Outdated technology hitting bottom lines, says Class Super
A large proportion of accountants and advisers are still using outdated technology which could be impacting the ability of their business to build scale, according to the chief executive of Class Super.
Speaking to SMSF Adviser, Class Super’s chief executive Kevin Bungard said about 20 per cent of the new clients that Class Super sees are still using general ledgers and Excel to administer funds, as opposed to technology designed for SMSF administration.
While these technologies may be simple to use at the outset, Mr Bungard said they can become complex in terms of workflow, updating systems and documentation.
“If you’re trying to do that on spreadsheets and Word documents it’s not going to work if you’re trying to do that on scale,” he said.
Using older technology Mr Bungard said could therefore be a barrier to the expansion of SMSF businesses.
“Traditionally the challenge in self-managed super has been getting scale because once you’re managing more than 100 SMSFs, the complexities of managing that can be quite daunting,” he said.
“Technology means you can have staff manage a greater number of funds and that means if it’s a business area you’re interested in you should be able to provide a better level of service to a larger number of clients.”
Mr Bungard said the firms using older systems tend to be the ones administering 10–20 SMSFs while the firms administering 100 funds or more have newer systems in place.
However, he said the firms servicing fewer SMSFs may not be applying the technology as SMSFs are not a large part of the business and therefore don’t want to make the investment.
“We tend to find that clients that are focused on growing the SMSF part of the business are investing in technology and are trying to deliver a higher level of service to those clients,” he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.