Class will spend $18 million building and upgrading its back-end technology as it enters into the second year of its transformation strategy, which will broaden its offering beyond the SMSF sector, according to the head of the firm.
Class chief executive Andrew Russell told selfmanagedsuper the figure for renewing the company’s technology stack would exceed that spent in 2020 and was integral to its plans to move from an SMSF software provider to a multi-product accounting and wealth firm.
“We have started the second year of our Reimagination strategy having spent $13 million in the first year and will spend $18 million in the second as part of our technology investment,” Russell said.
“In that time, we have added a new vertical business with legal documents via the acquisition of NowInfinity and launched Class Trust in October, which offers functions that are similar to our SMSF product.”
He said the document provision business would continue to be an area of focus after it had examined the potential size of that market and found there was $108 million in annual revenue available and the increase on document use was projected to grow by 5 per cent to 7 per cent each year.
While Class had acquired and integrated NowInfinity and Smartcorp into its business, it would also retain links with other document providers, he said.
“We see third parties as partners and our current relationships meet our needs, but we may consider future acquisitions if they benefit our customers,” he said.
He said the expansion into trusts in late 2020 was because they had become the second biggest vehicle for wealth creation and clients who had funds that exceeded their superannuation caps were looking for other vehicles to use, but he was unsure if Class would also move into estate planning.
“We are considering it for the future as it is process driven and relies on rules-based coding, and we are exploring the size of the market and if our customers have any interest in products in that space,” he said.
“There must be reasons why no one has stepped into that space yet and we need to consider whether we want to build into it and be that first mover, but at present we already have a full road map.”
