Site Logo
Praemium Archives - The Latest on Accounting Tech for SMEs

Cloud-Savvy Accountants to Squeeze Planners Out of Super: BGL

by

Changes to financial services legislation would see more accountants offering strategic advice and reduce the number of financial planners involved with self-managed superannuation funds (SMSFs), said Ron Lesh, CEO of BGL.

“A very small percentage of SMSFs are under advice from planners, primarily because planners don’t have much they can offer,” Lesh said. “If the accountants can provide strategic advice, a lot of funds with planners will move back to accountants. It will be a shift over time but I think it will happen.”

BGL planned to release its cloud program Simple Fund 360 in November as a public beta. The official launch would be held early next year.

BGL also appeared to confirm another regulation-driven trend first predicted by rival Praemium. Praemium had recently launched added a customer management program so advisers could record an audit trail of communications, documents and interactions with clients. The Wealthcraft solution integrated Microsoft Dynamics CRM Online with Praemium’s SMSF portfolio and reporting platform.

BGL would help SMSF administrators set up SugarCRM to manage their clients and integrate the CRM with Simple Fund 360, Lesh said. BGL had recently moved to SugarCRM and had hired a developer to customise it for the software company.

“SMSF administrators have all these systems that don’t hook into the SMSF platform. We can do it for them,” Lesh said. The free, basic version of SugarCRM “would give them all they need”, Lesh added.

Improve Client Service To Avoid Audits, Praemium Tells Advisers

by

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.

Advisers Forced To Track Clients Under New Laws: Praemium

by

Tougher regulations for financial advisers would require them to track all interactions with clients to hold as evidence against complaints, said wealth-management software company Praemium.

The pending Future of Financial Advice (FoFA) reforms by the Australian federal government created an onus on the adviser to prove they provided the best advice to their client, said Dylan Navra, global product manager at Praemium.

“FoFA covers anyone who gives personal advice, such as direct equities, tax planning, insurance and so on. If a client made a complaint against the adviser, the ombudsman would require the adviser to demonstrate that time the advice was given it was in the best interests of the client,” Navra said.

This would require the adviser to recreate the four steps involved in giving advice; the collection of facts about the client, a goal assessment, the recommendation given and proof that it was implemented in exactly the way it was suggested to the client.

The reforms aimed to bring greater transparency to financial services and uncover commissions paid to advisers for selling particular products. Many clients lost money investing in unsustainable agribusinesses under a widespread tax minimisation scheme several years ago. Accountants received commissions for recommending particular agribusinesses but had no obligation to reveal the commissions to investors.

The FoFA reforms became law on 1 July after a year’s delay, but there is pressure to defer it further. “My opinion is that they didn’t give enough information as to how to maintain their new compliance” with aspects such as the fee disclosure statement and the opt-in form, Navra said.

The lack of information had generated a huge amount of fear and uncertainty among advisers, Navra added. The reforms could also be enacted before next July depending on the results of the federal election.

“There are certain changes in the law that will affect almost every industry including accounting, which limits them from the kind of advice they would give,” Navra said.

In response to the reforms, Praemium recently acquired a customer relationship management (CRM) software company and has launched a CRM program to manage information about advisers’ clients.

The Wealthcraft program was built on Microsoft’s cloud-based database CRM Dynamics Online and was integrated with Praemium’s cloud-based wealth management platform.

“I can use a CRM system to record the clients’ details, track in the audit log changes, demonstrate evidence of the client signing and store documentation in one place,” Navra said.

About D1

Digital First covers news and opinions on accounting technology and is read by tech-savvy accountants who understand the importance of technology in establishing competitive advantage.
>