Legislation and a competitive market will force financial advisers to adopt more sophisticated customer services, said Praemium, a company that made cloud software for superannuation fund administrators.

The Future of Financial Advice (FoFA) reforms were the main driver for change, as regular disclosure of fees would force advisers to provide a higher level of customer service, said Dylan Navra, Praemium’s business development manager.

“Advisers need to embrace the changes in regulation rather than be fearful of it,” Navra said.

One controversial change was the legislated introduction of the annual fee disclosure statement.

“Before, an adviser could just sell the product, see the client every six or 12 months, and they would just be getting ongoing advisor fees through a product provider or a platform,” Navra said. “But now a client needs to be informed what they’re paying and the adviser needs to prove to them that they service they’re providing is worth what the client is paying.”

Praemium, which last year acquired an IT services company that sold Microsoft Dynamics Online, advocated CRM software as one way advisers could prove their value to clients. The audit log in a CRM recorded the number of hours an agency had acted for a client.

For example, adding up the hours spent by the paraplanner and financial adviser might come to 27 hours at an hourly rate of $300, which was much higher than the $2,500 service fee, Navra said.

Despite a reputation for complexity, CRM software could help financial advisers with marketing by segmenting clients into groups and sending targeted newsletters or offers, Navra said.

Clients often dealt with several professionals to manage their finances. Advisers could improve their usefulness by giving other consultants access to a client’s files with approval. The client wouldn’t need to send the same information to each adviser.

Praemium recently added Microsoft’s CRM program to its cloud superannuation portfolio software and released it under the WealthCraft brand.