Welcome to the Mclowd Newsletter, our monthly communication to Trustee Users, Marketplace Professionals and Partners.
Tomorrow marks the first anniversary of the launch of the Beta version of the Mclowd Platform.
Back then it was a very basic system which lacked many of the features of existing software.
This was a deliberate move on our part designed to trigger engagement from the Trustee Community – in order to prove (or disprove) the hypothesis that a business model could be developed around a free cloud-based SMSF accounting system.
(Incumbents who didn’t understand the concept of Lean Start Up mistakenly interpreted this as a sign of weakness, when in actual fact it was an indication that Mclowd had the potential to be a very disruptive force because of the capital efficiencies associated with this approach).
12 months on we have moved nearly $100 million in assets across to the Platform and are now recording month-on-month growth of 20%, as well as starting to see increased activity in the Marketplace.
However my confidence in the Mclowd model has very little to do with assets under management and everything to do with the quality of execution being delivered across the Team, as well as the increasing levels of engagement and support from SMSF Trustees and the rest of the Mclowd Community.
This is epitomised by Trustee User Mark Reynolds, who has offered to oversee the development and ongoing moderation of the User Forum and Wiki. We are leveraging free tools to create these environments and because of the economics of cloud computing and the power of the crowd all of this will take place while Mclowd deploys almost no capital (or operating expenditure).
As with many new ventures it appears that timing has also played a part in our success, with a general decline in ‘perceived value’ across the funds management value chain leading to a greater focus on costs.
This change in perception is reflected in the following email that I recently received from an accounting firm:
Firstly, this is a great idea. Hats off to you and the development team.
My question is this: is it possible for accounting firms to use Mclowd as a viable alternative to the very expensive BGL Simplefund?
While Platform development is currently focused on addressing the needs of individual Trustees, it is only a matter of time before we are in a position to provide support for channel partners such as accounting and financial planning firms, and within the next 12 months I would expect the Mclowd model to have scaled to the point where we can expand the process of balance sheet displacement beyond SMSF accounting.
This week has seen the release of the following new functions:
- ETP Roll In – Opening Balances (Unsegregated Funds)
- ETP Roll In – Income (Segregated and Unsegregated Funds)
- Further refinements to the ability to edit individual transactions
- Improved date validation for Dividend Reinvestment
Full release notes can be accessed on the website, and while still in testing, the following additional features will be available over the next couple of weeks:
- Trial Balance Report
- GL Rollover/Roll Back
- Asset Revaluation
- Member Statement Reports
As mentioned previously, next month will see the launch of the User Forum, where Trustees will be able to discuss issues relating to the Platform and engage with SMSF Professionals in the Marketplace.
The User Forum is the first step towards greater integration between the Platform and Marketplace, and while today they are separate environments from a technology point of view, we now have the funding necessary to progressively break down these barriers.
Like the Platform the current website is 12 months old, and does not reflect the progress that has been made in building the Mclowd Community.
A website refresh is in development, and is scheduled for release next quarter. It will include:
- Improved clarity as between the Platform and Marketplace
- Upgraded Features and Help sections
- SMSF Wiki
Funds Management 2.0
We are steadily laying the foundations for ‘digital disruption’ of the funds management industry, and to mark our first birthday I’m going to coin a new phrase:
Funds Management 2.0
Under “Funds Management 1.0” Australia’s $1.6 trillion in superannuation savings attracts nearly $20 billion in fees each year, and many of the incumbent individuals and organisations are remunerated on the basis of the assets they manage rather than the value they add.
“Funds Management 2.0” will be a highly transparent and contested industry characterised by marginal cost pricing, a number of the incumbent vendors will have disappeared and per unit costs will have declined by 70-90%. Under these circumstances Australia’s collective retirement savings will be better off to the tune of $15 billion per annum, and the fees being charged will represent 1% of income, not 1% of assets.
Thanks again for your continued support of our efforts to drive down the costs of investment administration.
Mclowd Pty Ltd