The ASIC chair has conceded there is “not a lot” the corporate regulator can do regarding concerns with the financial adviser exam.
The relevance of the exam, particularly its content, has been a point of contention within the industry for some time. However speaking at the Stockbrokers and Investment Advisers Conference this week, Joe Longo said ASIC only administers the exam and has no sway in its processes.
“It’s prescribed by regulation by the Minister, we just administer it. In fact, I think it’s been administered 17 times before we started administering it,” Mr Longo said.
“I absolutely acknowledge that there’s views… the exam just isn’t fit for purpose. I acknowledge that concern. But this really is a matter for government to deal with.
“We don’t have any say at all as to the content of the exam or what’s prescribed. We don’t have any power to modify the impact or effect of those exams.”
However, Mr Longo said that ASIC will work alongside Treasury and the incoming Albanese government should there be any changes to the exam.
“Clearly, it’s well known that these issues and concerns exist,” he said.
“Obviously, we’ll do whatever we can to work with Treasury and the government. If there’s going to be any changes, we’ll certainly be there to help.”
Mr Longo’s comments come just a week after the completion of the May sitting, while in April, ASIC confirmed that 882 advisers, who had attempted the exam at least twice before the end of 2021, have qualified for an extension until 30 September 2022.
Meanwhile, the findings from a survey looking at the mental and emotional wellbeing of financial advisers in Australia revealed that 84 per cent of the respondents said FASEA requirements have added significantly to stress levels and was rated as one of the highest causes of stress.
The survey, reported exclusively by ifa, noted that the exam is regarded as “flawed” and difficult for many to pass on their first attempt.
Among those surveyed, 62 per cent agreed that the exam should be examining specific areas of advice and only cover a specialty area, while 78 agreed that specific feedback on each question should be provided if an adviser does not pass.
Pass the exam like the rest of us, or it’s time to go. The rest of us had to pass, we did our study, gave up our time, and got it done. I have little sympathy for those that didn’t pass. Yes it was ambiguous exam. Those that wrote it were trying to trick you, but if you did the study and practice exams, you got a pass. I would not want to employ someone who failed this exam more than twice.
Hey ASIC, never your fault hey, never accept any blame, never accept any responsibility and always blame anyone else.
Hey ASIC why don’t you try administering it differently, provide fully marked, construction comments where wrong etc to those that have failed and give them a real chance to pass in the future.
ScoMo would be perfect fit at ASIC, nothing was ever his fault either.
As a professional trainer / and examiner in a former life – the construct and assessment process of this financial adviser’s exam is beyond embarrassment. Any half-decent trainer – would seek to address its shortcomings. The problems with content, moving goalposts – etc are well known and well understood by not only the advisers – but those administering the test. From all accounts, it’s all too hard to acknowledge there is an issue – and then address it. – If the incoming Govt could at least competent people (not ivory tower types) review and seriously ask themselves is this what they wanted?
From ASIC’s website….
Our vision: A fair, strong and efficient financial system for all Australians.
To realise our vision we will use all our regulatory tools to:
* change behaviours to drive good consumer and investor outcomes
* act against misconduct to maintain trust and integrity in the financial system
* promote strong and innovative development of the financial system
* help Australians to be in control of their financial lives.
Pah !
If you’re a good adviser, you’ll look at the risk-return characteristics of running an advice business in Australia and quickly decide to sell out and do something else! 10,000 planners out of 28,000 did this, and counting.
ASIC (and whoever you blame), you’re failing on your role under the ASIC Act which is to:
* maintain, facilitate and improve the performance of the financial system and entities in it
* promote confident and informed participation by investors and consumers in the financial system
* administer the law effectively and with minimal procedural requirements
* …
* take whatever action we can, and which is necessary, to enforce and give effect to the law.
I passed the exam on my first attempt that does not make me a better financial planner than others who may have failed. Since then, I have decided to be a mentor to the adviser who has taken over my practise. Who is a bright young man completing Masters in Financial Planning which may be the standard required in the future to remain as a planner.
Not surprisingly ASIC are always very quick to state “not a lot” they can do, they simply regulate and carry out the legislation, they don’t make the rules….though they consult with government and suggest strongly what those rules should be. When was the last time you ever saw a submission being made by ASIC to remove or ease the restrictive rules and legislation in the industry? Not that there’s a conflict of interest with taxpayer funded budgets possibly to explain why….
How about an exam and professional standards for employees and representatives of ASIC? I’m sure anyone who’s dealt with them would agree that ethics, knowledge, industry-specific experience, efficiency and independence are NOT high on their scorecard.
I have failed 6 times, not that I don’t know my work I can repeat the legislation off almost word verbatim. I have an alternative brain and way of thinking and failed each time on the psychometric analysis? I have been tested with experts and simply these types of ambiguous questions don’t work with me? I am very literal and also in the exams, found explicit issues with the examination process.
