short-term that transaction.
by James Hay Holdings, the committee
and long-term incentives). sought external advice from Shepherd • Consideration of and guidance on
• To approve the design of, and and Wedderburn LLP, its joint Rule 3 the group’s people strategy and
to determine targets for, any advisers under the Code and Burges reward strategy.
performance related pay schemes Salmon LLP on the implementation of its
• Evaluation and challenge of, and
and to approve the total annual long-term incentive plan.
engagement with management on,
payments made under such its benefits harmonisation proposal
schemes. and cultural integration plan as
• To review the design of all share part of the Company’s acquisition of
incentive plans and to determine certain assets of OpenWealth.
each year whether awards will • Review of and engagement with
be made and if so, the overall management on the group’s
amount of such awards and the gender pay gap reporting and its
performance targets to be used. preparedness to publish its gender
• To review the delivery of our people pay gap data in 2022.
strategy and supporting policies. • Evaluation of committee
effectiveness and recommendation
of its terms of reference for board
approval.
36
Remuneration policy Remuneration at Nucleus
Margaret Hassall, chair of the Our remuneration policy has been

remuneration and HR committee chosen to attract, motivate and retain
high-performing people who can
(appointed 19 July 2018) deliver our strategy and contribute
fully to the future success of Nucleus.
Shareholder engagement With the support of the board, the
committee intends to deliver a market-
The group is committed to engaging
relevant reward proposition that creates
with its shareholders and wider
alignment between our people and
stakeholders and the purpose of the
our shareholders and is driven by
information presented is to provide
our appetite to: a) align the interests
an indication of how remuneration is
of our people and our shareholders,
approached at Nucleus and of director
b) reward the right behaviours,
remuneration from 1 January 2020 to
reinforce the importance of good
the end of the reporting period. The
conduct and penalise misconduct or
majority of the information below on
other misbehaviour and, c) promote
remuneration policy is presented on a
confidence and trust by keeping our
voluntary basis. The committee wishes
remuneration policy simple, clear and
to oversee, assess and challenge where
transparent.
appropriate how our remuneration
policy embeds and to review the extent The group’s executive directors’
of engagement with shareholders remuneration policy was developed
on our policy throughout the course during the course of 2018 in preparation
of 2020. As an AIM-listed company, for the Company’s admission to AIM and
Nucleus is not required to seek was formally adopted by the committee
shareholders’ approval of this report on 14 November 2018. It is reviewed
at the forthcoming AGM. However, the annually by the committee and was
committee will keep this under review last reviewed and approved by the
and may include such a resolution in committee on 1 December 2020 for the
future years. forthcoming reporting period 1 January
2021 – 31 December 2021. No material
changes to the executive directors’
remuneration policy were proposed.
While the policy below refers explicitly
to executive directors only, it is also
applicable to all other executive
committee members and senior
leaders.
37
Executive director remuneration policy for the period ending 31 December 2020
The various elements and strategic objectives associated with executive remuneration are:
Base salary Annual bonus

Element (purpose and link to strategy) Element (purpose and link to strategy)
To reflect the market value and value of the To reinforce and reward delivery of annual
role to Nucleus along with the individual’s strategic business priorities thus delivering
performance and contribution. value to shareholders and being consistent
with the delivery of the strategic plan.
Operation
Operation
The committee reviews base salaries with
reference to: Performance measured on an annual basis
for each financial year.
• the individual’s role, performance and
Performance measures reviewed prior to
experience
the start of the year to ensure they remain
• group performance and the external appropriate and align with the business
economic environment strategy. Stretching targets are set.
• salary levels for similar roles at relevant At the end of the year the committee
comparators; and determines the extent to which these were
achieved.
• salary increases across the company
On-target bonuses are a maximum of 75
Base salary is reviewed on an annual basis, per cent of base salary. The maximum
with any increases taking effect from 1 January. bonus opportunity is 200 per cent of on-
target. There is no minimum or guaranteed
The committee will seek to limit pay increases
level of bonus.
for executive directors, where there is no
change in role, to those applied generally to our Awards are paid in cash, are discretionary
people across the company. and do not form part of the terms and
conditions of employment.
However, where an executive director is
relatively new in role the committee reserves Deferral may be applied where the
flexibility to provide increases that are greater committee deems it necessary to do so.
than those applied across the company to bring
the individual’s salary into line with the market
Performance metrics
and reflect the gaining of experience.
Performance measures are selected, and
their respective weightings may vary from
Performance metrics
year to year, depending on the group
Group and individual performance are priorities.
considerations in setting base salaries.
Measures include a blend of equally-
weighted personal and group objectives.
In 2020 the group performance measures
were: profit, net inflows, project delivery,
systems and controls and service.
In 2020 the personal element was
measured by assessing delivery against
the business plan, conduct, leadership and
progress towards diversity and inclusion
objectives.
38
Long term incentive plan (LTIP) Share incentive plan

To drive sustained long-term performance that To align shareholder interests with those of our
supports the creation of shareholder value. people and allow them to benefit from the long-
term success of the group.
Operation
Operation
Annual awards of performance shares may be
made to participants. The LTIP rules provide for Executive directors are invited to participate in
annual awards of up to 150 per cent of base this all-employee share plan on the same basis
salary, save that this limit can be exceeded as all of our people.
if the committee determines that exceptional
The Share Incentive Plan (SIP) provides for the
circumstances exist in relation to one or more
purchase of shares, in line with Her Majesty’s
participants.
Revenue and Customs (HMRC) participation
Award levels and performance conditions are level rules, on a monthly basis from gross pay
reviewed before each reward cycle to ensure and is also the vehicle used to allow for awards
they remain appropriate. of free or matching shares.
Awards made under the LTIP will have a
performance period of three years and a Performance metrics
minimum vesting period of three years.
Not performance related.
Dividend equivalents may accrue on LTIP awards
and are paid on those shares which vest.
Malus (of any unvested LTIP award) and
clawback (of any vested LTIP award) may
be applied where the committee deems it
necessary to do so, including in the event of
gross misconduct or a material mis-statement.
Performance metrics
Vesting of LTIP awards is subject to group
performance and continued employment.
The current LTIP performance measures and
weightings are:
33 per cent EPS
33 per cent Net inflows
33 per cent Total shareholder return
The committee may vary the terms of
the performance conditions attaching
to an outstanding award in exceptional
circumstances, provided that the amended
conditions are, in their opinion, neither
materially easier nor more difficult to achieve
than the original performance conditions as
envisaged by the committee at the date of grant
of that award.
39
Pension Benefits
To provide a market competitive pension. To provide market competitive benefits.
Operation Operation
Executive directors may participate in the Benefits include private medical cover,
company pension scheme or may receive a life assurance and employee assistance
cash allowance in lieu of pension contribution. programmes.
Salary is the only element of remuneration that 28 days standard annual holiday allowance
is pensionable. plus 9 public holidays.
A maximum of 10 per cent of base salary Fully underwritten private medical insurance
contribution paid into the company’s group to executive directors and their dependents is
pension scheme or, as an alternative, a provided.
maximum of 8.5 per cent of base salary cash
Death in service at four x base salary.
allowance may be provided upon request. This
is the same opportunity that is offered to all
other employees. Performance metrics
Performance metrics
40
Further detail behind Consideration of risk factors and Service contracts for executive directors
risk appetite
our policy The service agreements govern the
Malus and/or clawback may be applied performance of the executive directors’
Performance measures where: there is evidence of colleague duties for the company and other
misbehaviour, misconduct, material members of the group. The principal
The committee selects the short,
error, where a colleague participated terms of the service agreements are
medium and long-term performance
in conduct which resulted in losses summarised below.
measures to ensure an appropriate
for the group or they failed to meet
balance between short, medium and
appropriate standards; there is any • The service agreements provide for
long-term strategic goals and aligning
material failure of risk management; 28 holidays per annum (plus public
the interests of executive directors with
if the financial results are restated; if and bank holidays), and up to three
shareholders as far as practicable.
the financial results for a given year months sick pay.
Measures and targets for both the
do not support the level of variable
bonus plan and LTIP are aligned to the • Executive directors are eligible
remuneration awarded; or in any other
strategic plan based on internal and to receive bonus and/or other
circumstances where the committee
external reference points and are set to discretionary incentive awards.
consider adjustments should be made.
be stretching but achievable with regard These are at the committee’s
The committee is supported in this by
to the group’s strategic priorities and discretion and the executive
the board risk and audit committees
economic environment in a given year. directors do not have a contractual
and the Nucleus risk function.
These are approved by the board. right to receive such awards.
When determining the outcome of the
The committee may apply discretion, • An executive director’s employment
performance measures, the committee
in exceptional circumstances (for may be terminated by either party
will seek the advice of the board risk
example, if there is a major corporate giving to the other not less than six
committee to ensure all relevant risk
event), to amend or vary targets or the months’ written notice. Under the
factors are identified and the bonus
weighting of performance metrics or terms of each service agreement,
pool and/or individual awards may be
to substitute the metrics if these are no the company may elect to terminate
adjusted accordingly.
longer appropriate to ensure alignment an executive director’s employment
with strategy and any risks within the by making a payment in lieu of
business. The committee will consult Balance between fixed and variable pay notice equal to the base salary
with the group’s risk management and benefits (but excluding bonus)
Total variable remuneration (bonus
and control functions to ensure for any unexpired portion of the
and LTIP) is limited by the rules of the
changes are appropriate and do not notice period.
LTIP, which limit the annual allocation
inadvertently encourage irresponsible or
of awards (unless in exceptional • The company also has the discretion
inappropriate behaviour.
circumstances) to a maximum of 150 to place an executive director on
per cent of base salary for executive garden leave during the notice
directors under the LTIP, and the rules of period. It is entitled to dismiss an
the management group bonus scheme, executive director without notice
which define the target and maximum or compensation in specified
bonus rates. All of these parameters are circumstances, for example if the
within the authority of the committee, executive director commits a serious
which is therefore able to ensure that or persistent breach of any term of
an appropriate balance between fixed the service agreement.
and variable pay is maintained. The
existing LTIP award allocations and • The executive directors’ service
current and historic on-target bonus agreements also contain six-month
payments result in approximately a 2:1 post-termination non-compete
ratio of variable pay to fixed pay (subject restrictions and 12 months’ post-
to the achievement of performance termination non-solicitation and
conditions), with the on-target LTIP non-deal restrictions.
award being at least half of the total
variable pay award.

41
Directors’ remuneration in 2020

Audited single total figure of remuneration
The table below sets out a single figure for the total remuneration received by each director for the year ended 31 December 2020
and the prior year:
Basic Taxable Annual

salary/fees benefits Pension bonus LTIP/SIP Total
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Executive directors
David Ferguson 1,2 306 297 2 2 5 9 154 138 - - 467 446
Stuart Geard 1,2 257 249 1 1 5 10 117 108 - - 380 368
Non-executive directors
Tracy Dunley-Owen 51 39 - - - - - - - - 51 39
Jeremy Gibson 3,5 3 35 - - - - - - - - 3 35
Margaret Hassall 44 39 - - - - - - - - 44 39
John Levin 37 35 - - - - - - - - 37 35
Jonathan Polin 5 37 35 - - - - - - - - 37 35
Angus Samuels 5 100 83 - - - - - - - - 100 83
Alfio Tagliabue 4,5 34 - 34 -
¹ basic salary includes 8.5 per cent pension cash allowance
² Pension restricted for annual taper allowance
³ 2020 non-executive director fee pro-rated to resignation from the board

4
2020 non-executive director fee pro-rated from appointment to the board
5
Remuneration paid to third parties
Non-executive director remuneration is determined by the board as a whole within the limits set out in the articles of association.
Non-executive directors do not participate in performance-related bonus or share-based payment arrangements.
42
Summary of share incentive plan awards
The table below summarises individual executive director share scheme awards as at 31 December 2020.
Scheme Grant date David Ferguson Stuart Geard
LTIP 2018 26 July 2018 243,441 164,180

LTIP 2019 3 April 2019 199,786 134,738
LTIP 2020 6 October 2020 311,715 233,000
SIP 2,448 -
Total shares awarded 757,390 531,918
The performance conditions, valuation assumptions and other relevant award information are set out in note 26 share-based
payments below.
Directors’ interest in shares
The number of shares held by the directors as at 31 December 2020 is as follows:
Shares beneficially Unvested Non-entitled

Director owned¹ LTIP options SIP shares Total
David Ferguson 1,812,636 754,942 2,448 2,570,026
Stuart Geard 954,625 531,918 - 1,486,543
Angus Samuels 53,409 - - 53,409
1
Includes shares held by connected parties
Margaret Hassall
Chair of the remuneration and HR committee
22 March 2021
43
Governance
Directors’ report
The directors present their report and the audited

consolidated financial statements for the year
ended 31 December 2020. Nucleus Financial
Group plc is the parent company of a group of
companies comprising Nucleus Financial Group
plc and its subsidiaries, Nucleus Financial Services
Limited (NFS) and Nucleus IFA Services Limited
(NIFAS) (group).
Introduction From April 2020, NFS and the group

