Australian Advisory’s “Financial advisers need more options” paper noted that, despite ongoing discussion within the industry about the relevancy of the exam, educational requirements are not the main area of concern for financial advisers.
The paper included findings from a survey undertaken in August by 160 specialists in the financial services industry which said that just 14 per cent were concerned about educational requirements behind compliance, which was the biggest area of concern (42 per cent).
Australian Advisory said the FASEA exam and qualifications post-2026 were specifically noted by the respondents.
“Perhaps as the FASEA higher education requirements are still four years away, they did not appear to be as front-of-mind,” the paper read.
“While still seriously important, the current ASIC compliance requirements have taken precedence over the pressures of their FUTURE educational requirements.”
The paper added that comments about educational requirements were typically about passing or having to resit the FASEA exam.
It comes after Lifespan Financial Planning head Eugene Ardino said the exam is creating “self-doubt” for advisers who have struggled to pass the test during a recent episode of the ifa Show.
“An exam that quite frankly, in many cases, doesn’t have a lot to do with giving advice, a lot of it’s very academic,” Mr Ardino said.
“I did the exam and, my goodness, I was lucky enough to pass and partly it’s because I live and breathe at a licensee level, but I left there scratching my head thinking, ‘Where are these questions coming from?’”
Listen to the full podcast here.
Earlier this month, draft exposure regulations of the incoming Better Advice Bill noted that the FASEA exam fee would increase to $948 (currently $540) while an additional $218 fee would apply for the corporate regulator to “review the marking of one or more answers to the written-style responses (non-multiple-choice questions) in an exam”.
Speaking to ifa, AFA general manager Phil Anderson said that the industry body has been concerned about a potential fee increase.
“We had feared that there would be an increase in the cost of the exam in 2022, as a result of the reduction in the number of advisers who will be sitting it,” Mr Anderson said.
“We are, however, concerned by the scale of this increase from $540 (plus GST) to $948. That is a very significant increase.”
As an example of how farcical this whole issue has become – in the Kaplan CPD unit on “informed Consent” – it is suggested by one of the “industry expert consultants” that Kaplan use – that, because SOAs have become so large, convoluted and unintelligible – that we (Advisers) might like to consider preparing a “mini SOA” that sort of summaries what we are trying to say in the “real SOA” and that we might stand more chance of proving that we obtained “informed consent” – by presenting this to our prospective client.
Now this suggestion raises so many questions / issues – ie which SOA is the legally binding one?, do we need to show the client both? etc etc etc – that I am actually staggered that this is seen as a viable solution.
Unfortunately, I am not making this up.
Yet ASIC are still very comfortable having vertically integrated product manufacturers owning Dealer Groups and apparently meeting the BID etc, whilst effectively all the ARs and CARs in the Dealer Group recommend one product.
Astounding!
As an Adviser who has only been in the industry 7 years I still cannot wrap my head around how quickly this industry has been decimated by such unnecessary compliance before my eyes. Where are the similar regulatory requirements when purchasing a property, car or health insurance just to name a few??? The average yearly phone/ internet contract can be more expensive than an Insurance premium. Individuals at some level need to take responsibility for their own decisions when making investment and product purchases. Tell me how industry funds can be excused at what seems to be most regulatory levels for providing ‘default’ Insurance and Investment options to every member. What’s the incentive to work in this industry any longer further when I might as well just do a three day online real estate agents course and get paid 3% from any property sale in a booming property market. God help the healthcare system when the majority of the population who are underinsured seek government handouts resulting from the mass adviser exodus.
Absolutely correct and this is what the vast majority of us have been saying for YEARS! Including our clients who are just as sick of it too! At some point people need to take responsibility for their own actions and decisions yet it is all getting dumped on US. Unfortunately though IT IS WHAT IT IS and none of it is going to be wound back. Bottom line that none of the politicians and regulators get is that it has actually INCREASED the cost of Advice.
Thank goodness I have a life boat and am just about to leave this sinking ship industry! The Liberal government should look out when advisers and their clients next get to vote! Educate yourselves on how to vote below the line and send Frydenberg and his political mates a message.
The real professionals in this industry will be rubbing their hands together when they read a lot of these comments because they know they have no competition for quality informed clients. Seriously people just get on with improving your businesses to meet the new environment rather than moaning.
Who cares about qualifications in 4 years when you are too scared to do anything now. Realistically the 10 advisers left in 2026 will be really well qualified but busy.
The FASEA exam and this ethics requirements would never have been an issue if the entry requirements to this field had been established at an appropriate level 20 yrs ago.
The compliance and regulatory demands are lunacy.
This is driven by the simpleton mindset that risk can be regulated away and more and more compliance will solve life’s problems. There is more oversight and documentation applied to us when changing a person’s superannuation than is applied or provided to clients when having major brain, heart or back surgery. That can kill you but changing your super will not.
you’re correct and those Advisers impacted now could have simply completed an Advanced Certificate of Insurance in 2 hours, five years ago (when the stories comparing advisers to hairdressers came out) but the majority said they didn’t want to be professional and had more learnings from the school of reality ….so sucked into them….because those that are now left are the ones drowning in red tape and they’ve helped create an environment where 80% of people cannot get advice..what a legacy they left…..and they continue to complain and want FASEA exemptions.
ASIC compliance and ASIC costs (ASIC Levy , COSL) are by far the biggest concerns.
Of course, ASIC isn’t to be blamed for this; the federal Liberal government must take sole responsibility. What lunatic thinks it a good idea to allow a bureaucracy to recoup their running costs from the people they are policing? What lunatic thinks DDO is going to be of any benefit to consumers?
Josh Frydenberg.
100% – the sheer uncertainty of ASIC and compliance requirements is a nightmare. At best it is non-commercial, at worst it is a real reason to exit