Editorial

This year has a few knowns. But I suspect many unknowns and unexpected twists and turns will emerge as we journey towards Christmas 2021.

An easy known is what happens next month. A new regime for financial advisers. Hopefully, everyone is prepared for what lies ahead but I have a sneaking suspicion that as the year goes on advisers will change their minds and be reconsidering their business.

Advisers are being lulled into this idea that the new regulatory regime will be pretty straightforward. Over time it is likely to get more complicated and burdensome thanks to the regulators and conditions imposed by product providers and the likes of professional indemnity insurers – we have seen that already.

The worry is good advisers will leave (many have already) and advice will get more and more homogenised.

While adviser firms may get together it will be interesting to see who emerges as the true voice of financial advice. It seems like the Financial Services Council is gradually inching its way into the territory of Financial Advice NZ.

Investment advisers face a unique challenge at the moment. Where do they find income and how do they build portfolios in the world of low-interest rates and ballooning asset prices.

I'd suggest modern portfolio theory does not work in this environment.

For risk advisers, it seems their challenge will be keeping life companies happy around their advice process and conduct.

These are only a few issues of what lies ahead. Suffice to say 2021 is going to be interesting.

Philip Macalister Publisher