Nucoro, the London based fintech company providing bespoke white-labelled technology focused on delivering digital investment solutions to third parties, has announced it plans to start targeting financial institutions in Ireland, claiming the country has one of the fastest growing wealth management sectors in Europe.
Nucoro says there are several factors fuelling strong growth in Ireland’s wealth management sector. These include a rapid increase in the country’s population of mass affluent and wealthy citizens - the country has one of the fastest rates of growth in Europe; one of the toughest inheritance tax regimes in the world; a rapidly increasing pool of inter-generational wealth being transferred; and a growing pool of young investors fuelled by the increasing number of tech and financial companies based in Ireland - partly due to Brexit.
Ireland’s wealth management sector will also get a further boost from the country’s new auto-enrolment defined contribution (DC) pension savings system scheduled to go live by 2022.
In addition, Ireland’s financial services companies are experiencing increased competition and growing demands from customers and more are considering offering digital investment solutions so they can engage with customers better, create greater brand loyalty, differentiate their propositions and develop new income streams. It also says the growth of digital wealth management means it’s now easier for companies to offer this service than ever before.
Ireland’s wealth management sector - the factors behind strong growth
More mass affluent people and millionaires
Analysis (1) of industry data by Nucoro reveals there are some 77,984 millionaires in Ireland today, an increase of around 32% since 2013. The corresponding percentage increases for Germany, France and the UK are 15%,10% and 12% respectively, and for Europe it’s 14%. Nucoro’s analysis reveals that between 2018 and 2023, some 17,830 new millionaires could be created in Ireland, a rise of 23%.
Inheritance tax and intergenerational wealth
Ireland’s inheritance tax rate is among the top ten highest in the OECD (2). However, it has been estimated (3) that the total inter-generational wealth transfer at death in Ireland is currently running at an annual rate of €5.5-6bn. However, this could rise to somewhere between €9.6bn and €14bn per annum by the end of the 2017-2036 period, depending on the assumed rate of growth in wealth. This suggests a potential 20-year total inter-generational wealth transfer at death figure of at least €122bn and perhaps up to €185bn in the 2017-2036 period.
People will increasingly want wealth management advice on how best to transfer this wealth and manage it effectively.
Growing pool of young investors
Dublin’s financial and tech sectors are enjoying strong growth, and this has been partly fuelled by Brexit. Dublin is proving to be the most popular destination for companies relocating all or some of their staff from the UK, with over 5,000 jobs being created in Ireland because of this (4). Many of these people are financially savvy and use wealth management services.
Nikolai Hack, COO Nucoro said: “We have had great success in supporting a number of financial services companies with their digital wealth management services, and we are now looking to support companies in Ireland wanting to enhance or expand into this area.
“We believe Ireland’s wealth management sector will enjoy some of the biggest growth in Europe over the next few years, and we are keen to be a part of this.”
From client onboarding to portfolio construction through to billing, Nucoro combines all the tools required to build the next generation of wealth management propositions. To help financial services companies move forward, Nucoro offers a new technology-based foundation built without legacies - a complete overhaul to the models of client service and accessibility. It offers a radically different approach to the relationship between technology providers and the organisations adopting their solutions.
Nucoro offers a fully automated, AI-powered wealth management platform to UK retail investors called Exo Investing. Within the first year of operation, Exo won two industry awards (Best digital wealth manager OTY + Industry Innovator OTY at the AltFi awards 2018), was named as a finalist in three more and selected to two disruptive company annual indexes (Wealthtech 100 and Disruption50’s 100 most disruptive UK companies).
Nucoro is making this technology available for financial services companies based in Ireland that have the ambition to truly innovate and future-proof their businesses - and are struggling to realise their digital ambitions.