The moniker of the younger generation is transparency, its modus operandi is collaboration, and its self-expression is exercised by way of peer production in laterally-scaled networks.
— Jeremy Rifkin
In the February Newsletter I described how the SMSF value chain is coming under increasing cost pressure as a consequence of declines in asset prices and incomes.
Days after the Newsletter was published BHP announced that – instead of the unending stream of increased dividends previously forecast – it would in fact be cutting its payout by 74%.
BHP slashed its dividend because the BHP dividend was never sustainable in the first place.
The rivers of gold that flowed through the BHP P&L over the last seven years can be linked directly back to the US$20 trillion expansion of the Chinese banking system during that period. This balance sheet funding was used to drive investment and consumption outcomes that would not have occurred absent that expansion (and there was never any evidence to support the hypothesis that balance sheet alchemy on that scale was ever going to be sustainable).
Administration Platform Update
With the kool-aid well and truly starting to dry up, February saw a record number of registrations to Mclowd’s free administration platform, as SMSF assets seek out a home where net returns can be maximised in an increasingly volatile environment.
With the relevant Corporations Act changes scheduled to take effect from 1 July, continued growth in user numbers (and revenues) also presents the opportunity to conduct an equity crowdfunding campaign later in the year.
Members of the Community are welcome to register their interest at firstname.lastname@example.org.
Governance and Training
February also saw Mclowd hold a Focus Group Meeting, which brought together the three key stakeholder groups from across the Community:
- Individual trustees
- SMSF practitioners
- Product partners
One of the outcomes from the meeting was a request for Mclowd to start running paid training seminars, the first of which will be held in Sydney on April 26th. This half-day session will be run in conjunction with the inaugural meeting of the Mclowd User Group.
In order to maximise learning outcomes numbers will be strictly limited, and we will use this first session to:
- Assist in the creation of additional self-help content
- Arrange similar seminars in other capital cities as demand warrants
The other key outcome was the development of a draft Charter for the Community, which will be distributed for feedback next month.
Mclowd’s vision is to maximise net returns (and hence retirement outcomes) for over 1 million Australians.
In the first instance this necessitates the migration of nearly $600 billion of SMSF assets to a free administration platform (in order to eliminate the tens of millions of dollars in annual licence fees currently payable for access to incumbent technology).
Given the nature of its in-app revenue model this was never going to be a task that Mclowd could finance / undertake by itself.
However by creating a governance structure in which a significant proportion of the benefit of the Community’s success has effectively been assigned to the stakeholders themselves, Mclowd can now share the effort required to deliver that outcome.
While it will take time for the reality to sink in, in due course it will become clear that Mclowd is an early example of what Rikfin would describe as the Collaborative Commons.
Mclowd Pty Ltd