temporarily met the definition of a
The company’s principal activity is that significant IFPRU firm and are therefore
of a holding company. It also contracts required to comply with the rules
services on behalf of the group, is the and requirements applicable to a
main employer of Nucleus staff and significant IFPRU firm. The group last
provides and charges management met the definition of a significant
services to its subsidiaries. IFPRU firm in November 2020, and is
The group’s principal activity is that of a therefore required to continue to meet
wrap platform service provider. the requirements for a further period
of twelve months. Having met the
The Nucleus wrap allows customers definition of a significant IFPRU firm,
to invest directly, or via various ‘tax the group also falls into the enhanced
wrappers’ into a broad range of asset SM&CR firm category and is required to
types, including cash, unit trusts, OEICs, be enhanced-compliant by August 2021.
ETFs, investment trusts and other
securities. NIFAS is not regulated by the FCA and
has ceased trading.
NFS is authorised and regulated by
the FCA as an IFPRU limited licence The audited financial statements of the
investment firm. In addition, NFS has group, company and NFS, along with
additional FCA and HMRC obligations the group’s Pillar 3 disclosure, can be
relating to its activities as an operator found on the company’s website https://
of a self-invested personal pension nucleusfinancial.com/investors and they
scheme (a Sipp operator) and also are also available on request from the
those relating to the management of company secretary.
individual savings accounts (an Isa
manager). NFS is authorised to hold
and control client money as part of its
activities and is therefore subject to the
FCA’s Cass rules.
44
Directors’ report
Business review and Qualifying indemnity The Covid-19 pandemic required most
of our employees to work remotely from
strategic report provisions
their homes for most of the financial
The strategic report includes a detailed As permitted by the company’s articles year. In adopting these practices,
business review that is set out in the of association directors’ professional extensive and enhanced use of online
chairman’s statement, chief executive’s indemnity insurance has been provided and virtual workplace tools were
report and chief financial officer’s to all directors and this arrangement adopted, and we will continue to use
report on pages 3 to 19. Within these was in place throughout the year. As these in future to reduce travel and our
parts of the strategic report we set out part of the company’s admission to AIM, resultant carbon footprint.
information relating to: customary indemnities were provided
to certain directors during the year and
• How we fulfil our duties under s172 remain in force. Directors
of the Companies Act 2006, and The directors who served during the
in taking decisions, ensure that year and up to the date of signing the
we promote the success of the Greenhouse gas emissions,
financial statements were:
company as a whole. energy consumption and
• The development and performance energy efficiency action • T Dunley-Owen
of the business during the year. We recognise the threat posed by • D R Ferguson
• The financial position of the group at climate change and our responsibility to
• S J Geard
the end of the year. help the UK transition to a low-carbon
economy and also believe that action in • J P Gibson (resigned 25 February
• Key performance indicators, both this area is an important consideration 2020)
financial and non-financial, which for our people and our attractiveness as
are regularly assessed in relation • M Hassall
an employer.
to the development, performance, • J Levin
solvency and liquidity of the We have one office, which is a modern
business. leased building and we ensure that • J C Polin
it continues to meet required health,
• Information relating to likely future • J A A Samuels (chair)
safety and environmental standards that
developments of the business. are legally compliant and suitable for • A Tagliabue (appointed 25 February
our employees. We do not own or lease 2020)
Details of risk management objectives any company vehicles and have no
and policies relating to financial manufacturing operations.
instruments are set out in note 24 Company registration
financial instruments and in the risk The annual quantity of energy
consumed in the year from activities The company is a public company
management framework on pages 24.
for which the group was responsible limited by shares and is registered with
was 262,726 kWh which resulted the registrar of companies for England
Results and dividends in emissions of 61 tonnes of carbon and Wales with company number
dioxide equivalent. We calculated this 05522098.
The group’s profit for the year was
information from energy bills relating to
£3.2m (2019: £6.0m). Revenue
this period for our head office premises,
increased 0.6 per cent to £51.8m (2019: Political donations
and used 2020 government conversion
4.3 per cent to £51.5m) with operating
factors for greenhouse gas reporting. No political donations were made by the
profit decreasing by 41.5 per cent
group or the company during the year
to £4.2m (2019: up 25.8 per cent to We consider our most relevant
under review.
£7.1m). The full results are set out in the emissions intensity ratio to be tonnes
accompanying financial statements of CO2 per employee. For the financial
and notes. year ended 31 December 2020 this Share capital structure
intensity factor amounted to 0.25.
As Nucleus Financial Group plc is There were no changes to the share
the subject of a recommended cash capital structure during the year.
offer, the board has decided not
to recommend a final dividend in
respect of the financial year ended 31
December 2020.
45
Directors’ report
Authority to purchase own Implementation of the Scheme will This aggregate number consists of the
also require the passing of a special following categories:
shares
resolution, which requires the approval
The company’s articles of association of Nucleus shareholders representing at £
grant the authority to make market least 75 per cent of the votes cast, either Financial and corporate
purchases of its own shares. The in person or by proxy, at the Nucleus broking advice 2,386,242¹
directors confirm that, with the exception general meeting, which will be held Legal advice 370,000²
of matching shares relating to employee immediately after the Nucleus court
Accounting advice Nil
share schemes, the company has not meeting.
purchased any of its own shares during Public relations advice 15,000
In total, James Hay Holdings has Other professional
the year.
received irrevocable undertakings to services Nil
vote, or procure the voting, in favour of
Other costs and
Post balance sheet events the Scheme at the Nucleus court meeting
expenses 45,150
and the special resolution at the Nucleus
On 9 February 2021, the boards of general meeting (or in the event that the Total (excluding VAT) 2,816,392
Nucleus and James Hay Holdings Scheme is implemented by way of a Total³ estimated cost
announced that they had agreed takeover offer as defined in Chapter 3 of to company 3,379,670
the terms of a recommended all Part 28 of the Companies Act (the “Offer”),
cash offer to be made by James Hay to accept or procure acceptance of the
Holdings, pursuant to which James ¹ The total amount payable in respect of the
Offer) from Nucleus shareholders holding aggregate fees and expenses for these services
Hay Holdings is to acquire the entire in aggregate 42,732,982 Nucleus shares depends on whether the Acquisition becomes
issued and to be issued share capital (representing approximately 55.88 per effective.
of Nucleus (the “Acquisition”). The cent of the existing issued share capital ² This total is based on estimates and does not
Acquisition is intended to be effected by of Nucleus as at 4 March 2021).
include disbursements.
way of a court-sanctioned scheme of ³ Nucleus is subject to a partial VAT exemption, as
arrangement between Nucleus and the The Acquisition is subject to receipt of such limited VAT is expected to be reclaimed by the
consent from the FCA. group for these costs
Nucleus shareholders under Part 26 of
the Companies Act (the “Scheme”). The current non-executive directors of The Acquisition is considered to be a
Features and potential implications of Nucleus will resign from Nucleus on or non adjusting post balance sheet event.
the recommended offer if approved are: after the effective date of the Scheme.
There were no other subsequent events
The price offered by James Hay The admission of Nucleus shares to that required adjustment to or disclosure
Holdings for the Acquisition of 188 trading on AIM will be cancelled as of or in the financial statements for the period
pence per Nucleus share equates to shortly following the effective date of the from 31 December 2020 to the date
total consideration for the Acquisition of Scheme. upon which the financial statements
approximately £144.621 million. Outstanding unvested awards granted were available to be issued.
The Scheme requires the approval of under the LTIP will vest and become
a majority in number of those Scheme exercisable to the extent determined
shareholders who are present and by the Nucleus Remuneration and HR
vote, either in person or by proxy, Committee.
and who represent not less than The aggregate fees and expenses
75 per cent, in nominal value of the expected to be incurred by Nucleus
Scheme shares voted by such Scheme in connection with the Acquisition are
shareholders at the Nucleus court estimated to amount to £2,816,392,
meeting (expected to be held on excluding applicable VAT and other
30 March 2021). taxes.
46
Directors’ report
Going concern Material uncertainty in relation to Auditor

going concern
With regard to the assessment of the The auditors, PricewaterhouseCoopers
group and company’s ability to continue As set out in the post balance sheet LLP, have indicated their willingness to
as a going concern, the directors events disclosure above, the group is be re-appointed and a resolution for
evaluate this taking into account: the subject of an all cash offer from their reappointment will be proposed at
James Hay Holdings that, if successful, the Annual General Meeting.
• The latest business plan projections, is expected to complete in the next 12
months. Whereas the directors note This report was approved by the board
stressed for significant events that
the intentions of James Hay Holdings on 22 March 2021 and signed on its
would have a material impact on the
as set out in the Scheme circular and behalf.
group and company’s profitability,
liquidity, solvency and regulatory whereas they do not have any reason to
capital position. believe that James Hay Holdings would
not continue to support the group and
• Actual performance to date. company or would materially change
• The current operating and trading their activities in the next 12 months, they
are not party to the detailed intentions David Ferguson
environment.
of the acquirer. Although this does not Director
• The current financial position, change the directors’ conclusion as to
adequacy of liquidity and capital to the appropriateness of preparing the
meet operational and regulatory financial statements of the group and
requirements (further details of the company on a going concern basis,
which are set out on page 18 of the it is considered to create a material
strategic report). uncertainty which may cast significant
• Known risks and uncertainties doubt on the group and company’s
(including in respect of Covid-19) ability to continue as a going concern.
with consideration of the impact of Accordingly, the financial statements do
these on the group and company’s not include the adjustments that would
solvency and liquidity position. result if the group or company were
unable to continue as a going concern.
• Known and expected changes in the
regulatory environment impacting
platform operators. Disclosure statement to the
external auditors
The directors also consider their
approach to assessing the group and the Each individual director confirms that,
company’s ability to continue as a going as far as they are aware, there is no
concern with reference to guidance from relevant audit information of which the
the Financial Reporting Council (FRC) and company’s auditor is unaware, and
the recommendations from the Sharman that they have taken all the steps that
Inquiry of 2012, which sought to identify ought to have been taken as a director
lessons for companies and auditors in order to make themselves aware of
addressing going concern and liquidity any relevant audit information and to
risks following the credit crisis. establish that the company’s auditor is
aware of that information.
Having regard to these matters, the
directors have a reasonable expectation
that the group and the company have
adequate resources to continue in
operational existence for at least 12
months from the date of this report.
The group and the company therefore
continue to adopt the going concern
basis in preparing their financial
statements.
47
Governance
Directors’ responsibility statement
The directors are responsible for preparing

the group strategic report, the directors’
report and the consolidated and company
financial statements in accordance with
applicable law and regulations.
Company law requires the directors • Prepare the financial statements on

to prepare financial statements for the going concern basis unless it is
each financial year. Under that law the inappropriate to presume that the
directors have elected to prepare the group will continue in business.
financial statements in accordance with
international accounting standards in The directors are responsible for
conformity with the requirements of the keeping adequate accounting records
Companies Act 2006 and international that are sufficient to show and explain
financial reporting standards adopted the company and group’s transactions
pursuant to Regulation (EC) No and disclose with reasonable accuracy
1606/2002 as it applies in the European at any time the financial position of the
Union. Under Company law the company and the group and enable
directors must not approve the financial them to ensure that the financial
statements unless they are satisfied that statements comply with the Companies
they give a true and fair view of the state Act 2006. They are also responsible for
of affairs of the company and the group safeguarding the assets of the company
and of the profit or loss of the company and the group and hence for taking
and group for that period. reasonable steps for the prevention
and detection of fraud and other
In preparing these financial statements,
irregularities.
the directors are required to:
The directors are responsible for
• Select suitable accounting policies the maintenance and integrity of
for the group’s financial statements the company’s website. Legislation
and then apply them consistently. in the United Kingdom governing
the preparation and dissemination
• Make judgments and accounting
of financial statements and other
estimates that are reasonable and
information included in the directors’
prudent.
report may differ from legislation in
• State whether applicable IFRSs other jurisdictions.
as adopted by the UK have been
followed, subject to any material
departures disclosed and explained
in the financial statements.
David Ferguson
Director
48
Strategic report Governance Financials Annual report and financial statements 2020
Financials
Independent auditors’ report to the members of

Nucleus Financial Group plc
Report on the audit of the financial statements
Opinion Basis for opinion

In our opinion, Nucleus Financial Group plc’s group financial We conducted our audit in accordance with International
statements and company financial statements (the “financial Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
statements”): Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
• give a true and fair view of the state of the group’s and of statements section of our report. We believe that the audit
the company’s affairs as at 31 December 2020 and of the evidence we have obtained is sufficient and appropriate to
group’s profit and the group’s and company’s cash flows provide a basis for our opinion.
for the year then ended;
• have been properly prepared in accordance with Independence
international accounting standards in conformity with the
requirements of the Companies Act 2006; and We remained independent of the group in accordance with
the ethical requirements that are relevant to our audit of the
• have been prepared in accordance with the requirements financial statements in the UK, which includes the FRC’s Ethical
of the Companies Act 2006. Standard, as applicable to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these
We have audited the financial statements, included within requirements.
the Annual Report and Financial Statements (the “Annual
Report”), which comprise: the Consolidated statement of
comprehensive income, the Consolidated and Company Material uncertainty related to going concern
statements of financial position as at 31 December 2020; the
In forming our opinion on the financial statements, which
Consolidated and Company statements of changes in equity
is not modified, we have considered the adequacy of
and the Consolidated and Company statements of cash
the disclosure made in note 1 to the financial statements
flows for the year then ended; and the notes to the financial
concerning the group’s and the company’s ability to continue
statements, which include a description of the significant
as a going concern. On 9 February 2021, the company’s
accounting policies.
board announced they had agreed terms of a recommended
all cash offer to be made by James Hay Holdings Limited
Separate opinion in relation to international for the entire issued and to be issued share capital of the
company. Subject to shareholder and regulatory approval this
financial reporting standards adopted transaction is expected to complete in the next 12 months and
pursuant to Regulation (EC) No 1606/2002 as it the company will therefore be under new ownership. While the
applies in the European Union directors do not have any reason to believe that the acquirer
will not continue to support the company or materially change
As explained in note 1 to the group financial statements,
its activities in the next 12 months, they do not have visibility
the group, in addition to applying international accounting
over the future intentions of the acquirer. These conditions,
standards in conformity with the requirements of the
along with the other matters explained in note 1 to the financial
Companies Act 2006, has also applied international financial
statements, indicate the existence of a material uncertainty
reporting standards adopted pursuant to Regulation (EC) No
which may cast significant doubt about the group’s and the
1606/2002 as it applies in the European Union.
company’s ability to continue as a going concern. The financial
In our opinion, the group financial statements have been statements do not include the adjustments that would result
properly prepared in accordance with international financial if the group and the company were unable to continue as a
reporting standards adopted pursuant to Regulation (EC) No going concern.
1606/2002 as it applies in the European Union.
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
49
Our evaluation of the directors’ assessment of the group’s and

