In a statement on its website, the government body said that all advisers authorised prior to 31 December 2018 will be required to pass an exam testing their competency before 1 January 2021, with all new entrants and those returning to the industry after 1 January 2019 being required to complete the exam upon completion of their studies.
The FASEA proposal also outlines five “competency areas” on which the exam will be used to test advisers.
These include:
- Corporations Act (emphasis on Chapter 7 – financial services and markets)
- The FASEA Code of Ethics
- Behavioural finance – client and consumer behaviour, engagement and decision making
- Financial advice construction – suitability of advice aligned to different consumer groups
- Applied ethical and professional reasoning and communication
“The guidance also proposes that the exam will have a mix of multiple choice and short answer questions. Advisers will be given up to two opportunities to re-sit the exam,” FASEA’s statement said.
“The Standards Authority is undertaking a procurement process with specialist service providers around the development and delivery of the exam and will provide an update on this process in the coming months.”
The full proposal can be viewed on the FASEA website here, and feedback on any aspect of the proposed examination can be made prior to 5pm on 31 July.
“The Standards Authority would like to advise that the remaining standards will be released in the coming weeks,” the statement added.
Again!!! Unbelievable!!! An article where only “advisers” are talked about. Where on earth is anyone, except the wonderful Jeremy Wright here in the comments, talking about the distinction and separate qualification for RISK ADVISERS. Again for these industry entities: **RRIISSKK** advisers. Is double capitals and a few asterix saying it loudly enough for these ‘entities’ to hear?
.
We DO NOT need the same quals as “advisers” – we do a totally different thing for a client. Different discipline!! When on God’s blue and green earth will these regulators – FASEA, FPA, ASIC et al get it through their thick self interested heads?! WHERE ARE THE LIFE COMPANIES IN THIS CONVERSATION ? One would think it a no-brainer that they would be involved – at the forefront in fact – CRICKETS~~!!
they are going to slaughter us. god help us farewell muchachos
This has all become one very large sad joke. The main problem with the industry has been solely based around incentivisation and advice and vertically integrated models encouraging SOME to do the wrong thing by clients. Thinking that making existing advisers sit a competency exam and then upgrading qualification after passing this exam is completely naïve, blindsighted and cleary ignores the source of the issue. Plus is it has the ability to contravene sections of the Trade Practices Act whereby a change to legislation by the government applied retrospectively creates a detrimental impact on a business’s ability to trade. In this case, certain good planners may be forced to shut up shop because they fail the exam on a technicality or their business fails because they have to take time out to complete a degree. This situation is this, we already have a regulator, albeit one that has been asleep at the wheel. Equip, fund them appropriately and let them regulate what already is a heavily regulated industry and provide sufficient penalties as a deterrent. Based upon the proposed and stated desired outcomes of Kelly O’Dwyer and FASEA, I would now be questioning the need for ASIC with regard to financial planning. They have both stated that education is the way to fix the advice sector , so we can all take comfort in the fact that once this is all over, there will be no further issues or clients losing money due to poor advice or market events going forward……..Those that believe that need a massive reality check. Time to make some noise on the complete idiocrasy of this narrow minded, politically motivated JOKE!
So the draft guidance says that the new exam will be scaled, because there may be variances in different versions.
Why?
I say same exam for all. No scaling. Allowances for genuine mishaps or medical issues.
How complicated do these people make things?
You have to have different versions over time lest you the re-emergence of Macquarie’s Penske file?!
Breaking News
Australian Super to buy 100% of Kaplan Education Pty Ltd in joint venture with Macquarie Private Equity Fund. Leading politicians presented with offer to invest in seed capital.
and that right there is probably closer to the truth in aspect then most care to look into
AustralianSuper will have their own worries at the RC. Google “Jack McGougan” from AustralianSuper and “Brian Daley” from Hostplus for more detail.
August 6, lock it in.
[quote=Anonymous]Ones with our history, with consistent ongoing issues even now.
Pre-FOFA experience is worth little. Thats sales experience, not financial planning experience.[/quote]
have not seen anyone doing this to tradies, are they not professionals who from most of my dealings have zero ethical standards and love to over charge for everything.
