Class today announced it had achieved substantial growth in its billable portfolios, the majority of which were SMSFs, in addition to winning SMSF accountants’ business where they were moving over to the cloud.
“Billable portfolio growth is the primary driver of our revenue numbers and that growth has continued at a steady pace throughout the last financial year,” Class chief executive Kevin Bungard said at the company’s annual general meeting in Sydney.
“We had over 112,000 billable portfolios at the end of FY16.
“We have over 125,000 billable portfolios today, after we added a further 12,030 portfolios, which is a significant uplift on the same period last year, but this is an outlier attributable to the rapid loaning of funds by Findex – a major new client signed towards the end of last financial year.
“The majority of those portfolios were SMSFs, but the last financial year’s official launch of our non-super product, Class Portfolio, has seen an increase in the number of non-SMSF portfolios.”
Next quarter’s portfolio growth should revert back in line with the seasonally adjusted trends of the past few years, he said.
Commenting on Class’s SMSF market share, he revealed its steady growth was reflected in the rate of cloud adoption by accountants.
“Investment Trends asks SMSF accountants each year if they are ‘likely’ or ‘very likely’ to change software in the next 12 months,” he said.
“Those that say they are ‘very likely’ to change has been steady at 8 per cent to 9 per cent for the last four years – our analysis indicates that those that actually do switch has been steady at 5 per cent to 6 per cent of the overall market.
“Class Super has been very effective at capturing those switching.
“Our SMSF market share increases over the last few years have been steady, seeing us gain 4 per cent of the market in FY14 and 4.5 per cent of the market in both FY15 and FY16.”
He said it was reasonable to expect that at some stage the industry would reach a tipping point where there would be a more rapid adoption of cloud software.
“The number of accountants who say they are ‘likely’ to switch is steadily increasing,” he said.
“We anticipate that this build-up will help drive an acceleration of cloud adoption within the next couple of years.
“We are winning most of the SMSF accountants that are moving to the cloud now, we are actively promoting cloud adoption and we are well positioned for when cloud adoption accelerates.”