the company’s ability to continue to adopt the going concern
Our audit approach
basis of accounting included:
Overview
• Obtained and evaluated the Directors going concern
assessment which reflects conditions up to the point of the Audit scope
approval of the annual report and financial statements.
We obtained evidence to support key assumptions driving • The group financial statements comprise the consolidation
the directors’ assessment. This included understanding of three individual components, each of which represents
and challenging management’s scenarios and cash an individual legal entity within the group.
flow models which consider the potential impact on • We performed a full scope audit of the complete financial
financial markets of COVID-19, assessing management’s information of these three components, which together
key assumptions for reasonableness and checking the represent 100% of the group’s profit before tax.
mathematical accuracy of the models;
• Specific audit procedures were also performed over
• Performed look-back procedures on management’s consolidation adjustments required to aggregate the three
previous assessments to determine the reasonableness individual components together to form the group financial
and accuracy of the forecasts and assumptions used; statements.
• Assessed the reasonableness and achievability of any
mitigating actions that management have identified in their Key audit matters
scenarios;
• Revenue Recognition
• Considered the output of management’s models and
• Impact of COVID-19
concluded that sufficient liquidity and compliance with
regulatory capital requirements are forecast to be
maintained over the immediate 12 month period following Materiality
the date of the approval of the financial statements;
• Overall group materiality: £201,000 (2019: £350,100) based
• Evaluated the Directors’ assessment of the group and on 5% of profit before tax.
company’s operational resilience in the wake of COVID-19,
• Overall company materiality: £196,980 (2019: £200,003)
considering their consistency with other available
based on 1% of total expenses.
information and our understanding of the business and
assessing potential impact on the financial statements; • Performance materiality: £150,000 (group) and £147,735
and (company).
• Assessed the adequacy of management’s disclosures in
the financial statements and relevant “other information” The scope of our audit
and checked consistency with the financial statements and
our knowledge based on our audit. As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
Our responsibilities and the responsibilities of the directors statements.
with respect to going concern are described in the relevant
sections of this report.
Capability of the audit in detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with
our responsibilities, outlined in the Auditors’ responsibilities for
the audit of the financial statements section, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with
laws and regulations related to but were not limited to; any
breaches of UK regulatory principles, such as those governed
by the Financial Conduct Authority or AIM listing rules, and
we considered the extent to which non-compliance might
have a material effect on the financial statements. We also
considered those laws and regulations that have a direct
50
impact on the preparation of the financial statements such In addition to going concern, described in the Material
as the Companies Act 2006. We evaluated management’s uncertainty related to going concern section above, we
incentives and opportunities for fraudulent manipulation of the determined the matters described below to be the key audit
financial statements (including the risk of override of controls), matters to be communicated in our report. This is not a
and determined that the principal risks were related to manual complete list of all risks identified by our audit.
elements of the control environment, such as journal entries,
The key audit matters below are consistent with last year.
intercompany accounts and accrual balances and areas of
significant judgement such as provisions and other critical
accounting estimates. Audit procedures performed by the Key audit matter – Revenue Recognition
engagement team included:
Revenue is material to the group and is an important
• Obtained an understanding of the legal and regulatory determinant of the group’s profitability. The sole revenue stream
framework applicable to Nucleus and how the entity is of the group is fees charged to customers for the provision of
complying with that framework; platform services. This revenue stream is calculated based on
fixed rates, applicable to each respective product, and the value
• Held discussions with management and those charged of assets held on the platform each day.
with governance including making specific inquiries about
any consideration of known or suspected instances of non- Revenue may be misstated due to errors in system calculations
compliance with laws and regulation and fraud. or manual processes, for example, arising from incorrect
securities prices or values of assets under administration,
• Reviewed minutes of meetings of those charged with or application of incorrect product fee rates used in these
governance; calculations and processes.
• Audited the risk of management override of controls, Further, there are incentive schemes in place for directors
including through testing journal entries and other and staff which are in part a function of the group’s revenue
adjustments for appropriateness, auditing material performance. Where there are incentives based on
intercompany and accrual balances, testing accounting performance, there is an inherent risk of fraud in revenue
estimates (because of the risk of management bias), and recognition as there is an inherent incentive to misstate revenue.
evaluating the business rationale of significant transactions
outside the normal course of business; and. Unauthorised changes to, or errors in, these inputs and
calculations could lead to a misstatement of revenue.
• Incorporated unpredictability into the nature, timing and/or
extent of our audit procedures.
How our audit addressed the key audit matter
There are inherent limitations in the audit procedures We obtained an understanding of the revenue recognition
described above. We are less likely to become aware of policy applied by management and ensured it complied with
instances of non-compliance with laws and regulations that the stated accounting policy.
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a For the aggregate revenue balance, we performed substantive
material misstatement due to fraud is higher than the risk of testing procedures taking the core assets under management
not detecting one resulting from error, as fraud may involve information and the fee rates applied to customers and
deliberate concealment by, for example, forgery or intentional calculated an expectation of the revenue balance, inclusive of
misrepresentations, or through collusion. any discounts applicable to each customer, on a daily basis.
In order to rely on the assets under administration data we;
Key audit matters • Selected a sample of the underlying customer holdings of

Key audit matters are those matters that, in the auditors’ individual securities at various dates throughout the period
professional judgement, were of most significance in the audit and obtained independent confirmation of their holdings.
of the financial statements of the current period and include The results of this testing provided sufficient evidence
the most significant assessed risks of material misstatement for us to determine that the assets under administration
(whether or not due to fraud) identified by the auditors, including data was reliable for the purposes of performing our
those which had the greatest effect on: the overall audit substantive testing.
strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters, and any In order to rely on the fee rates applied to client assets we;
comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial • Tested the fee rates applied to the value of customers’
statements as a whole, and in forming our opinion thereon, and assets to the underlying offer documents of Nucleus
we do not provide a separate opinion on these matters. products; and
• Validated the accuracy of the products assigned to
client assets through inspection of original application
documents.
51
We compared our independent calculation to the amount How we tailored the audit scope
reported and noted immaterial differences.
We tailored the scope of our audit to ensure that we performed
In addition, we have performed testing over manual journal enough work to be able to give an opinion on the financial
entries which impact revenue. We specifically target tested statements as a whole, taking into account the structure of
larger manual journal balances, and those with unusual the group and the company, the accounting processes and
account combinations. Through our procedures performed no controls, and the industry in which they operate.
instances of fraud in revenue recognition were identified.
The group is structured as one segment, comprising the
consolidation of three individual components, each of which
Key audit matter – Impact of COVID-19 represents an individual legal entity within the group. All of
these components were considered financially significant and
The group operates a wrap platform that administers financial we performed a full scope audit of their complete financial
products such as pensions, ISAs and investments on behalf information. Together these components represent 100 per
of customers. The group primarily generates Revenue from cent of the group’s profit before tax. Specific audit procedures
contractual basis point rate cards applied to the daily valuation were also performed over consolidation adjustments required
of assets under administration. to aggregate the three individual components together to
The COVID-19 outbreak has been declared a pandemic by form the group financial statements. All of the audit work
the World Health Organisation. Since the first quarter of 2020, was performed by the group engagement team based in
it has caused significant economic uncertainty globally and Edinburgh. The company is a holding company, as well as
disruption to supply chains and travel, slowed global growth contracting services on behalf of the group and being the
and caused volatility in global markets and in exchange rates. main employer. It does not trade outside of the group. The
only material income it received during the year was income
In response to the continued uncertainty across financial received from its subsidiaries.
markets and the potential impacts on the group as a
result of the ongoing COVID-19 pandemic, management
have modelled both market stress and other downside Materiality
scenarios as part of their going concern assessment. These The scope of our audit was influenced by our application
scenarios consider the impacts on the value of assets under of materiality. We set certain quantitative thresholds for
administration from a prolonged downturn in financial materiality. These, together with qualitative considerations,
markets, as well as impacts of changes to regulatory capital helped us to determine the scope of our audit and the
requirements, underperformance of key revenue streams nature, timing and extent of our audit procedures on the
and the impacts of any regulator-imposed fines or sanctions. individual financial statement line items and disclosures and in
As part of their consideration, management have identified evaluating the effect of misstatements, both individually and in
a number of possible mitigating actions, across the range of aggregate on the financial statements as a whole.
scenarios, for example, the suspension of dividend payments,
their ability to utilise overdraft facilities and reduction of areas Based on our professional judgement, we determined
of discretionary spend. materiality for the financial statements as a whole as follows:
Following the consideration of these scenarios, management Financial statements Financial statements
has prepared the financial statements of the group and - group - company
company on a going concern basis, and believe this
assumption remains appropriate. This conclusion is based on Overall £201,000 (2019: £196,980 (2019:
the assessment that, notwithstanding the significant market materiality £350,100). £200,003).
uncertainties, they are satisfied that the group and company
How we 5% of profit before 1% of total expenses
have adequate resources to continue in operational existence
determined it tax
for the foreseeable future and that they will be able to continue
to successfully provide platform services throughout the Rationale for The consolidated As the company is
COVID-19 pandemic. benchmark Nucleus Financial not profit orientated,
applied Group plc group is a with its primary
profit oriented group purpose being a
How our audit addressed the key audit matter
and therefore we holding and service
Our procedures and conclusions in respect of the Directors’ are satisfied that the company for the
going concern assessment are included in the “material use of profit before group, we have
uncertainty related to going concern” section above. tax is an appropriate calculated materiality
benchmark. with reference total
We reviewed the disclosures in the financial statements in
expenses, with this
respect of the impact of COVID-19 and concluded that these
being a generally
are appropriate. Based on the work performed, we found
accepted auditing
that management’s conclusions in respect of the impact of
benchmark.
COVID-19 on the group and company is appropriate.
52
For each component in the scope of our group audit, we Strategic report and Directors’ report
allocated a materiality that is less than our overall group
In our opinion, based on the work undertaken in the course
materiality. The range of materiality allocated across
of the audit, the information given in the Strategic report
components was between £39 and £196,980. Certain
and Directors’ report for the year ended 31 December 2020
components were audited to a local statutory audit materiality
is consistent with the financial statements and has been
that was also less than our overall group materiality.
prepared in accordance with applicable legal requirements.
We use performance materiality to reduce to an appropriately
In light of the knowledge and understanding of the group and
low level the probability that the aggregate of uncorrected
company and their environment obtained in the course of the
and undetected misstatements exceeds overall materiality.
audit, we did not identify any material misstatements in the
Specifically, we use performance materiality in determining
Strategic report and Directors’ report.
the scope of our audit and the nature and extent of our testing
of account balances, classes of transactions and disclosures,
for example in determining sample sizes. Our performance Directors’ remuneration
materiality was 75% of overall materiality, amounting to
£150,000 for the group financial statements and £147,735 for The company voluntarily prepares a Directors’ Remuneration
the company financial statements. Report in accordance with the provisions of the Companies
Act 2006. The directors requested that we audit the part of the
In determining the performance materiality, we considered Directors’ Remuneration Report specified by the Companies
a number of factors - the history of misstatements, risk Act 2006 to be audited as if the company were a quoted
assessment and aggregation risk and the effectiveness of company.
controls - and concluded that an amount at the upper end of
our normal range was appropriate. In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
We agreed with those charged with governance that we the Companies Act 2006.
would report to them misstatements identified during our
audit above £10,000 (group audit) (2019: £17,505) and £9,849
(company audit) (2019: £10,000) as well as misstatements Responsibilities for the financial statements
below those amounts that, in our view, warranted reporting for and the audit
qualitative reasons.
Responsibilities of the directors for the financial statements
Reporting on other information As explained more fully in the Directors’ Responsibilities

Statement, the directors are responsible for the preparation
The other information comprises all of the information in the
of the financial statements in accordance with the applicable
Annual Report other than the financial statements and our
framework and for being satisfied that they give a true
auditors’ report thereon. The directors are responsible for the
and fair view. The directors are also responsible for such
other information. Our opinion on the financial statements
internal control as they determine is necessary to enable the
does not cover the other information and, accordingly, we do
preparation of financial statements that are free from material
not express an audit opinion or, except to the extent otherwise
misstatement, whether due to fraud or error.
explicitly stated in this report, any form of assurance thereon.
In preparing the financial statements, the directors are
In connection with our audit of the financial statements, our
responsible for assessing the group’s and the company’s
responsibility is to read the other information and, in doing
ability to continue as a going concern, disclosing, as
so, consider whether the other information is materially
applicable, matters related to going concern and using the
inconsistent with the financial statements or our knowledge
going concern basis of accounting unless the directors either
obtained in the audit, or otherwise appears to be materially
intend to liquidate the group or the company or to cease
misstated. If we identify an apparent material inconsistency or
operations, or have no realistic alternative but to do so.
material misstatement, we are required to perform procedures
to conclude whether there is a material misstatement of the
financial statements or a material misstatement of the other Auditors’ responsibilities for the audit of the financial statements
information. If, based on the work we have performed, we Our objectives are to obtain reasonable assurance about
conclude that there is a material misstatement of this other whether the financial statements as a whole are free from
information, we are required to report that fact. We have material misstatement, whether due to fraud or error, and to
nothing to report based on these responsibilities. issue an auditors’ report that includes our opinion. Reasonable
With respect to the Strategic report and Directors’ report, we assurance is a high level of assurance, but is not a guarantee
also considered whether the disclosures required by the UK that an audit conducted in accordance with ISAs (UK) will always
Companies Act 2006 have been included. detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
Based on our work undertaken in the course of the audit, if, individually or in the aggregate, they could reasonably be
the Companies Act 2006 requires us also to report certain expected to influence the economic decisions of users taken on
opinions and matters as described below. the basis of these financial statements.
53
Our audit testing might include testing complete populations

of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting
a limited number of items for testing, rather than testing
complete populations. We will often seek to target particular
items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw
a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at: www.
frc.org.uk/auditorsresponsibilities. This description forms part
of our auditors’ report.
Use of this report

This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for
no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent
in writing.
Other required reporting

Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
• we have not obtained all the information and explanations

we require for our audit; or
• adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by
law are not made; or
• the company financial statements are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Lindsay Gardiner (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
22 March 2021
54
Consolidated statement of comprehensive income
2020 2019
Note £'000 £'000
Continuing operations
Revenue 3 51,809 51,517
Cost of sales (23,280) (22,817)
Gross profit 28,529 28,700
Other operating income 4 89 122

Administrative expenses (24,460) (21,718)
Operating profit 4,158 7,104
Comprising
Adjusted EBITDA 5,711 7,923
Right of use liability interest included in adjusted EBITDA 168 180
Right of use depreciation included in adjusted EBITDA 437 438
Amortisation (22) -
Depreciation (1,021) (1,102)
Loss on disposal of fixed asset - (3)
Other income 14 17
Exceptional items - OpenWealth acquisition fees (217) -
Exceptional items - James Hay Holdings offer fees (113) -
Share based payments (799) (349)
Finance income 8 40 80
Finance costs 8 (168) (182)
Profit before income tax 5 4,030 7,002
Income tax 10 (852) (1,049)
Profit for the year 3,178 5,953
Items that may be subsequently reclassified to profit and loss - -
Total comprehensive income attributable to equity holders 3,178 5,953
Earnings per share (pence)

Basic 12 4.2 7.8
Diluted 12 4.1 7.8
The notes on pages 59 to 87 form part of these financial statements.
55
Consolidated statement of financial position
2020 2019
Note £'000 £'000
Assets
Non-current assets
Intangible assets 14 2,258 253
Right of use lease assets 15 3,026 3,476
Property, plant and equipment 16 1,944 1,698
Deferred tax 25 229 107
7,457 5,534
Current assets
Trade and other receivables 17 11,157 10,530
Investments in securities 18 201 107
Cash and cash equivalents 19 17,546 18,525
28,904 29,162
Total assets 36,361 34,696
Equity
Shareholders' equity
Called up share capital 22 76 76
Capital redemption reserve 23 53 53
Share-based payment reserve 23 1,174 465
Treasury shares 23 (223) (121)
Retained earnings 23 21,651 19,233
Total equity 22,731 19,706
Liabilities
Non-current liabilities
Lease liabilities 21 3,243 3,737
Provisions 27 223 99
3,592 3,858
Current liabilities
Lease liabilities 21 494 475
Trade and other payables 20 8,343 9,606
Tax payable 465 357
10,038 11,132
Total liabilities 13,630 14,990
Total equity and liabilities 36,361 34,696
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 22 March 2021.
Stuart Geard
Director
56
Consolidated statement of changes in equity
Share-
Called Capital based
up share Retained Treasury redemption payment
capital earnings shares reserve reserve Total equity
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2020 76 19,233 (121) 53 465 19,706
Changes in equity
Profit for the year - 3,178 - - - 3,178
Dividends paid 11 - (760) - - - (760)
Purchase of own shares - - (102) - - (102)
Share-based payments
charge (excl NIC) 26 - - - - 709 709
Balance at 31 December 2020 76 21,651 (223) 53 1,174 22,731
Share-
Called Capital based
up share Retained Treasury redemption payment
capital earnings shares reserve reserve Total equity
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2019 76 17,224 (30) 53 150 17,473
IFRS 16 conversion - (71) - - - (71)
Changes in equity
Dividends paid 11 - (3,873) - - - (3,873)
Purchase of own shares - - (91) - - (91)
charge (excl NIC) 26 - - - - 315 315
Balance at 31 December 2019 76 19,233 (121) 53 465 19,706
57
Consolidated statement of cash flows
2020 2019
Note £'000 £'000
Cash flows from operating activities
Cash inflows from operations 28 3,741 6,790
Interest received 8 40 80
Income tax paid (762) (855)
Net cash inflow from operating activities 3,019 6,015
Cash flows from investing activities

