Investment
Platform hints at aggressive expansion

The first quarterly results under Xplore Wealth's new chief executive Michael Wright are out and he has hinted at an expansion plan for all of the firm's businesses, including adding more sub-plans to its superannuation offering.

Xplore's quarterly results for September reported group funds under administration were up 4.2% to $14.987 billion.

Don Sharp, who was acting chief executive prior to Wright taking the reins, will continue to provide "specific project based" consultancy services to Xplore for a further six months

Sharp's work will be focussed on a retail direct-HIN offer for independent financial advisers and a new foreign exchange capability for Xplore.

September's results were the first results under Wright.

Wright told Financial Standard he is focusing on bringing together Xplore's four businesses - the platform, responsible superannuation entity (RSE), managed discretionary accounts and DIY super administration.

"The two acquisitions we made last year, Aracon Superannuation and DIY Master have been with the group for less than 12 months. I would argue we've done our acquisition phase and now we need to stitch together," Wright said.

"Where we're focussing our resources is stitching the businesses together. Last week we employed a business analyst as part of the one platform program and we also had an external IT consulting firm commence detailed scoping and planning."

When it comes to Aracon, which Xplore acquired less than a year ago, expansion is on the cards.

Wright said: "How do we put our super fund on track for sustainable growth? How do we grow Aracon to a level that is exponentially higher than today? Today it is about $370 million."

Aracon already has five sub-plans on board including Fairvine and Xplore's own super fund offering.

"We met with APRA to talk about our business plan for Aracon," Wright said.

"We think it'll go to eight sub-plans. Some will be start up, some could be successor fund transfer, some will be members direct, some will be through a platform and an adviser. We see a real opportunity for us to grow the super fund."

As for the Linear business, which Xplore acquired in 2017, the company recently reported to investors that a research and development claim to AusIndustry had been denied.

Wright said when Xplore acquired Linear it had wholesale clients and was developing software and technology to serve those clients.

"As part of developing that they are putting in millions of dollars to create that ability. They then submitted research and development claims to AusIndustry, AusIndustry has in essence said they are not sure that everything that was put up is claimable," Wright explained.

"The technicality is whether the hypothesis was strong enough about the unknown of what the technology could do or was the business clear about what it could do. We will be asking AusIndustry to review the ruling. Then they'll go through the process again."

Wright confirmed that Xplore has had conversations with ASIC as part of its current work around MDAs and said that he understands ASIC's paper is due this side of Christmas.

"The industry will have a chance to make a formal submission, we will definitely make a formal submission," he added.

Read more: XploreAusIndustryASICLinearMichael WrightXplore WealthAracon SuperannuationDIY MasterDon SharpFairvineFinancial Standard
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