I did a business degree in financial planning, full DFP & have maintained my CFP, whilst exceeding every CPD requirement thrown at me. Never had a client complaint & always passed comprehensive audits. I’m seriously considering walking away completely. Our regulator left the bad apples & it’s ruined the whole lot of us. Quality Advisers, their staff & clients are collateral damage in the regulators efforts to cover up their past 15 years of gross incompetence.
As a good planner, you yourself will have a good IP policy that will pay you to age 65 with increasing claims and a super component.
Kill 2 birds with one stone, if you happen to fail the test watch your business go down the drain, Don’t worry as you have stress leave to claim on until retirement.
I believe there will be mass IP claims under mental health conditions from Financial Advisers increasing over the next few years!
[quote=Anonymous]Over Complicated O’Dwyer at it again.
O’Dywer and FASEA need to go !!!!![/quote]
Problem is who is going to stand up for the industry. Right now everyone thinks either i will be ok or someone else will do it.
How has that worked out for us??
don’t worry the FPA and AFA will or their gullible full fee paying CFP(r) members will
ha ha
i am waiting on dante’s submission after one of his 4 F’s (world cup ) finishes and he finishes his tweeting
I think so that it is fair and equitable, maybe those in Canberra that sit in Parliament should be made to sit an examination to prove their competency and understanding of matters they legislate on that affect peoples lives and livelihoods. Then, once they have passed the exam, they should be required to go and complete a degree in the related field they are wanting to change or legislate. Sound fair? This really highlights the bigger problem that consumers face…….politicians!
** RONCHI’s One Little Nugget** – FASEA Special EDITION
‘RETURNING ADVISER’ – what does that ACTUALLY MEAN? Is there a difference between a “Returning Adviser” & an “EXISTING Adviser” as defined under Section 1546A of the CORPORATIONS ACT?
FASEA’s ANNOUNCEMENT yesterday mentions “Returning Advisers” as those who “Previously held registration as a Financial Adviser in Australia and are now intending to return to practice after more than 5 years without practicing,” Returning Advisers are “eligible to sit the examination” meaning they are not required to meet the ‘approved qualification’ hurdle.
Does this mean “Returning Adviser” = “Existing Adviser” under Section 1546A of the CORPORATIONS ACT which states an “existing (adviser)”:
(i) is a (existing adviser) at any time between 1 January 2016 and 1 January 2019 ; and
(ii) is not banned, disqualified or suspended…
If so, is there a POTENTIAL CONFLICT between the s1546A definition (anyone who was an Authorised Representative in the 3 YEAR period between 2016 to 2018)
&
yesterday’s announcement of anyone who has “Previously held registration as a Financial Adviser in Australia and are now intending to return to practice after more than 5 years without practicing,”
Any thoughts?
** RONCHI’s One Little Nugget** – FASEA Special EDITION
New Entrants/Returning Adviser – the mechanics of being Registered.
FASEA has proposed that NEW ADVISERS OR ‘Returning to the Industry’ (those added to the ASIC Financial Advisers Register on or after 1st January 2019) must adhere to the following process (in THIS ORDER):
1. Have COMPLETED an approved qualification and intend to be registered as a ‘provisional relevant provider’ after 1 January 2019
THEN
2. Sit & Pass the National Exam with questions designed to test the application of financial adviser knowledge appropriate for candidates at AQF 7 level of reasoning.
& THEN
3. Commence their Professional Year (as a ‘provisional relevant provider’… this is fancy talk for Financial Planner/Adviser). 🙂
Why couldn’t the National Exam be completed as someone was completing ‘an approved qualification’? Why must the person wait until after Graduation/completion and only further delay the entry of quality candidates in to the industry? The outcome of being able to concurrently sit the Exam would be the same and may save someone 3 months or more in terms of becoming authorised.
Any thoughts?
Submit to FASEA then.
you mean FARSEA ?
Agree Joel. Plus the fact the exam is proposed to be scheduled quarterly meaning it could be 6 months before a “new” adviser gets an opportunity to sit. Further, how is a “new” adviser (aka Uni graduate) with little or no work experience meant to “apply ethical and professional reasoning and communication” (exam knowledge area 5) with no previous professional employment context?