Business combination payment 13 (1,500) -
Purchase of intangible fixed assets 14 (72) (253)
Purchase of tangible fixed assets 16 (817) (348)
Purchase of investments 18 (94) (16)
Net cash outflow from investing activities (2,483) (617)
Cash flows from financing activities

Interest paid 8 (168) (182)
Dividends paid 11 (760) (3,873)
Purchase of Treasury shares (102) (91)
Lease payments - principal 21 (475) (393)
Net cash outflows from financing activities (1,505) (4,539)
(Decrease)/increase in cash and cash equivalents (969) 859
Cash and cash equivalents at beginning of year 18,525 17,672
Effects of exchange rate changes 5 (10) (6)
Cash and cash equivalents at end of year 19 17,546 18,525
58
Notes to the consolidated financial statements
1. Accounting policies Material uncertainty in relation to going concern

As set out in note 34. events after the reporting period below,
Basis of preparation the group is the subject of an all cash offer from James Hay
These financial statements have been prepared in accordance Holdings that, if successful, is expected to complete in the next
with international accounting standards in conformity with 12 months. Whereas the directors note the intentions of James
the requirements of the Companies Act 2006 (‘IFRS’) and the Hay Holdings as set out in the Scheme circular and whereas
applicable legal requirements of the Companies Act 2006. In they do not have any reason to believe that James Hay Holdings
addition to complying with international accounting standards would not continue to support the group and company or
in conformity with the requirements of the Companies Act would materially change their activities in the next 12 months,
2006, the consolidated financial statements also comply with they are not party to the detailed intentions of the acquirer.
international financial reporting standards adopted pursuant Although this does not change the directors’ conclusion as to
to Regulation (EC) No 1606/2002 as it applies in the European the appropriateness of preparing the financial statements of
Union. The financial statements have been prepared on a going the group and the company on a going concern basis, it is
concern basis, under the historical cost convention as modified considered to create a material uncertainty which may cast
by the recognition of certain financial assets measured at fair significant doubt on the group and company’s ability to continue
value. Unless otherwise stated, the accounting policies set out as a going concern. Accordingly, the financial statements do
below have been applied consistently in both years presented not include the adjustments that would result if the group or
in these financial statements. company were unable to continue as a going concern.
The preparation of the financial statements in compliance with

international accounting standards requires the use of certain Segmental reporting
critical accounting estimates. It also requires management Operating segments are reported in a manner consistent with
to exercise judgement in applying the group and company’s the internal reporting provided to the executive committee (the
accounting policies. The areas where significant judgements chief operating decision maker). The board tasks responsibility
and estimates have been made in the preparation of the to the executive committee to assess the financial performance
financial statements are detailed in note 2. and the position of the group and make strategic decisions
and allocate resources.
Basis of consolidation Nucleus’ principal activities are the provision of wrap
The consolidated financial statements comprise the financial administration services and there is only one reporting
statements of the company and all its subsidiary undertakings. and operating segment as defined under IFRS 8 Operating
Segments. This is reviewed on a regular basis. It is considered
Subsidiaries are entities controlled by the company. Control appropriate that management review the performance of the
is achieved where the group has existing rights that give it group by reference to total results against budget.
the current ability to direct the relevant activities that affect the
returns and exposure or rights to variable returns from the The main financial performance measures are assets under
entity. Subsidiaries are included in the consolidated financial administration on the platform, gross and net inflows onto the
statements of the group from the date control of the subsidiary platform, revenue, adjusted EBITDA, profit for the year, dividend
commences until the date that control ceases. Intragroup paid, adjusted EBITDA margin, consolidated operating profit,
balances, and any unrealised gains and losses or income and consolidated profit after tax and consolidated net assets. These
expenses arising from intragroup transactions, are eliminated are disclosed in the chief financial officer’s report, where non-
in preparing the consolidated financial statements. Gaap financial performance measures are also identified. The
operating profit to adjusted EBITDA reconciliation is presented
Uniform accounting policies have been applied across the within the Consolidated statement of comprehensive income.
group. Non-Gaap measures are also defined in the definitions and
glossary section of the financial statements.
Going concern
After reviewing the group and the company’s forecasts and Revenue
projections, together with the results of modelled severe but Revenue comprises fees earned by the group from the
plausible stress tests on both the liquidity and regulatory provision of a wrap platform service to UK financial advisers
capital adequacy, and the current operating and trading and their clients. Fees are recognised exclusive of Value
environment, the directors have a reasonable expectation Added Tax and net of large case discounts. They are recorded
that the group and the company have adequate resources to in the year to which they relate and can be reliably measured.
continue in operational existence for at least 12 months from Platform fees are calculated monthly using contractual basis
the date of signing of the financial statements. The group point rate cards applied to the daily valuation of assets under
and the company therefore continues to adopt the going administration on the platform. Performance obligations are
concern basis in preparing their financial statements. Further satisfied as the wrap platform service is provided to customers
information relevant to the directors’ assessment of going over time. Accrued income represents fees that are collected in
concern is set out in the directors’ report on page 47. the following month.
59
Interest income Acquisition-related costs are expensed as incurred.

Interest received is recognised in the statement of The excess of the:
comprehensive income as it is earned.
• consideration, and
Finance costs • acquisition-date fair value of any previous equity interest in
the acquired entity
Interest expense is recognised in the statement of
comprehensive income in the year to which it relates.
over the fair value of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair
Expense recognition value of the net identifiable assets of the business acquired,
Expenditure incurred by the group is recognised in the year to the difference is recognised directly in profit or loss as a
which it relates. Any expenses relating to a year that have not bargain purchase.
yet been invoiced are accrued and expenses paid but which Where settlement of any part of cash consideration is deferred,
relate to future years are classified as prepayments within the the amounts payable in the future are discounted to their
statement of financial position. present value as at the date of exchange. The discount rate
used is the entity’s incremental borrowing rate, being the
Foreign currency rate at which a similar borrowing could be obtained from
an independent financier under comparable terms and
The group and company’s functional and presentation conditions.
currency is the Pound Sterling. Transactions in foreign
currencies are recorded at the rate ruling at the date of the Contingent consideration is classified as a financial liability.
transaction. At each year end, foreign currency monetary Amounts are subsequently remeasured to fair value, with
items are translated using the closing rate. Foreign exchange changes in fair value recognised in profit or loss.
gains and losses resulting from the settlement of transactions
at year end exchange rates of monetary assets denominated Goodwill
in foreign currencies are recognised in the statement of
comprehensive income. Goodwill arises on consolidation and represents the excess of
the purchase consideration for a business over the fair value
of any identifiable assets and liabilities acquired. Goodwill is
Dividends not amortised but is tested annually for impairment or more
Dividends are recorded in the financial statements in the frequently where impairment indicators exist. Impairment
year in which they are approved by the shareholders. Interim losses are recorded in the consolidated statement of
dividends are recognised when paid. comprehensive income, and any recorded losses are not
subsequently reversed.
Business combinations
Externally acquired intangible assets
The acquisition method of accounting is used to account
for all business combinations, regardless of whether equity Intangible assets that are acquired from third parties are
instruments or other assets are acquired. The consideration recognised on the balance sheet at cost and amortised over
transferred for the acquisition of a business combination the expected useful life. The costs of externally acquired
comprises the: intangibles includes the purchase consideration and directly
attributable costs of preparing the asset for its intended use.
• fair values of the assets transferred, Impairment reviews are carried out where there are indicators
of impairment.
• liabilities incurred to the former owners of the acquired
business, and
Internally generated intangible assets
• fair value of any asset or liability resulting from a
contingent consideration arrangement, Expenditure on internally generated brands, goodwill and
the maintenance of intangible assets is expensed. Where
Identifiable assets acquired and liabilities and contingent development expenditure is incurred that satisfies the general
liabilities assumed in a business combination are, with asset recognition criteria and where there is the intention,
limited exceptions, measured initially at their fair values at the feasibility and capability to complete the development, then
acquisition date. this expenditure is capitalised. The cost of internally generated
intangible assets includes directly attributable third party and
internal staff costs. Impairment reviews are carried out where
there are indicators of impairment.
60
Amortisation of intangible assets Cash and cash equivalents

Intangible assets with a limited useful life, once brought into Cash and cash equivalents include cash in hand and deposits
use, are amortised using the straight-line method over the held at call with banks. Bank overdrafts are shown within
following period: current liabilities due less than one year. Cash equivalents
are highly liquid investments that mature no more than three
Licenses 5 years
months from the date of acquisition and that are readily
convertible to known amounts of cash with insignificant risk of
Property, plant and equipment change in value.
Tangible fixed assets are stated at historic cost less
depreciation. Cost includes the original purchase price of the Defined contribution pension scheme
asset and the costs attributable to bringing the asset to its
Nucleus Financial Group plc operates a defined contribution
working condition for its intended use. Impairment reviews are
pension scheme. The pension charge represents the amounts
carried out where there are indicators of impairment.
payable by the group and the company to the scheme in
Depreciation is charged so as to allocate the cost of the assets respect of the year and contributions are recognised as an
less their residual value over their estimated useful lives, using expense when they are due. Once the contributions have been
the straight-line method. paid, the group and the company have no further payment
obligations. The assets of the scheme are held separately
The estimated useful lives range as follows:
from those of Nucleus Financial Group plc in an independently
Fixtures and fittings 4 years straight line administered fund.
Office equipment 3 years straight line
Short term leasehold property 10 years straight line
The company operates a number of equity settled share-
Gains and losses on disposals are determined by comparing
based payment compensation plans, under which the group
the proceeds with the carrying amount and are recognised in
receives services from directors and senior managers as
the statement of comprehensive income.
consideration for equity instruments (options or shares) of the
company. These are accounted for in accordance with IFRS 2
Impairment of assets Share-based payments. The fair value of services received by
the group in exchange for the grant of equity instruments is
The group tests Goodwill and intangible assets that have an
recognised as an expense over their vesting period.
indefinite useful life at least annually for impairment, or more
frequently where impairment indicators are identified. For other The total amount to be expensed or recognised as an increase
assets these are tested for impairment where impairment in the cost of investments is determined by reference to the
indicators are identified. Impairment tests assess whether the fair value of the equity instrument at the grant date and
carrying amount of the asset is greater than the estimated the number of options or shares expected to vest. Service
recoverable amount through use or disposal. For the purposes conditions are included in the assumptions about the number
of impairment testing, assets are grouped at the lowest level of equity instruments expected to vest. The relevant charge
where separate cash flows can be identified (cash-generating to the consolidated statement of comprehensive income or
unit). Where the carrying amount of the cash generating increase to the company’s investments is recognised over the
unit exceeds the recoverable amount, an impairment loss vesting period on a straight-line basis.
is recognised. With the exception of impairments relating to
At the end of each reporting period, the company revises its
goodwill, for impaired assets, to the extent that the recoverable
estimate of the number of equity instruments that are expected
amount exceeds the carrying amount, then the previously
to vest to reflect latest expectations on the employee’s ability
recognised impairment is reversed.
to achieve the specified performance criteria and actual or
anticipated leavers from the scheme. The company recognises
Leases the impact of any revision to the prior year’s estimates in
From 1 January 2019, leases are recognised as a right-of- the consolidated statement of comprehensive income or
use asset and a corresponding liability. Assets and liabilities company statement of financial position, with a corresponding
arising from a lease are initially measured on a present value adjustment to equity.
basis. Right-of-use assets are depreciated over the shorter
of the asset's useful life and the lease term on a straight-line
basis. Short term and low value leases are expensed. Details
of the assets can be found in note 15, and liabilities in note 21.
61
National insurance contribution (NIC) obligations arising from at the best estimate at the statement of financial position date
HMRC unapproved equity-settled schemes are treated as if of the expenditure required to settle the obligation, taking into
they are cash-settled, regardless of the equity determination account relevant risks and uncertainties.
of the scheme itself. The company LTIP scheme is a HMRC
When payments are eventually made, they are charged to the
unapproved equity-settled scheme. The NIC cost is recognised
provision carried in the statement of financial position.
over the vesting period of the options and is measured
with reference to the employers’ NIC rate applied to the
number of options expected to vest, valued at the share Financial instruments
price at the reporting date. Until the NIC obligation is settled
Financial assets and financial liabilities are initially classified
it is remeasured at the end of each reporting period and
as measured at amortised cost, fair value through other
at the date of settlement, with any changes in value being
comprehensive income, or fair value through profit and loss
recognised in the statement of comprehensive income.
when the group becomes a party to the contractual provisions
of the instrument. Financial assets are derecognised when
Employee benefits trusts the contractual rights to the cash flows expire, or the group no
longer retains the significant risks or rewards of ownership of
The company has established an Employee Share Ownership
the financial asset. Financial liabilities are derecognised when
Trust (ESOT) and a Share Incentive Plan (SIP) trust for the
the obligation is discharged, cancelled or expires.
purposes of satisfying awards under share-based incentive
and all employees share ownership plans. Shares held by Financial assets are classified dependent on the group’s
the trusts are recorded as treasury shares and deducted from business model for managing the financial and the cash flow
equity until the shares are cancelled, reissued or disposed. The characteristics of the asset. Financial liabilities are classified
employee benefits trusts are included within the consolidated and measured at amortised cost except for trading liabilities,
financial statements of the group. or where designated at original recognition to achieve more
relevant presentation. The group classifies its financial assets
and liabilities into the following categories:
Taxation
Current taxes are based on the results shown in the financial
Financial assets at amortised cost
statements and are calculated according to local tax rules,
using tax rates enacted or substantially enacted by the The group’s financial assets at amortised cost comprise trade
statement of financial position date. and other receivables. These represent debt instruments
with fixed or determinable payments that represent principal
Full provision is made for deferred tax assets and liabilities
or interest and where the intention is to hold to collect these
arising from all timing differences between the recognition of
contractual cash flows.
gains and losses in the financial statements and recognition in
the tax computation. They are initially recognised at fair value, included in current
and non-current assets, depending on the nature of the
A net deferred tax asset is recognised only if it can be
transaction, and are subsequently measured at amortised
regarded as more likely than not that there will be suitable
cost using the effective interest method less any provision for
taxable profits from which the future reversal of the underlying
impairment.
timing differences can be deducted.
Deferred tax assets and liabilities are calculated at the tax
Impairment of trade and other receivables
rates expected to be effective at the time the timing differences
are expected to reverse, based on tax laws that have been In accordance with IFRS 9 an expected loss provisioning
enacted or substantively enacted by the statement of financial model is used to calculate an impairment provision. We
position date. have implemented the IFRS 9 simplified approach to
measuring expected credit losses arising from trade and
Deferred tax assets and liabilities are not discounted as the
other receivables, being a lifetime expected credit loss. This is
impact of any discounting would be immaterial.
calculated based on an evaluation of our historic experience
plus an adjustment based on our judgement of whether this
Provisions for liabilities historic experience is likely reflective of our view of the future at
the balance sheet date.
Provisions are made where an event has taken place that
gives the group or the company a legal or constructive
obligation that probably requires settlement by a transfer of Financial liabilities at amortised cost
economic benefit, and a reliable estimate can be made of the
Financial liabilities at amortised cost comprise finance lease
amount of the obligation.
obligations and trade and other payables. They are classified
Provisions are charged as an expense to the statement of as current and non-current liabilities depending on the nature
comprehensive income in the year that the group or the of the transaction, are subsequently measured at amortised
company becomes aware of the obligation and are measured cost using the effective interest method.
62
Financial assets at fair value through profit and loss The adoption of these standards is not expected to have a
material impact on the group.
The group has investments held on the platform for operational
purposes. These are recognised and measured at fair value
using the most recent available market price with gains and 2. Critical accounting judgements, key sources
losses recognised immediately in the profit and loss.
of estimation uncertainty, and restatements
The fair value measurement of the group’s financial and
Estimates and judgements are continually evaluated and
non-financial assets and liabilities utilises market observable
are based on historical experience and other factors,
inputs and data as far as possible. Inputs used in determining
including expectations of future events that are believed to be
fair value measurements are categorised into different levels
reasonable under the circumstances. The critical accounting
based on how observable the inputs used in the valuation
judgements and the key sources of estimation uncertainty are
technique utilised are (the ‘fair value hierarchy’).
as follows:
Level 1 – Quoted prices in active markets
Level 2 – Observable direct or indirect inputs other than Level 1 Income taxes
inputs
The group is subject to income taxes. Judgement is required
Level 3 – Inputs that are not based on observable market data in determining the extent to which it is probable that taxable
profits and the exercise of share options under the LTIP scheme
The group measures financial instruments relating to platform
will result in the utilisation of deferred tax assets in future. The
holdings at fair value using Level 1.
group expects to materially recover its deferred tax assets
through the exercise of share options within the timeframe of
New standards effective for the first time in the 2020 financial the vesting periods of the LTIP scheme.
statements
Standard Effective from
Conceptual Framework – amendments The group assesses the fair value of shares under the LTIP
to references to the conceptual 1 January 2020 scheme at the grant date using appropriate valuation models,
framework in IFRS standards depending upon the nature of the performance criteria. At the
end of each reporting period, the company revises its estimate
Amendments to IFRS 3: Business of the number of options and shares under the LTIP scheme
1 January 2020
Combinations – definition of a business that are expected to vest to reflect latest expectations on the
group’s ability to achieve the specified performance criteria
Definition of materiality – amendments
1 January 2020 and actual or anticipated leavers from the schemes. For non-
to IAS 1 and IAS 8
market related performance criteria, the company recognises
Interest rate benchmark reform – the impact of any revision to the prior year’s estimates in the
1 January 2020
amendment to IFRS 9, IAS 39 and IFRS 7 statement of comprehensive income, with a corresponding
adjustment to equity.
Future standards, amendments to standards and
interpretations not early-adopted in the 2020 financial Provisions
statements
The group has recognised provisions in respect of client
New accounting standards and interpretations have been compensation, outsourced service, dilapidations and share
published that are not mandatory for adoption in the 2020 incentive plans. Further detail on these provisions, the rationale
financial statements. behind their recognition and the timing of future cash flow is
included in note 27.
Standard Effective from
Covid-19-Related Rent Concessions – Business combinations
1 June 2020
amendment to IFRS 16
As part of the business combination recognition, estimates
Reference to the Conceptual Framework and judgements are required to establish the fair value of
1 January 2022
– amendments to IFRS 3 assets and liabilities, contingent considerations and goodwill
at acquisition date. Judgement is also required in determining
IFRS 17: Insurance Contracts 1 January 2023
which parts of the agreement relate to the resolution of
Classification of Liabilities as Current or historical contractual arrangements and are therefore outside
1 January 2023
Non-current – amendments to IAS 1 the scope of IFRS 3 business combinations.
63
3. Revenue
Revenue comprises fees earned by the group from the provision of a wrap platform service to UK financial advisers and their
clients. All revenue arose within the United Kingdom (2019: all United Kingdom).
4. Other operating income

