A recommendation from the FPA regarding the mandatory exam has not made it into the final draft of the adviser education reform, which was introduced into Parliament on Wednesday.
In June, ifa reported that the FPA had made a submission requesting that a section of the professional standards draft be amended so that the standards-setting body is allowed to approve other assessments in place of the exam.
While the recommendation was considered, the amendment was not made, said FPA chief executive Dante De Gori.
“Part of the difficulty is not knowing what the exam is actually going to cover. That is the reason why we put [the recommendation] forward,” he told ifa yesterday.
“If there are advisers that have completed assessments that are equal to or greater than the exam, should there not be consideration to allow them to not have to sit the same exam?
“The [recommendation] was considered. It was part of the consultation process but it appears that the legislation does not allow for that, which means that everybody would be required to complete the exam.”
FPA chair Neil Kendall said he believes that the reason the recommendation was unsuccessful came down to “an issue of politics”.
“We have a very strong view that if you’ve done the CFP certification, which is at a master’s level, you shouldn’t need to do a lower level exam to prove your competence,” he told ifa.
“However, it became too messy and it simply just didn’t get through. We saw it as redundant, but unfortunately there were a lot of things muddying that water.”
Still, the exam should not be a huge concern, said FPA head of policy and government relations Ben Marshan.
“The legislation sets out that there will be an exam so it needs to cover everybody in that. So realistically, what that exam will most likely cover is compliance with the Corporations Act, which you do every day, and ethics,” he told delegates at the FPA Congress in Perth yesterday.
“We have certainly voiced our concern with the exam. But what was introduced yesterday says that the standards-setting body has to approve an exam. That exam doesn't necessarily have to be distributed by the professional standards body.
“There could be more than one exam provider, so we have flexibility that we may be able to apply and help our members through the exam process with the standards setting body.”
Another recommendation that was unsuccessful was around requiring advisers to join professional associations, Mr Kendall said.
“But what will happen is that people will need to sign up to a code of practice, and that is huge in terms that it is going to be enforced,” he said.
“That will be a big change for a number of people.”
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