And that is why we recommended in the Survey report that the exam is re-structured in format to assist people who find sitting for 3.5 hour computer exam difficult and get rid of ambiguous questions.
I agree with Tommy below – i dont get the criticism and I am a 51 yo risk writer and have been authorised for over 20 years. Guys that exam is really not difficult .. in fact I would suggest no where near the intensity of a university exam at degree level – and its entirely appropriate in its scope. We need a minimum level if this industry is to become professional. There is an old saying … Age and number of years is not a person’s grey hairs,… rather understanding is …. if we want to be left along and perhaps even operate like lawyers and accountants under a fiduciary (no licensees to middle our hard earned) then lets continue what we have started .. we have come so far already
” if we want to be left along and perhaps even operate like lawyers and accountants ” who made this promise?
Exactly. It’s not that hard, and it doesn’t require specialist knowledge in any particular area of financial planning. All this talk about requiring separate exams tailored for different specialisations is an indicator of people who just don’t get what the exam is really about. That’s why they keep failing. Perhaps those who haven’t passed yet should just accept their core skills are in sales rather than professional advice. There is plenty of demand for good sales people in less professionally focused environments. Why not switch to selling something else where you will be more appreciated and better rewarded?
I find it disappointing that the Chair of ASIC cannot come up with something better. I have never seen such an appalling exam in my life.. I have taken exams and I have set exams this one is not fit for purpose and the Chair of ASIC taking such a stand is laughable. Doesn’t ASIC administer financial advisers? Isn’t it in ASIC’s best interests to ensure that those people undertaking the exam are presented with something relevant? With a failure rate of 68%, (last published figures) bearing in mind that many of these advisers have been working in the field for many years , this suggests in itself that the exam is flawed. If I set an exam or even administered an exam with such a high failure rate I would be mortified.
Time for the ASIC Chair to be responsible and support financial advisers.
By way of comparison the ATO supports tax agents. I find it strange that ASIC now it is in charge is not doing the same for financial advisers. Something is very very wrong.
No. That’s not how beuracracy works. The law sets the lanes, and the content of the exam is not in ASIC’s lane.
Didn’t ASIC consult with FASEA behind the scenes????
Is ASIC still in the lane of paying for Submissions?
The ATO is in the same boat they don’t set the exams they regulate the tax and BAS agents and provide support. Where is the backlash to tax exams where is the 68% failure rate in tax exams. ASIC needs to stand up and be counted or withdraw from the education space if they can’t
Interesting, as an industry as a whole has so many flaws currently, yet, you can not do anything about it. I still need to pass the FASEA exam and if I do a professional development year next year or not, by not doing the FASEA exam and then look at it the next year, it is not going to change anything, except not having a license. But this could be peace of mind and look at a career change anyway or stay in as admin role and consultancy work, which we do most of the time anyway.
The old Pontius Pilate Syndrome. Wash my hands & declare, ‘Its not my issue’
Correct
It is impossible to change anything now and match a fair playing field for those who had to pass the exam. I passed the trial and the main on first attempt. I can’t imagine still not having passed with so many attempts that I could have had by now. Agreed the exam is irrelevant and flawed but I was told to pass it or lose my business/career so that is what I did. ASIC – when I’ve known of corrupt advisers you’ve taken years to do the job you should of and NO I don’t want to be paying ASIC to do their job – this i resent. Imagine if accountants had to pay a levy to the ATO! Its a joke and then ASIC catch Mr X and Mrs Y – the pool of advisers decrease and I am expected to pay you more? The job is done poorly and I wouldn’t employ you guys in a hearbeat.
how about an exam for politicians and ASIC???? Bloody joke
I’m sorry but I just dont get the criticisms of the exam & the areas it looks to ‘test’ people on – Corps Law as it relates to Financial Planning, Ethics & Behavioural Finance ie why clients do what they do…
These 3 areas are common no matter if you are a generalist planner or a specialist stockbroker or risk writer.
There have been a range of support for advisers who were concerned about sitting for the test – both in studying for the content or sitting for exams. I took advantage of one and passed first time in the second exam. I dont consider myself to be any smarter then the next person in our industry, which is why I prepared & did some study.
This has been going on now for some time, the exam deadlines have been known for years & have been extended twice. Perhaps if you’ve attempted the exam & failed multiple times, perhaps this really isnt the job for you…
Tooooooooooooo Late?
They rushed this out in the face of an industry with so many flaws.
Hume simply overnight decimated a cottage industry because of the minority.
I found 16 errors to questions and answers in the exam and when tested with the FASEA team, they did not want to know about it?
ASIC are lazy and incompetent. They are always quick to tell everyone what’s not their job. One must ask outside of running advisers out of business, what is their job?
“not my job”….seems to me someone else claimed the same thing and is now out of his job….