Hi all, We are currently using Class and switched from BGL last...

Hi all,

We are currently using Class and switched from BGL last year.

This will surprise you, but we have decided to terminate our Class subscription. Now you must all be wondering why on earth would you do that after such a short amount of time. I have listed our reasons below.

- The SMSF market is changing and doing so at a fast rate. Now with a simple Google search some online Accountants are completing the annual compliance at a cost of $999 with audit!! (with certain conditions). However you will not struggle to find a contractor that will complete the annual accounts for $400 + GST (the balance of the fund determines the cost). http://www.superfund.me/fees/

Taking this into consideration, would you pay Class $280 + GST (off the top of my head) per fund, plus you will need to complete the administration. Otherwise, would you pay a contractor to complete the job for an additional $120 exc. GST? (best case scenario, this depends on the fund balance). In additon, the concept of opportunity cost also presented us with the option to earn additional money in those 2-3 hours saved to warrant the additonal cost.

- Class do not cater to the small accounting firms. The 25 minimum funds is a killer for small business, especially if a majority of the funds hold a term deposit as the main investment. What is stopping them from dropping this to 15 funds and welcoming the small firms into using Class?

Some positives are the software is user friendly and easy to use. I was also pleased with the customer service.

Now in my opinion, this technology based stock would scare me for the following reasons. Even though BGL 360 is not as user friendly and does not offer the current Class functions and features, they will always look to compete and gain further market share. What is not to say they are currently developing a software that is much more advanced and cheaper than Class? In short, there are very low barriers to entry and software features can always be copied by competitors.

Secondly, due to the changing market place (reduced costs of outsourcing and a simple Google search alluding people to the cheap SMSF administration for $999). I think we will see a similar service offering to the current cheap tax returns for a cost of $99 (not quite as cheap lol), in years to come. Can Class increase the cost of the software to accountants, when margins will be slimming in years to come? But then again Class do direct the service towards larger firms, and clients are used to paying a premium. So this can be contested and only time will tell!