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.

It does raise the question whether FAPs will be adequately capitalised. 

Don't be surprised if at least one of the existing dealer groups decides to close up shop. One has already gone. 

3. Other advisers maybe chucked out

While a lot of the focus at the moment is on going regulatory changes and getting businesses through the licensing regime, not enough advisers are focussed on the commercial risks in the new FSLAA world. In this world product providers, particularly life insurance companies, are going to be checking the quality of advice being given on their products.

If you want to understand his better watch the GRTV interview with Partners Life managing director Naomi Ballantyne.

They will be doing this as the regulators breathe down their necks with well worn mantras already. Customers best interests; Show use don't tell us. The message is simply "we're not going to tell you what to do, but you bloody well better get it right."

Pity the poor suckers who are first targeted as scalps.

4. Banks exit the advice game

It's already happening; even though banks deny it. The days of building up teams of advisers to help customers with their wealth management are over (for now). Following the Royal Commission in Australian banks aren't remotely interested in the additional risk of advice; nor the potential for brand damage. Perhaps the most telling comments  came from Westpac chief executive Brian Hartzer last year:

He said more compliance costs raises the costs of advice businesses and makes them more challenging. "The incremental focus on record keeping and compliance and so forth around financial planning, for example, was definitely challenging the economics of that business."

This exit may even extend to the mortgage market. Maybe this will be the year mortgage advisers will account for 50% of home loan originations?

It's good news for independent financial advisers as there will be well-trained people looking for a new home.

It also helps end that dreaded vertical integration. (Ironically some of the KiwiSaver providers are moving down that track and building up their advice teams).

5. Investment markets will do what they do best

I'm not silly enough to make a prediction about markets. Markets will go up; markets will go down. Especially when you guys like Donald, Boris, Vladimir are running the world and the Middle East simmers. We're lucky down here, and the choice between Jacinda and Simon isn't too bad compared to what voters in other countries have had to choose from.

What are your predictions? Post them in the comments section below.