Financial services company The Motley Fool has today announced the launch of a brand new type of financial product designed to harness the growing size and power of the Superannuation system in Australia.
To be known as Motley Fool Alchemy, the new product will make it easier for current and future governments to utilise much of Australia's world-leading retirement savings system for other causes they consider worthy, while simultaneously delivering on the stated aim of Superannuation: to deliver a comfortable retirement and lessen the burden on the Federal Budget.
"Superannuation has been a wonderful system, and has created a pool of savings that is both world-leading and the envy of every other country. But there's an opportunity to harness that success to make lots of other dreams come true, too. With Motley Fool Alchemy, Australians can have their cake and eat it, too", said Motley Fool's Head of Growth Strategy, Flora Ipol.
"In the past, many have believed that Superannuation should exist for the sole purpose of providing for Australians in retirement, simultaneously helping lower the burden for future taxpayers. We now believe past Australian governments were too feckless and lacking in ambition", she added.
The Motley Fool, having studied 'alternative' economic thinking such as Modern Monetary Theory (MMT), now believes that a similar approach can be taken with Superannuation.
"We think one plus one can equal three", Ipol said. "If you really think about it, you can imagine a scenario where Superannuation can be used for retirement incomes, but also lots of other things, besides."
While politicians have variously called for Super to be used for social housing, aged care, jetskis and housing deposits, The Motley Fool believes that's only the start of the opportunity. And for a relatively low fee, expected to be somewhere around 1.4% of assets (per mensem) Motley Fool Alchemy will be able to provide an investment strategy (with associated non-traditional record keeping) for any Super fund, allowing a member's Superannuation to be used for many more things.
"People have trouble thinking ahead. That's why Super was considered so important – helping Australians prepare for retirement, even when they didn't want to think about it" commented Ipol. "But we can help governments and individuals take advantage of that shortcoming to harness the power of Super for almost anything. Yes, we'll charge a fee, but the real benefit is in the simultaneous opportunity of current spending and leaving retirement for your future self to worry about."
Recent research has shown that, given the choice of saving for retirement or buying a flatscreen TV, almost 1 million Australians preferred the latter. And while governments got some credit for the new idiot boxes in homes around the country, The Motley Fool believes that was just the tip of the iceberg.
Taking a lead from buy-now-pay-later providers, Motley Fool Alchemy turbocharges the idea, using people's inability to really grasp the power of compounding to solve both political and economic problems… using voters' own money.
"I mean, sure, $10,000 invested in the ASX in 1993 might have grown to be worth $130,000 three decades later, according to Vanguard… but that's not going to keep governments in power, or keep social media influencers in coconut water and lycra."
"All you have to do is say 'A house is better than Super', and hope they don't do the maths on what they're giving up, or the fact you turned two things that should both be possible in Australia into a false 'either/or' choice. It's all about framing… and once you've worked out the spin, the rest takes care of itself."
The Motley Fool believes that the idea could be used to fund anything from university education, overseas holidays, and rapidly depreciating new cars, to cosmetic surgery, Taylor Swift tickets and nuclear submarines.
"We acknowledge that people will have less – probably a lot less – in retirement. But they probably don't realise it yet. The best part? People will thank you for it, and the politicians who win votes on that basis will be out of Parliament before people's retirement hits", Ipol added. "Where else can you steal from people's future, with their full consent and support, and have them vote for you as a result? That's what Alchemy is all about."
Motley Fool Alchemy is slated to launch in late 2024, after a few small legislative changes have been made. The model – closely resembling the toll-road model where governments lock future generations into decades of tolls in exchange for cutting a pre-election ribbon in a hard hat and hi-vis vest – should pass parliament easily, according to the company, once the benefits are explained to the politicians.
TMF will spend the next few months lobbying parliamentarians, explaining how their pet projects will suddenly appear affordable by judicious obfuscation of the long term costs of spending the money now, rather than letting it compound for retirement.
"It's true we've argued against the weakening of Superannuation in the past", Ipol confirmed. "But with the level of self-interest in politics, the power and money wielded by lobby groups these days, and the unwillingness to make hard, long-term decisions in the national interest, we've decided that our opposition will be fruitless, and we might as well jump on the gravy train before it departs the station. It's time to drink the Kool-Aid and just believe that one plus one equals three."
In some candid comments, Flora Ipol added: "Sure, people would be far better off were Superannuation contributions left to compound for decades, providing the average Australian with a vastly superior retirement, but governments won't let that happen unless we make them. They'd rather see Super as a piggy bank for their own pet projects and re-election efforts. And hey, we've seen what happened with buy-now-pay-later, with many Australians easily duped into trading away their future wealth for a new toy, now. We could try to change that, but we can't make money from it."
The company had originally considered Motley Fool Super For Everything and Motley Fool Magic Pudding as potential names for the new product, but felt even the politicians wouldn't be able to say either out loud without smirking knowingly. Instead, it chose Alchemy as the new name, because it sounded vaguely scientific, but still gave the company plausible deniability if legal action was instigated. Because alchemy – turning base metals into gold – isn't actually possible, and it therefore perfectly represented the fiction that somehow using Super for everything and anything a government dreamed up could actually serve both purposes at the same time.
"MMT shows that if people want to believe something badly enough, they'll convince themselves. Not to mention the Elon fanboys. And while we've historically railed against the misuse of Super and the fact that there are too many snouts in the financial services trough, at some point you need to know when you're beaten. And then just line up at the trough like everyone else." Ipol said.
"Sure, lots of people will end up worse off, but that's never stopped some in our industry, or some politicians, in the past, so we might as well get our clip of this magic ticket while everyone else is suspending disbelief."
In related changes, The Motley Fool has also announced initial plans to facilitate additional government borrowing for a small fee of 1.4% of all money raised, convincing politicians on both sides that if they pretend growing government debt isn't a problem, the rest of us will probably fixate on alleged grocery price gouging and they can keep on spending like drunken sailors, running up the mother of all bar tabs.
"Turns out the suspension of disbelief, plus a little of the old-fashioned Roman 'bread and circuses' is a powerful thing." added Ipol. "Throw in a little 'my enemy's enemy is my friend' and there's nothing a self-interested politician or a conflicted finance industry can't do".
The Motley Fool will use this new insight to also diversify into new markets by launching a range of 'Spinal Tap' audio speakers that are 10% louder by going up to 11, rather than the current analogue 10, and will investigate additional opportunities to 'create value' by advising firms on mergers and demergers, where both – often at the same time – can be justified as 'creating value'. At least for the investment bankers who convince companies to do it.
But there are limits to the firm's plans. The Motley Fool categorically rules out (for the immediate future, at least) an intention to use this new-found lack of morals to form a political party and try to win votes by promising the world and dangling a few trinkets in front of voters.
"We're good, but not that good", said Ipol. "Besides, we could never do it as well as the current crop. We'll stick to just enabling them… for a fee."
ENDS
Media/government inquiries: Flora Ipol info@fool.com.au
