[The Wrap] Five predictions for 2020

1. AMP will disappear

We pretty much know this once venerable backstay of the financial services industry will disappear; but the question is who will buy it and will it sold in one lot or broken up?

While there has been speculation this week Kiwibank wants to buy BNZ, don't be surprised if they end up a suitor for AMP. The other local business not to be ignored as a bidder is Fisher Funds Management, which TSB Community Trust owns.

One of the little ironies of the demise of AMP, is that the old AMP Advisers Association, now Wealthpoint, is arguably the best placed dealer group or aggregation group as advisers head into the new FAP regime.

2. Some advisers will be homeless in July

Only 54 FAP licences issued so far....and the clock is ticking. The current dealer groups, which plan to have their own FAPs, are going to be "inviting" advisers to join their groups. This means there will be a culling of some of some advisers. These FAPs are taking on significant liabilities when they become responsible for the advice given. Advisers shouldn't be complacent around the cost of joining a group. In the mortgage space we have heard the figure of $20,000 per adviser annually, and one group in the investment and financial planning space even suggested the number could be four or five times that. Their view is that risk in managing financial plans, investments, trusts and other entities is much higher than in the mortgage and insurance spaces.