Welcome to the Mclowd Community Newsletter.
“Given these figures it’s clear why the software makers would be pushing their new per-fund priced cloud-based SMSF software.”
Moving to cloud-based SMSF software comes with a cost
Last year Luke Smith of website www.solepurposetest.com published an article summarising the cost of cloud-based SMSF accounting software.
Based on publicly available information he calculated the annual licence costs for an accounting firm with 250 Funds as follows:
- Supermate $22,770 p.a.
- BGL SF360 $41,250 p.a.
- Class Super $56,250 p.a.
(It should be noted that Luke acknowledged that these figures reflect different offerings in terms of data feeds and other third party integration, but his analysis was designed not as a price comparison, but to highlight the enormous annual cost of these packages).
At the beginning of 2015 – when that article was published – Mclowd was not a realistic alternative for SMSF practices of that (or any) size, so it was entirely appropriate that Mclowd not be included in such analysis.
However at the beginning of 2016 (and even before the ink is dry on the Class Super IPO), Mclowd has now evolved to the point where a number of practitioners are using Mclowd to manage multiple client Funds, without any obligation to pay licence fees for the core software (regardless of volume).
Administration Platform Update
The engagement of a growing number of practitioners will be reflected in our 2016 WIP priorities.
In addition to polishing off the core functionality, we need to deliver on the workflow tools that accountants and financial planners require to manage interaction with individual clients.
We will publish a list of these targets as part of the February Newsletter.
Invitation to Attend Trustee Focus Group – 11th February
At the most recent Lunch ‘n Learn session a number of users proposed that a formal Trustee User Group be established, and trustee Doug Turner has kindly offered to be the catalyst for this process.
This is a move that I wholeheartedly support, as it reflects the bottom-up, user-driven approach that has got Mclowd to this point (with just $429K in equity capital).
In the first instance an extended Town Hall-style meeting will be held in Sydney on Thursday February 11th. Users are encouraged to come along, roll up their sleeves and help map out the future of Mclowd. To register click here.
In addition to driving the process of collaboration (as to how the Community evolves) I would also expect this meeting to trigger the establishment of chapters in other cities. Interested users can contact Doug directly.
If you were selling shares in to the Class IPO you would no doubt describe the transaction as a spectacular success.
Based on the FY15 accounts Class operates on an EBIT margin of 33%, and the company is now valued at over $200 million.
However as Mclowd continues to mature SMSF practitioners using (or intending to use) Class should be under no illusion: they will effectively be participating in the transfer of $200 million of value from their clients’ retirement savings to the shareholders of Class.
Provided those clients would have made the same decision (in terms of the technology used to manage their SMSF), then those practitioners can be confident about the decision they have made on their client’s behalf.
However I now spend every day speaking to SMSF trustees who have migrated to Mclowd because they want to reduce costs and maximise their retirement savings, and I am not left with that impression.
Mclowd Pty Ltd