2020 2019
£'000 £'000
Other operating income 89 122
Other operating income includes a £75k R&D tax credit in respect of 2019 that has been recognised in 2020 under the RDEC
scheme (2019– £100k in respect of 2018 recognised in 2019).
5. Profit before income tax

The profit before income tax is stated after charging/(crediting):
2020 2019
£'000 £'000
Depreciation of tangible fixed assets 584 664
Depreciation of right of use assets 437 438
Interest on right of use assets 168 180
Loss on disposal of fixed assets - 3
Amortisation 22 -
Unrealised gain on investments - (7)
Foreign exchange differences 10 6
Movement in expected loss provision (42) 59
Share based payment charge 799 349
6. Employees
2020 2019
£'000 £'000
Wages and salaries 13,908 12,191
Social security costs 1,602 1,402
Other pension costs 1,083 997
Cost of employee share schemes 799 349
17,392 14,939
The average monthly number of employees during the year was as follows:
2020 2019
Employees 245 223
64
7. Directors' remuneration
Details of directors’ remuneration are set out in the remuneration and HR committee report on pages 42 to 43.
8. Net finance income/(costs)

2020 2019
£'000 £'000
Finance income:
Bank interest receivable 38 70
Other interest income 2 10
40 80
2020 2019
£'000 £'000
Finance costs
Lease interest (168) (180)
Other interest paid - (2)
(168) (182)
Net finance cost (128) (102)
9. Auditors' remuneration
The group paid the following amounts to its auditors in respect of the audit of the financial statements and for other services
provided to the group:

2020 2019*
£'000 £'000
Audit of the financial statements 159 182
Client asset audit services 126 175
All other services 45 30
330 387
* VAT inclusive
65
10. Income tax

Analysis of tax expense
2020 2019
£'000 £'000
Current tax:
Tax on profits for the year 866 1,271
Adjustments in respect of prior periods 5 (260)
Deferred tax:
Origination and reversal of timing differences (9) 24
Effect of tax rate on opening balances (10) 14
Total expense in statement of comprehensive income 852 1,049
Factors affecting the tax expense

The tax assessed for the year is higher (2019: lower) than the standard rate of corporation tax in the UK of 19.00 per cent (2019:
19.00 per cent).
The differences are reconciled below:
2020 2019
£'000 £'000
Profit before taxation 4,030 7,002
Profit before taxation multiplied by the standard rate of corporation tax in the UK of
19.00 per cent (2019: 19.00 per cent) 766 1,330
Effects of:
Expenses not deductible for tax purposes 204 84
Fixed asset differences 19 18
Adjustments to tax charge in respect of prior period R&D claims 14 (258)
Deferred tax not recognised 428 (218)
Adjustments to tax charge in respect of prior period (73) -
Short-term timing differences (470) -
Other differences (36) 93
852 1,049
66
11. Dividends
2020 2019
£'000 £'000
£0.001 ordinary share dividends* 1p (2019: 5.1p per share) 760 3,873
*The Esot waived its right to receive dividends during the year.
12. Earnings per share

Earnings per share has been calculated by dividing the total profit for the year by the weighted average number of ordinary
shares in issue during the year.
2020 2019
£'000 £'000
Profit for the year 3,178 5,953
2020 2019
Weighted average number of ordinary shares (basic) 75,798,656 75,862,105
SIP scheme 134,704 71,255
LTIP scheme 1,281,962 345,932
Weighted average number of ordinary shares (diluted) 77,215,322 76,279,292
2020 2019
Basic earnings per ordinary share (pence) 4.2 7.8
Diluted earnings per ordinary share (pence) 4.1 7.8
The weighted average number of ordinary shares reflect the number of shares in issue following the listing of the Company on 26
July 2018. The share capital transactions that happened during the year are detailed in note 22.

67
13. Business combination

On 11 December 2020 Nucleus Financial Group plc acquired the UK business and assets of Genpact Wealth Management UK
Limited (which operates under the trading name OpenWealth) as they pertain to Nucleus. In November 2018 Nucleus unbundled
its technology arrangements from OpenWealth, contracting directly with Bravura Solutions (UK) Ltd.
The board of Nucleus believes that the acquisition of the assets that pertain to Nucleus will allow the group to:
• further accelerate its product development and automation programme,

• provide scope to enhance the level and efficiency of its offline service,
• create new growth opportunities for its people, and
• accelerate the expansion of its operating margin as it grows AUA.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration £’000

Cash paid 1,500
Deferred consideration 88
Contingent consideration 382
Total purchase consideration 1,970
Nucleus is required to pay OpenWealth additional consideration in relation to certain contracts throughout 2021. The final amount
due will be determined on actual costs incurred by OpenWealth. The fair value of the consideration as at 31 December 2020 has
been based on the value of the costs expected to be incurred.
The assets and liabilities recognised as a result of the acquisition are as follow:
£’000
Property, plant and equipment 15
Goodwill 1,955
Net assets acquired 1,970
The goodwill is attributable to the skilled workforce and acquired wrap administration back offices processes, and the expected
synergies from combining the operations of Nucleus and OpenWealth. None of the goodwill recognised is expected to be
deductible for tax purposes.

68
14. Intangible assets

Goodwill Licences Total
Cost £'000 £'000 £'000
At 1 January 2020 - 253 253
Additions 1,955 72 2,027
Write-offs - - -
At 31 December 2020 1,955 325 2,280
Amortisation
At 1 January 2020 - - -
Charge for the year - 22 22
Impairments - - -
At 31 December 2020 - 22 22
Net book value

At 31 December 2020 1,955 303 2,258
At 31 December 2019 - 253 253
Goodwill Licences Total

Cost £'000 £'000 £'000
At 1 January 2019 - - -
Additions - 253 253
Write-offs - - -
At 31 December 2019 - 253 253
Amortisation
At 1 January 2019 - - -
Charge for the year - - -
Impairments - - -
At 31 December 2019 - - -
Net book value

At 31 December 2019 - 253 253
The licences costs capitalised represents development expenditure in relation to ancillary platform services. The remaining
contractual commitment in respect of the development expenditure amounts to £nil (2019 - £72,222). No impairment indicators
were identified during year.
Goodwill represents the excess of the purchase consideration for a business over the fair value of any identifiable assets and
liabilities acquired. Further details of the business combination are set out in note 13 above. The carrying amount of goodwill was
tested for impairment and no impairment is recognised.
69
15. Right of use lease assets

Right of use asset Finance lease
Greenside Office
Edinburgh equipment Total
£'000 £'000 £'000
Cost
At 1 January 2020 3,901 361 4,262
Additions - - -
Disposals - - -
At 31 December 2020 3,901 361 4,262
Depreciation
At 1 January 2020 438 348 786
Charge for the year 437 13 450
Eliminated on disposals - - -
At 31 December 2020 875 361 1,236
Net book value

At 31 December 2020 3,026 - 3,026
At 31 December 2019 3,463 13 3,476
Right of use asset Finance lease

Greenside Office
Edinburgh equipment Total
£'000 £'000 £'000
Cost
At 1 January 2019 - - -
Transition to IFRS 16 3,901 360 4,261
Additions - 1 1
Disposals - - -
At 31 December 2019 3,901 361 4,262
Depreciation
At 1 January 2019 - - -
Transition to IFRS 16 - 248 248
Charge for the year 438 100 538
Eliminated on disposals - - -
At 31 December 2019 438 348 786
Net book value

At 31 December 2019 3,463 13 3,476
No impairment indicators were identified during year.
70
16. Property, plant and equipment

Short-term
leasehold Fixtures and Office
property fittings equipment Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2020 1,147 551 1,458 3,156
Additions - 11 806 817
Disposals - - - -
At 31 December 2020 1,147 562 2,264 3,973
Depreciation
At 1 January 2020 213 257 988 1,458
Charge for the year 115 131 325 571
Eliminated on disposals - - - -
At 31 December 2020 328 388 1,313 2,029
Net book value

At 31 December 2020 819 174 951 1,944
At 31 December 2019 934 294 470 1,698
Short-term
£'000 £'000 £'000 £'000
Cost
At 1 January 2019 1,137 527 1,508 3,172
Transition to IFRS 16 - - (360) (360)
Additions 10 28 310 348
Disposals - (4) - (4)
At 31 December 2019 1,147 551 1,458 3,156
Depreciation
At 1 January 2019 99 127 917 1,143
Transition to IFRS 16 - - (248) (248)
Charge for the year 114 131 319 564
Eliminated on disposals - (1) - (1)
At 31 December 2019 213 257 988 1,458
Net book value

At 31 December 2019 934 294 470 1,698
At 31 December 2018 1,038 400 591 2,029
No impairment indicators were identified during year.
71
17. Trade and other receivables

2020 2019
£'000 £'000
Current:
Other debtors 1,108 1,201
Amounts owed by HMRC 2,192 1,929
Trade debtors 172 444
Accrued income 5,603 5,243
Prepayments 2,082 1,713
11,157 10,530
Included within other debtors is a balance of cash prefunded on the wrap platform as required by our client terms and conditions.
This fluctuates due to timing. The total loss allowance provided for trade and other receivables was £188,768 (2019: £230,410).

18. Investments in securities

2020 2019
£'000 £'000
Valuation
At 1 January 107 84
Additions in year 94 39
Disposals in year - (23)
Unrealised gain - 7
At 31 December 201 107
19. Cash and cash equivalents

2020 2019
£'000 £'000
Cash at bank and in hand 17,546 18,525
The company has a £5,000,000 uncommitted overdraft facility with The Royal Bank of Scotland International Limited. Interest is
charged on this facility at 3 per cent plus base rate up to an overdrawn amount of £5,000,000 and 5 per cent plus base rate on
any amount over £5,000,000. The overdraft is secured by a fixed and floating charge over all the company’s assets. The overdraft
was undrawn as at 31 December 2020.