Maybe an ethical question could be:
“Ronald works in the kitchen of a fast food chain. He accidentally drops a frozen meat patty on the ground. It’s the middle of lunchtime and there are long queues. Does he:
1. Pick up the patty, place it in the bin & get a new meat patty
2. Pick up the patty and place it on the grill (as it was frozen it shouldn’t matter anyway)
3. Employ the 3 second rule i.e. if it was on the ground for less than 3 seconds its OK
4. Any of the above
How many students go straight to an adviser role? I would think most work their way up through CSO or paraplanning roles, the exam timing shouldn’t be an issue in this case
NO COMMENT!
How many industries do you have to do this crap in after 30 years experience?
Ones with our history, with consistent ongoing issues even now.
Pre-FOFA experience is worth little. Thats sales experience, not financial planning experience.
Do you have your head in the sand or elsewhere? The issues going on now are largely to do with vertically integrated models which have pretty much come to a grinding halt post RC. Couple this with commissions that are on the way out and you are then left with the very small number of advisers that have given and still always will give inappropriate advice. These advisers are dealt with by either being sacked by their clients, having complaints made against them and dealt with by FOS or the licensee or banned by ASIC. A VAST MAJORITY OF THESE ADVISERS ARE ALREADY EXPERIENCED AND HAVE UNIVERSITY DEGREES PLUS ARE CFP’S ETC. Applying the new rules will not stop this as human behaviour is the issue not education or technical ability. This is not an industry issue as it happens with doctors, lawyers, accountants, builders, car salesmen…this list goes on. Your last comment about sales experience shows you obviously treat your own clients with contempt and assume they are thick and have no ability to judge you from right or wrong. Pre or post FOFA nothing has changed. Financial planning is a very personal relationship that goes above facts and figures and whether or not your wall is plastered with certificates. FACT. clients will only continue to deal with a planner if they like and trust you…end of story. Clearly you must not enjoy this sort of success in business
You’re lying to yourself if you think the education requirements and exam wont cull some of the most useless advisers in the industry.
We all know some shocking DFP only dinosaur advisers. Good riddance to them.
Getting educated and passing a simple exam really isnt a big deal. Stop winging and get on with it.
[quote=Anonymous]I think the degree and the exam is going to annihilate adviser numbers. i think they will make it as hard as the CFA exams.
there were a lot of people calling for a hard exam. well there you have it[/quote]
If they make this as hard as the CFA exam, it would be a disaster. I hold the CFA (as well as a finance degree and 2 Masters degrees) and it was the hardest thing I have ever done in my life. I probably put in around 500 hours of study for each exam and still was never confident that I would get through. In the year I wrote the Level 1 exam, only 29% of people passed. Imagine if 70% of advisers failed FASEA’s exam!
i think that’s the plan though to fail most advisers
There is no chance they make it as hard as the CFA exams. Working through my CFA currently and 99% of advisers will fail.
They clearly signalled this will be a walk in the park by not making it focus on technical knowledge. This will be keeping up appearances only so the lowest common denominator can keep ruining the industry unfortunately.
i don’t think so i think it’s a way to cull 50 to 60 % of current adviser numbers. it’s gonna be hard first the degree then the exam
We should all already have had degrees a long time ago.
they are planning on a wholesale butchering oh my god they are slaughtering us
mmmm… let’s see what happens if most planners fail and the flow on effect that causes… what happens to planners business if they stumble and can’t pass (perhaps for no other reason than pressure entering into an exam that will dictate your livelihood)? Financial ruin.. but who would care.. us evil planners do no good.
Good luck to those bright eyed bushy tailed Uni Grads who have been sold the dream to enter this industry.. you won’t know what hits you.. the compliance.. the red tape.. the politics.. ASIC… or worse still… the leaches that call themselves lawyers.. hovering around the BID laws.. just waiting to pounce on the layers of Grey that are there.. waiting for the error in advice… only the strongest will survive.. if you do survive.. you will most likely thrive… it certainly is not for the faint hearted.. the left wing advocates (who really have no idea about this industry) are all over this industry like a bad rash.. calling for blood (while they sit on the Govt funded job adding no value to pretty much no-one).. Good luck and Adios!!
yep they are going to slaughter us.
