David Whyte's 5 predictions for 2020

1. FAP Interim licence applications will gather considerable momentum in the first quarter and may even continue through June. However, the number of full licence applications will be considerably lower as prohibitive cost and complexity become apparent to individual advisers. This will be followed by a period of consolidation as 'orphaned' advisers either seek shelter or leave the industry. Corporatised adviser organisations will also consolidate as scale becomes a more influential factor in sustainability and previously viable business models become more fragile.

2. One or two product providers will open the door to homeless unlicensed advisers and the return of tied agencies will have been legitimised by the legislation, thus pushing the industry back some thirty years as product pushers regain credibility. Consumers will be unable to identify clearly and unequivocally on whose behalf an adviser is acting and in response, FINANZ will mount a significant publicity campaign to inform New Zealanders that only Financial Advisers, independent of any contractual obligations to product providers, can truly address the public's interests and act objectively on behalf of consumers.

3. The industry associations will take it upon themselves - and on behalf of their members - to challenge the standard of industry analysis published by all sources. In response, the Government will require that all parties producing research on the financial services industry adhere to the principles stated in the "Governments Expectations for Good Regulatory Practice" April 2017 document and demand robust analysis be provided in support of future recommendations. These principles will be applied to media, regulators, industry, and consumer bodies.

4. In the risk product space, the non-cancellable income protection product will come under widespread pressure and the sustainability of the existing product design will be challenged. This will be driven by negative claims experience hitting reinsurance reserves and capital adequacy in Australia with the inevitable flow-on effect to the New Zealand market. A modified more affordable and more accessible version of income protection will emerge and be widely adopted by (independent) financial advisers as a viable solution to client loss of income risk. Nominated Representatives will do as they're told.