72
20. Trade and other payables

2020 2019
£'000 £'000
Current:
Trade creditors 1,912 1,423
Social security and other taxes 488 372
Other creditors 1,499 2,206
Amounts owed to HMRC 628 118
Accruals 3,816 5,487
8,343 9,606
21. Lease liabilities

2020 2019
£'000 £'000
Non-current:
Lease liabilities 3,243 3,737
Current:
Lease liabilities 494 475
1 year or less 1 - 2 years 2-5 years > 5 years Total

£'000 £'000 £'000 £'000 £'000
2020
Lease liabilities 494 513 1,666 1,064 3,737
2019
Lease liabilities, which includes items previously classified as finance lease liabilities, increased by £4,513k as a result of adopting
IFRS 16 Leases effective 1 January 2019.
73
22. Called up share capital

2020 2019
£'000 £'000
Fully paid ordinary shares of £0.001 each: 76,473,360 (2019: 76,473,360) 76 76

Employee Benefit trusts hold a total of 674,704 shares (2019: 611,255).
23. Reserves
Capital redemption reserve
This is a non-distributable reserve into which amounts are transferred following the redemption or purchase of the company’s
own shares.
Share-based payment reserve

The fair value of services received in exchange for the grant of options and other share awards is recognised over their vesting
period. Upon conversion the fair value of services received is transferred to retained earnings.
Treasury shares
Shares of Nucleus Financial Group plc that are held in the Employee benefits trust and SIP trust for the purposes of satisfying
awards under share-based incentive and all employee share ownership plans.
Retained earnings
Retained earnings includes all current and prior year retained profits and losses.
External capital requirements

The group is required to maintain and have available to it a sufficient level of capital as determined by the requirements
applicable to an IFPRU 125k limited licence investment firm and a non-insured Sipp operator. The group complied with these
requirements throughout the reporting period.
74
24. Financial instruments

The principal financial instruments, from which financial instrument risk arises, are as follows:
• Trade and other receivables

• Cash and cash equivalents
• Investments in securities
• Trade and other payables
As explained in note 1, financial assets and liabilities have been classified into categories that determine their basis of
measurement and, for items measured at fair value, whether changes in fair value are recognised in the statement of
comprehensive income. In adopting IFRS 9 all previously classified loans and receivables were re-classified as financial assets
at amortised cost, with no change to measurement, and all financial assets previously classified at fair value through other
comprehensive income were reclassified as financial assets at fair value through profit and loss, as this is the residual category
under IFRS 9. The following tables show the carrying values of assets and liabilities for each of these categories.
Financial assets at
fair value through Financial liabilities Financial assets at
profit and loss at amortised cost amortised cost Total
£'000 £'000 £'000 £'000
2020
Financial assets
Investments in securities 201 - - 201
Cash and cash equivalents - - 17,546 17,546
Trade and other receivables - - 9,075 9,075
Total financial assets 201 - 26,621 26,822
Non-financial assets 9,539
Total assets 36,361
Financial liabilities
Lease liabilities - 3,737 - 3,737
Trade and other payables - 7,855 - 7,855
Total financial liabilities - 11,592 - 11,592
Non-financial liabilities 2,038
Total liabilities 13,630
75
24. Financial instruments continued

Financial assets at
fair value through Financial liabilities Financial assets at
profit and loss at amortised cost amortised cost Total*
£'000 £'000 £'000 £'000
2019
Financial assets
Cash and cash equivalents - - 18,525 18,525
Trade and other receivables* - - 8,817 8,817
Total financial assets 107 - 27,342 27,449
Total assets 34,696
Lease liabilities - 4,212 - 4,212
Trade and other payables* - 9,234 - 9,234
Total financial liabilities - 13,446 - 13,446
*Prepayments of £1,713k and social security and other taxes of £372k are not considered to be financial assets and liabilities per IAS 32 but were previously disclosed
as such, and have been re-presented as non-financial assets and non-financial liabilities.
76

Financial instruments measured at fair value – fair value hierarchy
The table below classifies financial assets that are categorised on the statement of financial position at fair value in a hierarchy
that is based on significance of the inputs used in making the measurements. The levels of hierarchy are disclosed in note 1.
Investments in securities are held for the benefit of platform functionality and are reported on a separate line in the statement
of financial position. The assets are held at fair value with any gains or losses being taken to the statement of comprehensive
income.
The following tables show the group's financial assets measured at fair value through profit and loss, classed according to the
level of the fair value hierarchy:
Level 1 Level 2 Level 3 Total

£'000 £'000 £'000 £'000
2020
Level 1 Level 2 Level 3 Total

£'000 £'000 £'000 £'000
2019
Credit risk
The group holds the surplus of corporate cash balances over and above its working capital requirements on deposit with its
corporate banking services providers, The Royal Bank of Scotland plc, Bank of Scotland plc, Investec Bank plc and Santander
Financial Services plc. The group is therefore exposed to counterparty credit risk and a failure of any of these banks would
impact the group’s resources and its ability to meet its solvency and liquidity requirements. Credit risk is managed within the risk
appetites set by the board on an annual basis.
The supply of wrap platform services to clients results in trade receivables which management considers to be of low risk. Other
receivables are likewise considered to be low risk. Management do not consider that there is any concentration of risk within
either trade or other receivables.
Included in other receivables is a balance of cash prefunded on the wrap platform. Where these amounts are not received within
normal operational timeframes, our experience is that the risk of non-recovery increases, and we provide to our expectation of
most likely outcome. The provision as at 31 December 2020 was £188,768 (2019: £230,410).
Liquidity risk
The group’s liquidity position is subject to a range of factors that may generate liquidity strain in the short or medium term.
The group manages its liquidity risk through an ongoing evaluation of its working capital requirements against available cash
balances and credit facilities. The group maintains actual liquid resources above the minimum cash buffers prescribed in the
liquidity management policy for foreseeable funding requirements (including under stressed conditions) and reserve liquidity for
unforeseen events, unless a different amount is agreed by the board. Detailed risk appetite limits are prescribed in the liquidity
management framework and reviewed annually by the board.
Solvency risk
The group’s solvency position is subject to a range of factors that may influence it in the short or medium term. The group
maintains risk appetite limits for solvency risk and capital and has in place a capital management policy to manage against
those. This is managed through an ongoing capital evaluation programme and is reported regularly to the board.
Exposure to securities markets

The group’s income is derived from a tiered basis point fee that is applied to client assets under administration. This income is
exposed to the value of the underlying investment assets which can be affected by market movements. Although some of this
risk is mitigated within components of the cost base, the group is ultimately exposed to volatility in its financial results because of
market movements beyond its control.
77

Operational risk
The nature of the activities performed by the group is such that a degree of operational risk is unavoidable in relation to losses
that could be incurred by the group or by others because of errors or omissions for which the group is ultimately liable.
Particular operational risks for the group are considered to be:
• People risks – we consider that the two most significant risks are the risk of failure to attract and retain core skills and
knowledge in the company, and people-related errors in core processes;
• Operational control failures in core processes – there is always a risk of failure in core processes, either directly by the
company and/or by third parties which would result in operational losses, poor client outcomes and reputational damage; and
• Systems-related risks including cyber-attacks, data leakage and business continuity events.
During 2020, the business was proven to be operationally resilient with very limited impact to service as a result of the move
to working arrangements in response to Covid-19. The significant majority of our staff were able to work from home whilst
maintaining business operations and delivering the group’s change programme. However, as noted across the industry, the
group has monitored and mitigated increased potential risks from unsophisticated cyber-attack attempts, attempted financial
crime and failure to manage core business processes.
The following tables show an analysis of the financial assets and financial liabilities by remaining expected maturities.
2020
Financial assets < 3 months 3-12 months 1-5 years >5 years Total
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 17,546 - - - 17,546
Investments - 201 - - 201
Trade and other receivables 8,630 279 166 - 9,075
26,176 480 166 - 26,822
2019
Financial assets < 3 months 3-12 months 1-5 years >5 years Total*
£'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 18,525 - - - 18,525
Investments - 107 - - 107
Trade and other receivables* 8,372 445 - - 8,817
26,897 552 - - 27,449
78

2020
Financial liabilities < 3 months 3-12 months 1-5 years >5 years Total
£'000 £'000 £'000 £'000 £'000
Trade and other payables 7,658 197 - - 7,855
7,781 566 2,179 1,064 11,590
2019
Financial liabilities < 3 months 3-12 months 1-5 years >5 years Total*
£'000 £'000 £'000 £'000 £'000
Trade and other payables* 9,234 - - - 9,234
9,353 356 2,096 1,641 13,446
*Prepayments of £1,713k and social security and other taxes of £372k are not considered to be financial assets and liabilities per IAS 32 but were previously disclosed
as such, with maturities of < 3 months, and have been re-presented as non-financial assets and non-financial liabilities.
25. Deferred tax

The deferred tax asset is made up of the following balances:

Accelerated capital Short term timing Losses and other

allowances differences deductions Total*
£'000 £'000 £'000 £'000
At 1 January 2019 8 17 138 163
(Charge)/credit to statement of
comprehensive income (1) 81 (136) (56)
At 31 December 2019 7 98 2 107

comprehensive income (1) 125 (2) 122
At 31 December 2020 6 223 - 229
79
25. Deferred tax continued

The deferred tax liability is made up of the following balances:

allowances differences deductions Total
£'000 £'000 £'000 £'000
At 1 January 2019 (41) - - (41)
Credit to statement of
comprehensive income 19 - - 19
At 31 December 2019 (22) - - (22)

Charge to statement of
comprehensive income (104) - - (104)
At 31 December 2020 (126) - - (126)
26. Share-based payments

Total cost of share-based payments:
2020 2019
£'000 £'000
Long term incentive plan 654 290
Employers NIC on long term incentive plan 90 34
Share incentive plan 55 25
799 349

National insurance contribution (NIC) obligations arising from HMRC unapproved equity-settled schemes are treated as if they are
cash-settled, regardless of the equity determination of the scheme itself.
80
26. Share-based payments continued

Long Term Incentive Plan (LTIP)
The LTIP comprises conditional awards of nil cost options over ordinary shares to selected members of the senior management
team (including the executive directors) and certain other employees, which vest on the achievement of specified performance
targets and continuous employment over a certain period of time (the vesting period), or discontinuance of the plan. The
performance conditions and details of movement in the LTIP are set out in the remuneration and HR committee report.
The company granted long-term incentive awards in the form of nil-cost options over its ordinary shares to the executive directors
and other persons discharging managerial responsibility under its long-term incentive plan. The vesting of each of the awards is
subject to the satisfaction of performance conditions that have been set by the remuneration and HR committee. These conditions,
which will be assessed over prescribed three-year periods, relate to the achievement of specific targets in relation to earnings
per share, net inflow of assets under administration and total shareholder return. Vesting will also normally be dependent on the
continued employment of the participant within the group.
LTIP LTIP 2020 LTIP 2019 LTIP 2018

At 1 January 2019 - - 944,747
Shares awarded during the year - 827,090 -
Lapsed during the year - (23,674) (30,211)
At 31 December 2019 - 803,416 914,536
Shares awarded during the year 1,530,147 - -

Lapsed during the year (14,248) (54,564) (56,481)
At 31 December 2020 1,515,899 748,852 858,055

LTIP 2020 LTIP 2020 LTIP 2019 LTIP 2019 LTIP 2018 LTIP 2018
TSR EPS TSR EPS TSR EPS
condition conditions condition conditions condition conditions
Option pricing
model Monte Carlo Black Scholes Monte Carlo Black Scholes Monte Carlo Black Scholes
Date granted 6/10/2020 6/10/2020 03/04/2019 03/04/2019 26/07/2018 26/07/2018
Share price on
grant date (p)* 128p 128p 176p 176p 183p 183p
Vesting period
(years) 2.6 2.6 3 3 3 3
Exercise price 0p 0p 0p 0p 0p 0p
Expected volatility 44% 44% 40% 40% 34% 34%
Risk-free rate 0.10% 0.10% 0.72% 0.72% 0.84% 0.84%
Dividend yield nil nil nil nil nil nil
Fair value per
option at grant
date 70p 128p 89p 176p 85p 183p
Remaining vesting
period (years) 2.4 2.4 1.3 1.3 0.6 0.6
* Note that LTIP 2020 options were granted on a 30 day moving average share price. The share price on 6/10/2020 (target setting date) was 127.50p.
81
26. Share-based payments continued

Expected volatility was determined by comparing Nucleus to other companies that provide software services to the financial
services sector as these were deemed to be the closest comparative with a long enough share history to give an indicative
relative valuation and volatility measure. In estimating a volatility range for the company we have excluded companies that have
an enterprise value greater than £500m, as we consider that they would not typically be reflective of the risks, size and growth
profile of a company such as Nucleus. Expected volatility of the companies was determined by reference to their historical volatility
over a period consistent with the vesting period of the options.
Share incentive plan (SIP)

The SIP is an all-employee share ownership plan which has been designed to meet the requirements of Schedule 2 to the Income
Tax (Earnings and Pensions) Act 2003 so that Ordinary Shares can be provided to UK employees under its terms in a tax-efficient
manner. During the year employees were offered the opportunity to buy Ordinary Shares with a value of up to the lower of
£1,800 and 10 per cent of the employee’s pre-tax salary, and the company agreed to match the number of shares so purchased.
These matching shares are held on the employees’ behalf in the SIP trust, subject to a holding period of three years, and may be
forfeited if the participant ceases employment within that period.
SIP 2020 2019

Brought forward at the beginning of the year 74,267 21,444
Matching shares awarded 71,503 53,911
Matching shares forfeited (3,734) (1,088)
Matching shares released (7,332) -
Outstanding matching shares at the end of the year 134,704 74,267
27. Provisions
2020 2019
£'000 £'000
Client compensation 266 536
Outsourced service - 158
Dilapidations 99 65
Share incentive plans 124 34
Business combination 470 -
959 793
Analysed as follows:
Current 736 694
Non-current 223 99
959 793
82
27. Provisions continued

Share
incentive Client Outsourced Business
plans compensation service Dilapidations combination Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2019 - 429 158 32 - 619
Provided during year 34 389 - 33 - 456

Utilised during year - (122) - - - (122)
Unused amounts reversed
during year - (160) - - - (160)
At 31 December 2019 34 536 158 65 - 793
Provided during year 90 155 - 34 - 279

Provided upon acquisition - - - - 470 470
Utilised during year - (257) - - - (257)
Unused amounts reversed
during year - (168) - - - (168)
Credit to statement of
comprehensive income - - (158) - - (158)
At 31 December 2020 124 266 - 99 470 959
Client compensation
The group remediates customers affected by errors on the platform and calculates any amounts due in line with guidance given
by the Financial Ombudsman Service in respect of the type of customer loss, distress and inconvenience for which customers
should be compensated. Where actual trading losses are suffered by customers, these are calculated in accordance with Mifid II
best execution rules to ensure customers are restored to the position they would have been in had the error or omission not been
made. Amounts are provided and utilised against the administrative expenses line in the statement of comprehensive income
and the majority of the outstanding issues are expected to be resolved in the first half of 2021.
Outsourced service
The commercial agreement with its outsourced BPO service provider terminated on 11 December 2020, Under that agreement
should any key performance criteria not have been met, then the group was entitled to receive a discount on the wrap
administration fees charged. Where these were agreed, they were deducted from the invoiced fee and the net expense was
charged through the statement of comprehensive income. Where these were uncertain or in dispute with the service provider,
a provision was booked in recognition of the uncertainty regarding the outcome. Now that the outsourcing service has been
brought in-house and there are no related outstanding claims or disputes the outsourced service provision has been fully
reversed.
Dilapidations
The dilapidations provision relates to the group’s office premises at Greenside, Edinburgh. This is calculated using the Building
Cost Information Service survey (part of the Royal Institution of Chartered Surveyors) of average settlement figures for offices,
adjusted for inflation, and the square footage of the company’s leasehold premises. The provision has been classified as non-
current due to the likelihood of its utilisation at the end of the lease in 2027.
83

