Frequently Asked Questions 

As Head of Operations of Nucleus Wealth, I enjoy dealing with client queries and questions on a daily basis. I like to think that all the information we have put together helps people get a really good idea of what we do and how we can help them, but there is always more we can provide.

So we produced a short 10 minute video where I address the most frequently asked questions about investing with Nucleus Wealth, which also serves as an introduction to the fund. The video can be accessed in the player below. Underneath it, you can find the transcribed answer to each question, as well as a video for that individual question. Timestamps are included so you can jump to the section of the video you’re curious about.

Tim Fuller.

0:10 A little bit about Nucleus Wealth and how we invest for clients.

Nucleus Wealth is a Melbourne based investment house that started in 2016. We offer significant points of difference in the way we invest for clients with the aim of providing a transparent and easy to understand investment solution.

Every client of Nucleus Wealth has their own bespoke portfolio of shares, bonds and cash held on a third party platform called Praemium in a separately managed account.

Separately managed accounts have been around for some time, and have grown in popularity in the last 5 years. They offer the investor the benefits of direct share ownership, as dividends, distributions and franking credits are confined to your account, whilst you still have the hands off nature of a professionally managed investment solution.

We chose Praemium because it is fully backed by global and local banks, in JPMorgan, HSBC and ANZ offering the gold standard for client asset protection.

Because you have your own individual portfolio, you can individually tailor the account using 29 different ethical and portfolio tailoring options, and we can offer free investment advice on an appropriate portfolio for your needs.

1:32 What sort of portfolios do you have and what investments do you use?

We have opted to only use what we see as the basic building blocks of a quality diversified portfolio. All you will find in Nucleus Wealth portfolio’s is variants of cash, Australian Federal Government Bonds and companies that sit in the MSCI World index, which are roughly the largest 1600 companies in the world.

We are long only, and consider our portfolio’s to be the ‘Nucleus’ of a clients investments, leaving them, if they wish, time to manage other asset classes that are not in our playground.

We look after both the stock selection and tactical asset allocation, for example holding more cash and bonds in periods of market volatility and all portfolios are reviewed daily.

We have a tactically managed portfolio that serves clients looking to invest between $35 and $200 thousand, called Tactical Foundation which uses cash, bonds, Australian shares and international exchange traded funds and around 35 holdings.

For those looking to invest above $200 thousand, we can offer our flagship portfolio’s called Tactical Growth, Income and Accumulation. These use a diversified blend of direct international shares instead of exchange traded funds, can be blended to provide greater risk tailoring and have between 80 and 100 holdings.

We also offer just our stock selection services in full direct share portfolio’s called Core Australia and Core International, for those seeking to do their own tactical asset allocation.

2:37 What are your fees?

We have targeted an all-in cost to client of around 1% per annum or less, which is charged monthly in arrears on the balance you invest with us.

This is comprised of our investment management fee, which is a flat 0.64% per annum across all portfolios and asset classes. We do this for a number of reasons:

  1. Firstly, it is clear and transparent and we do not charge any performance fees
  2. Secondly, by charging the same across all asset classes, there is no perceived incentive to move from one to the other unless it benefits your portfolio

The remainder is made up of our platform partner’s administration costs, which decreases with the amount invested on the platform, and there is no admin fee charged after $1m. There is also the ability to aggregate multiple accounts as a family group to help take advantage of this tier pricing structure.

Praemium incorporates a daily book building process, which mean that brokerage is minimized through group trading. We can typically transact for a tenth of the cost of traditional brokerage fees and the initial brokerage amount is estimated in the onboarding process.

For personal super account there is an additional trustee fee which is estimated for you during the onboarding process.

4:01 How do I give you money, and how do I get it back?

Adding money is easy. Every account has its own BPAY number, which facilitates high transfer amounts and is a robust and reliable system. This is provided in the Welcome Pack sent shortly after applying.

The platform will wait until you have deposited your initial amount before trading, and transfers usual take about 3 business days to get through to the investment account.

Once up and running you can make deposits of any amount whenever you wish, and the new money will be invested automatically the following market day.

Getting money out is also simple. Just send through an instruction to our central inbox, contact@nucleuswealth.com and we will instruct the payment back to the bank account you provided initially. Any amount is fine and all investments are held in highly liquid markets.

Depending on how much market activity is required, the transfer usually takes between 4 and 6 business days to be returned to your account.

5:06 Can I invest using my personal super account?

We offer all investment portfolios through personal superannuation, which has all the functionality of a regular superfund, but with typically much more transparency and personal tailoring.

Through the online onboarding tool, you can also get a quote on Life and Total and Permanent Disablement insurance which is a stand alone policy that sits alongside the investment and is portable. We do not take commission on the insurance component to help keep it affordable.

Once aboard, we can send you a prefilled form to give to your employer, and the fund can accept additional contributions much like any other fund.

Onboarding your super is easy and paperless, and our platform takes care of the rollover from your previous fund electronically.

5:57 What reports do I receive at the end of the year for tax purposes?

Our platform partner, Praemium, has one of the best reporting systems in the business, so much that it is used by major banks. At the end of the financial year, usually around September, you will be provided with a full, audited tax report that can be easily used to manage your tax affairs.

The typical figures your accountant needs, such as realized capital gains, income, distributions and franking credits are provided in much the same way as a share broker end of year report.

