Welcome to the Mclowd Community Newsletter.
“The value vampire is a dangerous form of digital disruptor that leaves all other players in the market in turmoil. A value vampire’s defining characteristic is that its competitive advantage serves to shrink the overall revenues or profits of a market.
Value vampires are essentially an extreme form of digital disruption, and their ability to create three fundamental forms of value for customers—cost value, experience value, and platform value—is exceptional. They are hazardous to incumbents’ health because they provide a blueprint for how disruption occurs.”
Introduction
The beginning of 2016 has been characterised by extreme market volatility, reflecting a daily battle between the ‘animal spirits’ of investors and macroeconomic reality.
For better or worse in that battle economic reality will always prevail, and no amount of negative interest rates, quantitative easing or biblical budget deficits will prevent asset prices and incomes from coming under increasing pressure from the spectre (and reality) of deflation.
As a consequence the entire SMSF value chain (not to mention the wider asset management industry) will be subjected to intense scrutiny.
Trustees will be looking carefully at their administration costs (which in many instances consume 10% of Fund returns), and in turn practitioners will be reviewing their own cost structures, including the licence fees payable for SMSF accounting software (which in many instances would consume 5-10% of per-client billables).
In this context it is not surprising that January was a record month for Mclowd, as measured by the number of clients signed up by their practitioner.
Administration Platform Update
2016 WIP targets include:
- Improved usability relating to year end rollover
- Improved support for:
- Fixed interest rollover
- Assets denominated in foreign currencies
- Extension of the multi-parcel logic from equities to other relevant asset classes
- General workflow tools (which we acknowledge are today largely absent)
While responding to user feedback as to core functionality must remain the highest priority for now, we also have an aggressive 2016 schedule in terms of third party integrations, including:
- Broker data (SISS Data Services)
- Bank data (Macquarie)
- Bonds (FIIG Securities)
- Roboadvice (CapitalU)
- P2P lending
- Audit workflow
Postscript
If digital disruption is comprised of cost, experience and platform value then the future for the Mclowd Community is very clear.
No administration software provider in the SMSF sector makes their core product freely available, so in terms of cost value Mclowd has taken a leadership position.
In terms of experience value Mclowd has much work still to do, but as each week passes there is less and less evidence to support the hypothesis that we will not – in due course – close the gap with incumbents (and I would like to acknowledge the contributions of those who are injecting social capital into the Community in order to deliver that outcome).
With so many third parties now integrating with Mclowd, platform value is also on the rise.
Provided Mclowd can deliver on all of the above during 2016, it will indeed have become a value vampire.
Regards,
Ashley Porter
Managing Director
Mclowd Pty Ltd