Share incentive plans
Provisions for share incentive plans relate to the LTIP which is a HMRC unapproved equity-settled scheme. The company is liable
to pay employers’ NIC upon exercise of the options. The provision is calculated using the applicable employers’ NIC rate applied
to the number of share awards expected to vest, valued at the share price at the reporting date. The provision is recognised over
the vesting period of the shares awarded.
Business combination
As part of the agreement to acquire OpenWealth, Nucleus is required to pay additional consideration in relation to certain
contracts. The final amount due will be determined on actual costs incurred by OpenWealth. The fair value of the consideration as
at 31 December 2020 has been based on the value of the costs expected to be incurred.
28. Reconciliation of profit before income tax to cash generated from operations
2020 2019
£'000 £'000
Profit before income tax 4,030 7,002
Depreciation 1,021 1,102
Loss on disposal of fixed assets - 3
Unrealised gain on investments - (7)
Amortisation 22 -
Share based payments charge 709 315
(Decrease)/increase in bad debt provision (42) 59
Increase in trade and other receivables (548) (1,166)
(Increase)/decrease in operational platform funding (37) 1,187
Decrease in trade and other payables (1,263) (1,987)
(Decrease)/increase in other provisions (289) 174
Interest paid 168 182
Interest received (40) (80)
Net exchange differences 10 6
Cash inflows from operations 3,741 6,790

Share-based payment charge exclude charge for employers NIC included in other provisions.
Operational platform prefunding includes prefunding of client pension tax relief and temporary funding required under the client
money and client assets rules.
84
29. Reconciliation of liabilities arising from financing activities

At 1 January 2019 Non-cash changes Cash flows At 31 December 2019

£'000 £'000 £'000 £'000
Lease liabilities 4,606 - (394) 4,212

At 1 January 2020 Non-cash changes Cash flows At 31 December 2020
£'000 £'000 £'000 £'000
Lease liabilities 4,212 - (475) 3,737
30. Employee share ownership trust

The two share ownership trusts that operate on behalf of the company and the employees are the NFG Limited Employee Benefit
Trust 2010 which incurred a loss for the year of £3,601 (2019 - £3,385) and the Nucleus Financial Group plc Share Incentive Plan
whose costs are borne by the group.
31. Pension commitments

The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the
group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund
and amounted to £1,082,533 (2019: £997,401). Contributions totalling £107,317 (2019: £90,009) were payable to the fund at the
balance sheet date.
32. Ultimate controlling party

In the opinion of the directors there is no ultimate controlling party.
Sanlam UK Limited (Sanlam), a company incorporated in England and Wales, is a majority shareholder of the company. The
company has entered into a Relationship Agreement with Sanlam and Shore Capital and Corporate Limited which governs
the relationship between Sanlam and the company, to ensure that the company is able to carry on its business independently
from Sanlam and in compliance with all applicable laws and regulations (including, the AIM Rules). Sanlam has agreed that all
transactions and relationships between the Sanlam Group and the company shall be on an arms’ length basis and on normal
commercial terms.
33. Related party transactions

Entities with significant influence over the company
Transactions with Sanlam were as follows:
2020 2019
Sanlam £'000 £'000
Amounts owed to Sanlam in respect of board fees by NFG 44 84
Amounts owed to Sanlam in respect of fees for the Onshore Bond by NFS 40 79
Amounts charged by Sanlam to NFG in respect of board fees 89 -
Amounts charged by Sanlam to NFS in respect of the Onshore Bond 485 459
Amounts owed to Sanlam by NFS in respect of tax collected from the Onshore Bond 14 23
85
33. Related party transactions continued

Subsidiaries
NFG owns 100 per cent of the share capital of NFS, NIFAS and IMX. There were no transactions with IMX and NIFAS. The
transactions with NFS are as follows:
2020 2019
NFS £'000 £'000
Amounts owed to NFG by NFS 1,828 1,760
Other related parties

There were no transactions during the period or outstanding balances due to other related parties at the period end. (2019 £nil)
Key management personnel

Key management personnel are considered to be members of the executive committee and remuneration for the year is as
follows:
2020 2019
£'000 £'000
Short-term employee benefits 1,859 1,736
Post-employment benefits 51 61
Share-based payments 465 229
2,375 2,026

Post-employment benefits relate to defined contribution pension scheme charges.
86
34. Events after the reporting period

On 9 February 2021, the boards of Nucleus and James Hay Holdings announced that they had agreed the terms of a
recommended all cash offer to be made by James Hay Holdings, pursuant to which James Hay Holdings is to acquire the entire
issued and to be issued share capital of Nucleus (the “Acquisition”). The Acquisition is intended to be effected by way of a court-
sanctioned scheme of arrangement between Nucleus and the Nucleus shareholders under Part 26 of the Companies Act (the
“Scheme”).
Features and potential implications of the recommended offer if approved are:
The price offered by James Hay Holdings for the Acquisition of 188 pence per Nucleus share equates to total consideration for the
Acquisition of approximately £144.621 million.
The Scheme requires the approval of a majority in number of those Scheme shareholders who are present and vote, either
in person or by proxy, and who represent not less than 75 per cent, in nominal value of the Scheme shares voted by such
Scheme shareholders at the Nucleus court meeting (expected to be held on 30 March 2021).
Implementation of the Scheme will also require the passing of a special resolution, which requires the approval of Nucleus
shareholders representing at least 75 per cent of the votes cast, either in person or by proxy, at the Nucleus general meeting, which
will be held immediately after the Nucleus court meeting.
In total, James Hay Holdings has received irrevocable undertakings to vote, or procure the voting, in favour of the Scheme at the
Nucleus court meeting and the special resolution at the Nucleus general meeting (or in the event that the Scheme is implemented by
way of a takeover offer as defined in Chapter 3 of Part 28 of the Companies Act (the “Offer”), to accept or procure acceptance of the
Offer) from Nucleus shareholders holding in aggregate 42,732,982 Nucleus shares (representing approximately 55.88 per cent of
the existing issued share capital of Nucleus as at 4 March 2021).
The Acquisition is subject to receipt of consent from the FCA.
The current non-executive directors of Nucleus will resign from Nucleus on or after the effective date of the Scheme.
The admission of Nucleus shares to trading on AIM will be cancelled as of or shortly following the effective date of the Scheme.
Outstanding unvested awards granted under the LTIP will vest and become exercisable to the extent determined by the Nucleus
Remuneration and HR Committee.
The aggregate fees and expenses expected to be incurred by Nucleus in connection with the Acquisition are estimated to amount
to £2,816,392, excluding applicable VAT and other taxes.
This aggregate number consists of the following categories:
£
Financial and corporate broking advice 2,386,242¹
Legal advice 370,000²
Accounting advice Nil
Public relations advice 15,000
Other professional services Nil
Other costs and expenses 45,150
Total (excluding VAT) 2,816,392
Total³ estimated cost
to company 3,379,670
¹ The total amount payable in respect of the aggregate fees and expenses for these services depends on whether the Acquisition becomes effective.
² This total is based on estimates and does not include disbursements.
³ Nucleus is subject to a partial VAT exemption, as such limited VAT is expected to be reclaimed by the group for these costs
The Acquisition is considered to be a non adjusting post balance sheet event.

There were no other subsequent events that required adjustment to or disclosure in the financial statements for the period from 31
December 2020 to the date upon which the financial statements were available to be issued.
87
Company statement of financial position
Note 31 December 31 December

2020 2019
£'000 £'000
Assets
Non-current assets
Intangible assets 5 1,955 -
Right of use lease assets 6 3,026 3,463
Property, plant and equipment 7 834 934
Investments in subsidiary companies 8 7,645 7,645
13,689 12,149
Current assets
Trade and other receivables 9 3,179 3,174
Cash and cash equivalents 10 2,025 1,007
5,204 4,181
Total assets 18,893 16,330
Equity
Shareholders' equity
Called up share capital 18 76 76
Capital redemption reserve 18 53 53
Share-based payment reserve 18 1,174 465
Treasury shares 18 (223) (120)
Retained earnings 18 9,585 8,632
Total equity 10,665 9,106
Liabilities
Non-current liabilities
Lease liabilities 12 3,243 3,737
3,466 3,836
Current liabilities
Lease liabilities 12 494 475
Trade and other payables 11 3,581 2,883
Tax payable 217 30
Provisions 13 470 -
4,762 3,388
Total liabilities 8,228 7,224
Total equity and liabilities 18,893 16,330
In accordance with section 408 of the Companies Act 2006, the company is exempt from the requirement to present its
own income statement and a statement of comprehensive income. The company’s profit for the year was £1,713,440 (2019:
£5,094,729). Included in this amount is dividends received of £1,000,000 (2019: £4,718,988), which are recognised when the right
to receive payment is established. The company recognised no other income or expenses in either the current or prior year, other
than the profit for each year.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 22 March 2021.
S J Geard
Director
88
Company statement of changes in equity
Capital Share-based
Called up Retained Treasury redemption payment
share capital earnings shares reserve reserve Total equity
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at
1 January 2020 76 8,632 (120) 53 465 9,106
Changes in equity
Other movements - - - - - -
Dividend paid - (760) - - - (760)
Purchase of own
shares - - (103) - - (103)
Share based
payments charge
(excl NIC) - - - - 709 709
Balance at
31 December 2020 76 9,585 (223) 53 1,174 10,665
Capital Share-based
Called up Retained Treasury redemption payment
share capital earnings shares reserve reserve Total equity
Note £'000 £'000 £'000 £'000 £'000 £'000
Balance at
1 January 2019 76 7,481 (29) 53 150 7,731
IFRS 16 conversion - (71) - - - (71)
Changes in equity
Dividend paid - (3,873) - - - (3,873)
Purchase of own
shares - - (91) - - (91)
Share based
payments charge
(excl NIC) - - - - 315 315
Balance at
31 December 2019 76 8,632 (120) 53 465 9,106

89
Company statement of cash flows
2020 2019
Note £'000 £'000
Cash flows from operating activities
Cash inflows/(outflows) from operations 16 2,342 (1,014)
Income tax paid (30) (1)
Net cash inflows/(outflows) from operations 2,312 (1,015)
Cash flows from investing activities

Business combination payment 4 (1,500) -
Purchase of tangible fixed assets 7 (15) (10)
Dividend received 1,729 4,719
Net cash inflow from investing activities 214 4,709
Cash flows from financing activities

Interest paid (168) (180)
Dividend paid (760) (3,873)
Purchase of Treasury shares (103) (91)
Lease payments - principal 12 (475) (301)
Net cash outflows from financing activities (1,506) (4,445)
Increase/(decrease) in cash and cash equivalents 1,020 (751)
Cash and cash equivalents at beginning of year 1,007 1,758
Effects of exchange rate changes (2) -
Cash and cash equivalents at end of year 2,025 1,007

90
Notes to the company financial statements
1. Accounting policies
Nucleus Financial Group plc (the company) is a public limited company incorporated in the United Kingdom and registered in
England and Wales.
In accordance with Section 408 of the Companies Act 2006, the company is exempt from the requirement to produce its own
income statement and statement of comprehensive income.
The significant accounting policies applied in the preparation of these company financial statements are the same as those set
out in note 1 to the consolidated financial statements with the addition of the following:
Investments in subsidiaries
Investments in subsidiaries are valued at cost less any provision for impairment. At each reporting date, the directors assess
whether there is any indication that an asset may be impaired. If any such indication exists, the directors will estimate the
recoverable amount of the asset. There was no impairment during the year.
2. Critical accounting judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements applied
in the preparation of these company financial statements are the same as those set out in note 2 to the consolidated financial
statements.
3. Staff costs
Staff costs paid by the company and the number of employees are detailed in note 6 to the consolidated financial statements. The
company recharges an element of this cost to NFS.
The company’s pension commitments are disclosed in note 31 to the consolidated financial statements.
Directors’ remuneration and compensation of key management personnel is disclosed in notes 7 and 33 to the consolidated
financial statements.
91
4. Business combination
On 11 December 2020 Nucleus Financial Group plc acquired the UK business and assets of Genpact Wealth Management UK
Limited (which operates under the trading name OpenWealth) as they pertain to Nucleus. In November 2018 Nucleus unbundled
its technology arrangements from OpenWealth, contracting directly with Bravura Solutions (UK) Ltd.
The board of Nucleus believes that the acquisition of the assets that pertain to Nucleus will allow the group to:
• further accelerate its product development and automation programme,

• provide scope to enhance the level and efficiency of its offline service,
• create new growth opportunities for its people, and
• accelerate the expansion of its operating margin as it grows AUA.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration £’000

Cash paid 1,500
Deferred consideration 88
Contingent consideration 382
Total purchase consideration 1,970
Nucleus is required to pay OpenWealth additional consideration in relation to certain contracts throughout 2021. The final amount
due will be determined on actual costs incurred by OpenWealth. The fair value of the consideration as at 31 December 2020 has
been based on the value of the costs expected to be incurred.
The assets and liabilities recognised as a result of the acquisition are as follow:
£’000
Property, plant and equipment 15
Goodwill 1,955
Net assets acquired 1,970
The goodwill is attributable to the skilled workforce and acquired wrap administration back offices processes, and the expected
synergies from combining the operations of Nucleus and OpenWealth. None of the goodwill recognised is expected to be
deductible for tax purposes.
92
5. Intangible Assets
Goodwill Total
Cost £'000 £'000
At 1 January 2020 - -
Additions 1,955 1,955
Write-offs - -
At 31 December 2020 1,955 1,955
Amortisation
Charge for the year - -
Impairments - -
At 31 December 2020 - -
Net book value

At 31 December 2020 1,955 1,955
93
6. Right of use lease assets

Right of use asset
Greenside
Edinburgh Total
£'000 £'000
Cost
At 1 January 2020 3,901 3,901
Additions - -
Disposals - -
At 31 December 2020 3,901 3,901
Depreciation
At 1 January 2020 438 438
Charge for the year 437 437
Eliminated on disposals - -
At 31 December 2020 875 875
Net book value

At 31 December 2020 3,026 3,026
At 31 December 2019 3,463 3,463
Right of use asset

Greenside
Edinburgh Total
£'000 £'000
Cost
Transition to IFRS 16 3,901 3,901
Additions - -
Disposals - -
At 31 December 2019 3,901 3,901
Depreciation
Transition to IFRS 16 - -
Charge for the year 438 438
Eliminated on disposals - -
At 31 December 2019 438 438
Net book value

At 31 December 2019 3,463 3,463
94
7. Property, plant and equipment

Short-term
£'000 £'000 £'000 £'000
Cost
At 1 January 2020 1,147 - - 1,147
Additions - 8 7 15
Disposals - - - -
At 31 December 2020 1,147 8 7 1,162
Depreciation
At 1 January 2020 213 - - 213
Charge for the year 115 - - 115
At 31 December 2020 328 - - 328
Net book value