I can’t see why anyone would enter this industry, like you said. There are better prospects out there for employment now.
EVERYBODY SHOULD KNOW THIS
Pass that exam by 2021 which covers the so called bridging courses. AND then go back and do the courses by 2024.
That exam – if passed well SHOULD substitute as a challenge exam- no need to do the catchup courses. most uni’s accept challenge exams.
Seriously a reversed time table in play at present- pass the exam and then do the courses.
Do the bridging courses before 2021 and then do the exam. There, solved your problem for you. Where do I send the invoice?
Yep sure buddy, you got 360 spare work hours (9 full weeks) in 1 or at best 2 years by the time courses are developed. Either you don’t work, don’t have a family, don’t have a life or all of the above.
Completely possible. If ‘experienced’ advisers are as capable as they say, it takes only a fraction of those hours because you already know the course work.
If you know your stuff you dont have anything to worry about.
Yep regardless of having B.Econ, Full DFP, SMSF Specialist and Financial Advice Estate Planning Specialist, 20 years Advice experience, 20 years CPD, etc i have to do 3 bridging courses being FASEA Ethics, Behavioural Finance and Corps Act (Chap 7).
And yeh i have to pass an exam on these subjects before they make me do the courses.
FASEA & O’Dwyer you really could not be more utterly bloody stupid in your processes and procedures.
Seriously, slap all yourselves around the head, pull your heads out of you stupid butts and start making some sense.
FASEA and ODwyer utterly unbelievable.
Love that response! Yes the whole thing is becoming a joke.
Knee jerk reactions as a result of those behaving badly which I would think is the minority. But certainly not related to size as we have seen with mainly the big institutions at fault.
If you can afford to retire, sell and get out while the going is well, not good but before it gets worse!
I did it and have never been happier.
Im ready to hang up my hat. Done 29 years, CFP etc etc. Time to care for my on family now that there is no appreciation for great work over many years.
I can’t help but think this goes against any duty of care towards people in the industry as a whole.
Remember there is more then just advisers or potential advisers who are going to be dramatically effected by this. Stop for a minute and think of all the support staff across the country who soon to could be potentially trying to find new jobs.
Good on you Tom Cat……..
The industry has lost the plot maybe the Government can set up similar exams for Accountants, Solicitors , train and bus drivers , cleaners etc
Question 7. Your the Head of School & you’ve just come back from China after a week of trying to get new students enrolments. Your jet lagged, five of your academics have been retrenched, you’re stomach is upset due to eating unfamiliar overseas food, and your trip to China was not that successful. The Government in China also on the weekend removed several Australian Universities from their education agreements as did the Australian Government in order to get back into Surplus. As part of your new role on FASEA to decide what a Degree is… Do you.
a) Ban all types of Private education. such as CFP courses and CPD.
b) Make it compulsory to study your course.
C) Not recognise broad finance degrees allowing you to sell even more courses.
d) All of the above.
Here is Part A of the exam for anyone interested in getting a head start.
Part A is on Ethics and is worth 50 marks. You must select one (1) of the following three (3) questions.
Please note if you’re reading this in our Beijing School and paid full fees up front you have seven attempts at this section. You have 120 minutes.
[b]Question 1:[/b] Joe sits on the board of FASEA. Joe also sits on the board of Griffith University. His salary and job is dependent on student enrollments. Due to TV renovation shows, everyone wants to go to TAFE and be a sexy tradie and not Uni, his job is now on the line. The Dean as an incentive, has offered to name a lecture theatre after Joe, if he can increase student enrolments. Joe knows FASEA is a monumental step for the financial planning. Joe knows in order for this move to be a success advisers need to be united and therefore any perceived and or potential conflicts of interest should be removed. Should Joe resign or go for the Lecture theatre name? Discuss. 10 marks.
[b]Question 2)[/b] Joe gets a volume rebate from BT Funds Management due to him placing more money into BT. In 2013 this ceases because it’s seen to be a conflict. Explain & Discuss the difference between a Volume rebate and Joe selling his text books and courses written for compulsory Financial planning subjects all at the elementary level for 18 year old Chinese students . 10 marks.
