Speaking at the ifa’s inaugural Future Forum last week, Dr Jeffrey Scott, head of advice strategy at MetLife Australia, addressed the FASEA hurdle by drawing on his own personal experience with the exam.
Noting that while he did successfully pass the exam, the trials and tribulations for most, including his colleagues, are real.
“Asking advisers who have been in the industry for years to sit a three-hour university-style examination, when they haven’t sat an exam since high school, I think is ridiculous,” said Dr Scott during a panel discussion examining the sustainability of the advice industry.
“Recognition of prior learning from an education point of view says we should take into consideration what the person has done previously and if they have no problems with their ASIC stuff and they’ve kept up with their CPD points, they’re doing all their education, then why do they have to sit the exam as well?”
“That’s why MetLife has been helping advisers prepare for the exam by providing webinars and training sessions,” Dr Scott explained.
Joining him on the panel, Peter Johnston, the executive director of the Association of Independently Owned Financial Professionals, spoke of an alternative for advisers unwilling or unable to face the FASEA hurdle.
“Those who have been in the industry for a while and don’t want to sit the FASEA exam, who don’t want to have a degree, they can put someone in their business to look after their existing clients,” Mr Johnston said.
But there are details advisers need to keep an eye on.
“If you’ve been an adviser for your cohort of clients, you can’t suddenly become a general practitioner because you already know their secrets, so you’ve got to cut it off and put someone in there to deal with your existing client base,” Mr Johnston said.
“Then you can just run your practice and deal with new clients coming through the door, do the marketing, give them some general advice and then hand them over to your adviser. So that’s what a lot of the older advisers are currently setting up.”
Last month, FASEA revealed the pass rate among advisers listed on ASIC’s Financial Adviser Register (FAR) stood at 76 per cent at the end of September, meaning 14,630 advisers on the FAR were successful in overcoming the FASEA hurdle.
However, as many as 24 per cent of FAR-listed advisers have yet to do so.
According to FASEA, overall, 88.5 per cent of advisers who have sat the exam have passed, or 16,850 in total.
How is it that according to FASEA 88.5% of advisers who have sat the exam have passed?
Last I checked, for July and Sep 2021, about 40% of those who sat the exam did not pass.
I have passed, but there seems to be some chicanery in FASEA’s headline numbers.
The sad thing about all this FARCIA rubbish is that risk will now be sold under General Advice and clients will not have any of the consumer protections provided under the personal advice process. Insurance salesmen can do a 2 hour exam and then sell these products without any training and minimal compliance. These sales people will be able to change their clients’ policies from proper insurance policies, tailored to the clients’ needs, with great benefits to rubbish junk policies (just to collect a commission) without having to compare policies or act in the best interests of the consumer and what is worse is that ASIC THINKS THIS IS OK.
The ombudsman is about to get very busy.
They don’t even need to spend 2 hours. The ombudsman has no say in anything if you aren’t licensed and have the correct paperwork.
Hopefully Jeff is directing his comments to the government, you know the ones who actually legislated that ALL advisers must sit an exam & that ALL advisers must meet the requirements to have a Degree or equivalent….
I note through reading many articles that FARCE-IA does not drill down and explain their 88.5% (16,850) advisers that have supposedly “passed” the irrelevant, industry-damaging farce of an exam. I suspect strongly, based on pertinent info from other reliable sources that this number is wildly exaggerated. Finite analysis and surveys among the cognoscenti clearly show the number of existing adviser closer to 13,000 with that ignominious figure to drop to near 5,000 come the later part of 2025. Stratistics, as we all know, can be made to say anything we wish. Govt has this down to the finest of art forms. The number of pure risk advisers [i](as opposed to investment advisers/full financial planners)[/i] will be almost non existent. I’m not making this stuff up, it all comes to you complements of politicians who simply wish to appear relevant and valuable on an ongoing basis. it is simply obscene.