At 31 December 2020 819 8 7 834
At 31 December 2019 934 - - 934
Short-term
£'000 £'000 £'000 £'000
Cost
At 1 January 2019 1,137 - - 1,137
Transition to IFRS 16 - - - -
Additions 10 - - 10
Disposals - - - -
At 31 December 2019 1,147 - - 1,147
Depreciation
At 1 January 2019 99 - - 99
Transition to IFRS 16 - - - -
Charge for the year 114 - - 114
At 31 December 2019 213 - - 213
Net book value

At 31 December 2019 934 - - 934
At 31 December 2018 1,038 - - 1,038
95
8. Investments in subsidiary companies

2020 2019
Cost £'000 £'000
At 1 January and 31 December 7,645 7,645
Subsidiary undertakings
The following are subsidiary undertakings of the company:
Nucleus Financial Services Limited

Registered office: Elder House, St Georges Business Park, 207 Brooklands Road, Weybridge, Surry, England, KT13 0TS
Class of shares: Ordinary
Holding: 100%
Principal activity: Provision of wrap administration services to selected financial advisers in the United Kingdom.
2020 2019
£'000 £'000
Aggregate capital and reserves 19,587 17,391
Profit for the financial year 3,196 5,502
Nucleus IFA services Limited

Registered office: Greenside, 12 Blenheim Place, Edinburgh, Scotland, EH7 5JH
Holding: 100%
Principal activity: Provision of platform technology, sales, marketing and platform development services to NFS. Trade was
transferred to NFS on 1 April 2017
2020 2019
£'000 £'000
Aggregate capital and reserves 99 726
Profit for the financial year 1 78
Nucleus IMX Limited

Registered office: Elder House, St Georges Business Park, 207 Brooklands Road, Weybridge, Surry, England, KT13 0TS
Holding: 100%
Principal activity: Non-trading subsidiary
2020 2019
£ £
Aggregate capital and reserves 1 1
Profit for the financial year - -
96
9. Trade and other receivables

2020 2019
£'000 £'000
Amounts owed by group undertakings 1,828 2,231
Other debtors 105 57
Prepayments 1,246 886
3,179 3,174
Amounts owed by group undertakings are unsecured, interest free and have agreed repayment terms.
10. Cash and cash equivalents

2020 2019
£'000 £'000
Cash at bank and in hand 2,025 1,007
11. Trade and other payables

2020 2019
£'000 £'000
Trade creditors 441 407
Social security and other taxes 496 371
Other creditors 258 9
Accruals 2,386 2,096
3,581 2,883
97
12. Lease liabilities

2020 2019
£'000 £'000
Non-current:
Lease liabilities 3,243 3,737
Current:
Lease liabilities 494 475
1 year or less 1 - 2 years 2-5 years > 5 years Total

£'000 £'000 £'000 £'000 £'000
2020
2019
13. Provisions
2020 2019
£'000 £'000
Dilapidations 99 65
Share incentive plans 124 34
Business combination 470 -
693 99
Analysed as follows:
Current 470 -
Non-current 223 99
693 99
98

Business Share
combination incentive plans Dilapidations Total
£'000 £'000 £'000 £'000
At 1 January 2019 - - 32 32
Provided during year - 34 33 67

Utilised during year - - - -
At 31 December 2019 - 34 65 99
Provided during year - 90 34 124

Provided during year - business
combination 470 - - 470
Utilised during year - - - -
At 31 December 2020 470 124 99 693
Share incentive plans

Provisions for share incentive plans relate to the LTIP which is a HMRC unapproved equity-settled scheme. The company is liable
to pay employers’ NIC upon exercise of the options. The provision is calculated using the applicable employers’ NIC rate applied
to the number of share awards expected to vest, valued at the share price at the reporting date. The provision is recognised over
the vesting period of the shares awarded.
Dilapidations
During the year, the company utilised the remainder of the dilapidations provision relating to the previous leasehold premises
following completion of contractual restoration obligations. The current balance provides for dilapidations relating to the
company’s new leasehold office premises at Greenside, Edinburgh. This is calculated using the Building Cost Information Service
survey (part of the Royal Institution of Chartered Surveyors) of average settlement figures for offices, adjusted for inflation, and the
square footage of the company’s leasehold premises. The provision has been classified as non-current due to the likelihood of its
utilisation at the end of the lease in 2027.
Business combination
As part of the agreement to acquire OpenWealth, Nucleus is required to pay additional consideration in relation to certain
contracts. The final amount due will be determined on actual costs incurred by OpenWealth. The fair value of the consideration as
at 31 December 2020 has been based on the value of the costs expected to be incurred.
99
14. Deferred tax


allowances differences deductions Total
£'000 £'000 £'000 £'000
At 1 January 2019 8 17 138 163
comprehensive income (1) 81 (136) (56)
At 31 December 2019 7 98 2 107

comprehensive income (1) 125 (2) 122
At 31 December 2020 6 223 - 229
The total potential deferred tax asset arising in respect of unutilised tax losses and timing differences at 31 December 2020 is £nil
(2019 £562,305).
15. Financial instruments

Financial liabilities Financial assets at
at amortised cost amortised cost Total
£'000 £'000 £'000
2020
Financial assets
Cash and cash equivalents - 2,025 2,025
Trade and other receivables - 1,933 1,933
Total financial assets - 3,958 3,958
Total assets 18,893
Finance lease obligations 3,737 - 3,737
Trade and other payables 3,085 - 3,085
Total financial liabilities 6,822 - 6,822
100

Financial liabilities Financial assets at
at amortised cost amortised cost Total*
£'000 £'000 £'000
2019
Financial assets
Cash and cash equivalents - 1,007 1,007
Trade and other receivables* - 2,288 2,288
Total financial assets - 3,295 3,295
Total assets 15,444
Finance lease obligations 4,212 - 4,212
Trade and other payables* 2,512 - 2,512
Total financial liabilities 6,724 - 6,724
Non-financial liabilities 500
*Prepayments of £886k and social security and other taxes of £371k are not considered to be financial assets and liabilities per IAS 32 but were previously disclosed
as such, and have been re-presented as non-financial assets and non-financial liabilities.
101

2020
Financial assets < 3 months 3-12 months 1-5 years >5 years Total
£'000 £'000 £'000 £'000 £'000
Cash and cash
equivalents 2,025 - - - 2,025
Trade and other
receivables 1,852 81 - - 1,933
3,877 81 - - 3,958
2019
Financial assets < 3 months 3-12 months 1-5 years >5 years Total*
£'000 £'000 £'000 £'000 £'000
Cash and cash
equivalents 1,007 - - - 1,007
Trade and other
receivables* 2,287 1 - - 2,288
3,294 1 - - 3,295
2020
Financial liabilities < 3 months 3-12 months 1-5 years >5 years Total
£'000 £'000 £'000 £'000 £'000
Trade and other
payables 2,888 197 - - 3,085
3,011 566 2,179 1,064 6,820
2019
Financial liabilities < 3 months 3-12 months 1-5 years >5 years Total*
£'000 £'000 £'000 £'000 £'000
Trade and other
payables* 2,512 - - - 2,512
Finance lease
obligations 119 356 2,096 1,641 4,212
2,631 356 2,096 1,641 6,724
*Prepayments of £886k and social security and other taxes of £371k are not considered to be financial assets and liabilities per IAS 32 but were previously disclosed as
such, as maturities of < 3 months, and have been re-presented as non-financial assets and non-financial liabilities.
102
16. Reconciliation of profit before tax to cash generated from operations

2020 2019
£'000 £'000
Profit before income tax 1,808 5,182
Depreciation 552 552
Share based payments charge (excl NIC) 709 315
Increase in trade and other receivables (5) (1,792)
Increase/(decrease) in trade and other payables 698 (799)
Increase in other provisions 139 67
Net exchange differences 2 -
Interest paid 168 180
Dividend received (1,729) (4,719)
Cash inflows/(outflows) from operations 2,342 (1,014)
17. Dividends
Details of dividends paid are disclosed in note 11 to the consolidated financial statements.
18. Called up share capital

Details of the share capital of the company are disclosed in note 22 to the consolidated financial statements.
19. Share-based payments

For details of the company’s share schemes, including the valuation models used, refer to note 26 in the consolidated financial
statements.
20. Reserves
Details of the company’s reserves are disclosed in note 23 to the consolidated financial statements.
21. Related party transactions

Details of related party transactions are disclosed in note 33 to the consolidated financial statements.
22. Controlling party

Details of the ultimate controlling party are disclosed in note 32 to the consolidated financial statements.
103
Company information
Directors Bankers
T Dunley-Owen The Royal Bank of Scotland plc
D R Ferguson Aldgate Union
S J Geard 7th Floor
M G Hassall 10 Whitechapel High Street
J A Levin London
J C Polin E1 8DX
J A A Samuels
Bank of Scotland plc
A Tagliabue
PO Box 17235
Edinburgh
Company secretary EH11 1YH
M Bruce Lloyds Bank Plc
Threadneedle Street
Registered number Chelmsford Legg St Osc
1 Legg Street
05522098 Chelmsford
CM1 1JS
Registered office The Royal Bank of Scotland International Limited
Elder House St Georges Business Park Royal Bank Place
207 Brooklands Road 1 Glategny Esplanade
Weybridge St Peter Port
Surrey Guernsey
England GY1 4BQ
KT13 0TS Investec Bank plc
30 Gresham Street
Independent auditors London
EC2V 7QP
PricewaterhouseCoopers LLP
Atria One Santander Financial Services plc
144 Morrison Street Jersey Branch
Edinburgh 19 - 21 Commercial Street
EH3 8EX St Helier
Jersey
JE2 3RU
104
Definitions and glossary of technical terms

The following definitions apply throughout this document:
Industry-specific financial Included within this results announcement are alternative measures that the directors believe
performance measures help to inform the results and financial position of the group
Adjusted Denotes that a standard or defined financial performance measure is adjusted for non-
recurring items, transactions that do not reflect the normal operating activities of the group and
share-based payments
Adjusted EBITDA Adjusted EBITDA excludes non-operating income, AIM admission costs, exceptional items,
share-based payments, loss on disposal of fixed assets and includes ROU asset depreciation
and ROU lease liability interest
Adjusted EBITDA margin Adjusted EBITDA expressed as a percentage of revenue
Adjusted earnings per share Value of adjusted profit after tax divided by weighted average number of shares
(EPS)
Adjusted profit after tax The adjusted profit before tax less the adjusted profit before tax multiplied by the standard rate
of corporation tax in the UK
AUA Assets under administration
Average AUA The average AUA balance for the period is calculated as the average of the end of day AUA
balances during the period
Blended revenue yield (bps) Net revenue is divided by the average assets under administration. For interim periods the net
revenue is annualised using the number of days in the period
Capital adequacy ratio A capital adequacy measure calculated by dividing regulatory capital over risk weighted
exposures
Compound asset growth rate Average growth rate over a period of time expressed as an annualised percentage
EBITDA Earnings Before Interest Tax Depreciation and Amortisation
Gross inflows Value of cash and assets received onto the platform
Industry-specific financial- Alternative performance measures that the directors believe help to inform the results and
performance measures financial position of the group
Net inflows Value of Gross inflows less Outflows
Net Revenue Net revenue comprises revenue earned on the platform less the direct fees that are payable to
product providers of the platform
Outflows Value of cash and assets leaving the platform
ROU asset/liability Right of use asset/liability
105
Glossary
AIM Rules The rules published by London Stock Exchange entitled AIM Rules for Companies
BPO Business process outsourcing. The contracting of the operations and responsibilities of a
specific business process to a third-party service provider.
Customers The customers of Nucleus, whose assets are managed by financial advisers through the
platform
FCA The Financial Conduct Authority
Icaap The internal capital adequacy assessment process
IFPRU The Prudential sourcebook for Investment Firms
IFRS International Financial Reporting Standards as adopted by the United Kingdom and
European Union
IMX IMX is a discretionary investment management solution
MiFID II The EU Markets in Financial Instruments Directive (2014/65/EU)
NFS Nucleus Financial Services Limited
Nucleus or the Group The Company and its subsidiaries
Sanlam Sanlam UK Limited
SM&CR Senior Managers and Certification Regime
106
0131 226 9800 [email protected] @nucleuswrap www.nucleusfinancial.com
Nucleus Financial Group plc is registered in England and Wales with company number 05522098 and has its registered office at Elder House, St Georges Business Park, Brooklands Road, Weybridge, Surrey KT13 0TS.
Please note that telephone calls may be recorded in order to monitor the quality of our customer service and for training purposes.
0415.04
3-2021

LSE NUC.L 2020-Report

Uploaded by

Copyright:

Available Formats

LSE NUC.L 2020-Report

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

LSE NUC.L 2020-Report

Uploaded by

Copyright:

Available Formats

Nucleus Financial Group plc

Annual report and

Registered number 05522098

2020 was by any measure one of the

By far the most disruptive and The company’s response to the

Culture and people Outlook Market commentators Fundscape

Chief executive’s report

Since last year’s report, Covid-19 has had an

Chief executive’s report

We had another strong year on Financial performance Our people

In addition to securing our latest Prior to the announcement of the

Chief executive’s report

Nucleus is an independent Our purpose Accountable

We believe that the Acquisition will Stakeholders Platform users

Our people How did we respond: Suppliers

Shareholders Regulators Community, the environment and

Chief financial officer’s report

In a year that was dominated by the

Financial key performance indicators

Group £'000 £'000 £'000 £'000 £'000

AUA¹ 17,415,185 16,141,279 13,883,713 13,576,703 11,143,757

Gross inflows¹ 1,829,389 1,941,712 2,290,236 2,607,759 1,854,830

Net inflows¹ 722,765 509,444 1,193,502 1,668,237 970,263

Revenue 51,809 51,517 49,405 45,462 37,483

Net revenue¹ 45,974 45,234 43,154 39,361 32,407

Adjusted EBITDA¹ 5,711 7,923 8,304 6,248 5,141

Dividend paid 760 3,873 3,933 4,813 nil

Adjusted EBITDA margin¹ 12.4% 17.5% 19.2% 15.9% 15.8%

Year ended Year ended

Staff costs (16,593) (14,590)

Adjusted EBITDA* 5,711 7,923

Adjusted profit before tax 5,146 7,334

Other non-operating income 13 17

Statutory profit before tax 4,030 7,002

Adjusted profit after tax 4,168 5,941

Chief financial officer’s report

Chief financial officer’s report

Chief financial officer’s report

Cash flow Lease liabilities 3,737 4,212

Chief financial officer’s report

Principal risks and uncertainties

The following principal risks relate to

Additional risks and uncertainties not Culture risk

Principal risks and uncertainties

Business model risks Competition Reliance on key suppliers

Principal risks and uncertainties

Operational and • Operational resilience and Regulatory

- Failure in systems and controls in

Principal risks and uncertainties

New regulation in 2020 Financial and liquidity risks Liquidity

Risk management framework

The board’s objective In assigning risk management Third line of defence

Corporate governance statement

I am pleased to present At Nucleus we believe that our corporate

Jonathan Polin David Ferguson

Angus Samuels (chair) 32 9 5 5 9

Tracy Dunley-Owen 29 9 5 n/a n/a

Margaret Hassall 31 n/a n/a 5 9