Insights from the FSC State of the Sector 2026 Report – March 2026 

New Zealand’s financial services sector is entering one of its most dynamic growth periods in a generation. The Financial Services Council’s State of the Sector 2026 report, published in February 2026 in partnership with KPMG, paints a compelling picture: a sector that is growing in size, sophistication and relevance to everyday New Zealanders – and one where Financial Advice Providers are uniquely positioned to capture significant growth over the next five years. 

The report highlights strong momentum across the sector. It states that KiwiSaver funds under management now exceed $140 billion and total managed funds have reached $363 billion. It also notes that the sector contributes more than $16 billion to GDP and has delivered sustained productivity growth in recent years.  

Beyond the headline figures, the report highlights several underlying trends shaping the sector’s growth. These trends point to clear opportunities for FAPs over the coming years. In this article, we explore those opportunities and offer insight into how advice businesses can best position themselves to take advantage of them. 

1. Investment assets are growing in scale and importance 

The report shows that financial assets are forming an increasingly significant share of household wealth. KiwiSaver and managed funds continue to grow, reflecting a shift toward investment-based wealth rather than reliance on traditional savings.  

As investment balances grow and represent a larger portion of household financial outcomes, decisions about asset allocation, risk and long-term strategy become more consequential. 

Opportunity: Supporting clients to make informed investment decisions as their wealth becomes increasingly market based. 

2. KiwiSaver’s maturity is increasing decision complexity 

The report describes KiwiSaver as the primary investment vehicle for most New Zealanders, with membership reaching around 3.4 million people and contribution rates expected to rise.  

As the system matures, more members are moving from accumulation to retirement planning.  

This shift from saving to decision-making changes the nature of advice conversations and increases the complexity of retirement planning. 

Opportunity: Providing structured retirement planning and decumulation advice as KiwiSaver balances mature. 

3. Insurance gaps remain 

The report highlights that New Zealand remains underinsured relative to many comparable countries, despite billions of dollars in life and health claims paid each year.  

This gap between risk exposure and protection represents a significant area where advisers can add value through structured reviews and client education. 

Opportunity: Helping clients close protection gaps through proactive insurance reviews and risk planning. 

4. A more professionalised and consolidated market 

The report notes that the number of licensed FAPs has reduced since 2021, reflecting a more consolidated and regulated market.  

As the sector matures, well-structured advice businesses with strong systems, governance and capability are likely to be better positioned to grow. 

Opportunity: Strengthening systems, governance and capability to stand out in a more professionalised market. 

Turning opportunity into growth 

Taken together, the report’s findings point to expanding asset pools, increasing reliance on investment markets and ongoing advice gaps in retirement and protection planning. 

In our view, these trends represent meaningful opportunities for advice businesses. The real differentiator, however, will be capacity. Many advice businesses are already operating at full stretch, with compliance, CPD and operational demands competing for attention. 

FAPs that can create space to focus on clients and growth initiatives are likely to see the greatest benefit from the sector’s momentum. 

One practical way to create that space is to consider which functions need to sit inside the business and which can be supported externally. Outsourcing specialist areas such as compliance support, CPD planning and adviser education can reduce internal pressure and allow FAP owners and advisers to concentrate on client relationships and growth initiatives. 

How Strategi can help 

Strategi is an outsourcing provider of compliance, CPD and adviser education services to FAPs across New Zealand. Many advice businesses trust us to take responsibility for these specialist functions, enabling them to reduce internal pressure and focus their time and energy on clients, strategy and growth. 

The FSC report highlights significant growth opportunities for advice businesses over the next five years, and now is the time to ensure your FAP is positioned to capture them. If you would like to explore how outsourcing these functions could support your growth plans, we would welcome a conversation. Give us a call today. 

Download the report