 

6:29 How can I have a look at what you can do for me?

We have put together a fantastic fully online onboarding tool, which the is no obligation to invest, but offers the ability to tailor and view an indicative portfolio as we would invest for you today. The whole process is paperless and can be competed in 10-15 minutes.

You can invest through all major ownership types, including personal super, individual, joint names, Self Managed Super Funds, Trusts and Companies.

You have the ability to tailor your investment using 29 different ethical and portfolio screens, which effectively knocks out stocks from your portfolio that do not meet your requirements.

You can also seek free personal financial advice through the Limited Advice path, which will ask questions about important factors such as your time frame for investments, risk appetite and feelings towards volatility.

From there we can then recommend a portfolio from our range that is suitable for your personal circumstances.

You can also opt to just select the portfolio’s off the shelf using the Self Directed option.

The full portfolio, as we would invest today, and fees and initial brokerage estimates are available at the review stage

All information displayed on the screen is available in document form, along with the product disclosure statement, before you need to decide whether to invest.

There is also the ability for us to make a referral to a third party face to face advice network if you feel you need broader advice.

8:09 What else do you provide as an investor?

Once aboard, each client has their own fully featured Client Dashboard that provides a wealth of information. At anytime you can see your portfolio’s asset allocation, sector and country analysis and there is an investment grade analyst report for every holding in your portfolio.

In this dashboard you can also make additional changes to the portfolio such as seeking further investment advice or other portfolio adjustments and modifying your ethical and portfolio screens.

You will also have access to Praemium’s award winning client portal that provides cashflow and depositing information along with performance statistics and reporting.

As an investor you can expect an in depth monthly performance report, which details the macroeconomic drivers and narratives that are at work in your portfolio,

We also have our popular live weekly webinar series, giving you some serious insight into the themes that are front of mind of our investment team.

Additional Frequently asked questions 

Below are some further FAQ’s that aren’t included in the video

The fees are 0.64 %. Are the fees the same regardless of which product we select?

Yes, we have decided to charge a flat 0.64% across all funds and asset classes. This is predominately to simplify understanding for our investors, but also to ensure that our movements in the portfolio are understood to be for your interests, and not just to move to an asset class that benefits our bottom line. You can see a more detailed breakdown of our fees here

Are there any other fees that get added to this from any other of the companies involved in managing the funds?

The fee schedule in the Letter of Engagement / Statement of Advice is what is charged. The only variance may come from our estimates of initial brokerage, where we have estimated the high water mark (as the platform can ‘cross’ stock with other investors which means less market activity). 

Are there any exit fees that apply should we decide to exit our investments with Nucleus Wealth?

As all investments made through Nucleus Wealth are discrete and individual portfolios, the only exit fees that apply are the relevant brokerage to sell down your account. We can estimate this for you if required, and it is typically no more than 0.15% of the total investment if you have direct international shares in the portfolio.

Praemium (the external platform we currently use) trades daily and we can sell down in tranches or the entire account with a day notice. Typically, the proceeds of sale are returned to your nominated bank account within 4 business days.

Are there any restrictions that are placed on withdrawing from our investments with Nucleus Wealth should we decide to do that at some point in terms of timing or process?

All stocks are held beneficially in your name and are always in highly liquid markets. We have no capacity to ‘freeze’ or hold any of your investments in any way. Basically, you advise on your preference in how you would like to exit and I can execute this for you.

If we decided to contribute more to our investments with Nucleus Wealth at some point are there any entry fees payable?

Common question! Always happy to accept more, just transfer to the cash account through BPAY. Additional funds usually take around 3 business days to appear in the account, and will be automatically added to the portfolio. No extra costs, just the brokerage for those trades.

If we choose the Core International option – there is no tactical component to this asset allocation – is there any mechanism available via Nucleus Wealth that would alert us to a need to re-consider the allocation if for example there was an international downturn?

We can’t promise a mechanism as such, however with regular posting on this site, monthly reports and other online publications we do I would suggest that this could serve as this notice? 

Remember that the Core International portfolio provides coverage to the other 98% of world markets and that in the event of one major market looking worrisome, it leaves a lot of other ones to find value. If you wish to make a change to the portfolio, simply head to the Nucleus Wealth Client Portal, select the account in question and adjust using the ‘Change Portfolio’ feature.

In the Core International model are the share parcels bought and sold regularly? Will we get to see the current shareholding through the portal?

We are expecting Core International portfolio turnover of around 20-30% pa. in the current environment. Obviously, in poorer times, we may need to raise this. As an investor, you have full visibility through the platform client portal, which gives you full transparency of your portfolio, cash holdings and fees/transactions. 

The is also the Nucleus Wealth Client Portal which provides an in-depth look at all your accounts with us, including asset allocation breakdowns, sector weightings and an analyst report on every stock in the portfolio.

Can you explain what is the basis for the benchmark performance figures in the Nucleus Investment Guide (i.e. CPI + 3.5% for foundation etc)?

In regards to the benchmark figures, we have picked a similar benchmark to the Future Fund that reflects the risk level in the portfolio. We had the option of a ‘blended index’ figure or CPI+, and have opted for CPI+ to help simplify comprehension of the internal risk levels of each model.

Additional questions? Don’t hesitate to contact us via email or booking a call

 

 

Tim Fuller is an Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.