[b]Question 3 ) [/b]You’re school is broke and recently wrote 3 more subjects in the Bachelor of Commerce program and called it a Bachelor of Financial Planning. You now sit on FASEA and you’re head of the school. As part of your role with FASEA you decided to make Financial Planners study a brand NEW Financial Planning degree. Is this just smart advertising or a conflict? 10 marks.
What is the point of having behavioural finance, ethics and the Corps Act in the exam when we already have to study these as part of the FASEA bridging courses? Why are we doubling up on the same things?
Surely in those subjects most of us will have to do we’ll already be sitting exams on those exact same topics?
Correct, that should be covered off in study and the exam should be based on actually proving you are good enough to advise people on their money… Technical focus like the BAR for law etc. This exam is a waste of time…
Ethics ‘exams’ go a little like this, making them entirely pointless.
1. Should you defraud clients of their money?
a) Yes
b) No
Depending on your existing level of education qualifications, you saw would be able to do the bridging courses before you take the exam.
But if all u hold is a DFP then maybe you are in for a longer road, which is appropriate in my view. Too easy for too long to be a financial planner.
So lets see, we have to complete a FASEA code of ethics module as part of being able to remain in the system. During our studies, well my masters anyway, we get tested on behavioural investing, investment construction, markets and the Corps act. Now we have to complete and exam that covers the FASEA ethics component, and all the stuff we studied while bringing our education up to scratch. If this wasn’t so serious, I would think its a joke…. Bloody bureaucrats.
I’ve seen the first questions. Q1 Ethics. A conflict of interest is?
a) writing text books and making them recommended reading in a course made compulsory by law.
b) making it compuslory to study a Bachelor of Financial Planning when you sit on the FASEA board and also being in a paid position at Griffith Uni.
c) Working at Griffith University, sitting on FASEA and offering your course as the solution.
D) Making it be that only a handful of Universities can offer Financial Planning courses and then making it compulsory to study a Bachlor of Financial Planning.
E) All of the above
F) None of the above.
E
You pass!!!!
Toooooooooooooo funny!!
Why is this not an online supervised exam? Surely we have the technology? This exam format will be dated almost as soon as it is rolled out.
The overheads of venue hire and marking paper based exams will be massive as well which will only hurt adviser’s pockets!
Every time I see the word FASEA I want to kick someone in the goolies. But I don’t.. cause the fight has gone out of me.
yep… join the club. The bureaucrats are licking their lips.. more needless paperwork to keep them in a job.. Australia the luck country.. time to work for the golden goose in Canberra!!!
RIP financial planning industry from 2019
RIP since 2012
[url=http://https://i.imgflip.com/2dsdtf.jpg][/url]
Why would anyone bother… what happens to your business if you fail…financial ruin. Me O’Dwyer you will be remembered.
Over Complicated O’Dwyer at it again.
O’Dywer and FASEA need to go !!!!!
This is insane. I completed a Masters in Financial Planning in 2016 which included a research paper. Core subjects included behavioural finance with deep overviews of client and consumer behaviour. Financial advice construction and all of the above was inclusive except for FASEA’s interpretation of ethics which obviously will be lifted from CFP and other related ethical standards.
I would suggest that FASEA arrange for any study material to be made as soon as possible. Who do you believe will be paying for pleasure, again?
Pretty sure you will be if you go through the proposal from their site
Anton. Correct post nominal is MFinPlan not MFP.
Sounds like the old DFP-1 with a little more Behavioural Finance psychology and ethics reminders thrown in.
I still wonder what is the point of a one-off exam? Fair enough if this was something that we had to sit every two years to demonstrate technical competence (as ridiculous as that would be), but as a one-off? What’s the point? What does it really achieve in the long run? Besides the political gain of course – “let’s make those nasty adviser pay for what they’ve done!”
The objective is to cull somewhere between 30% & 70% on the industry
This seems like a reasonable requirement in principle at least. I’m hoping that they will release some educational aids that advisors will be able to study up on. Sample exams and firm knowledge area requirements will be beneficial. Are the 2 re-sits lifetime? Once you fail 3 times does that mean your are out for life? also I wonder how high they will set the bar when it comes to pass rates? Early days in the process.
Alll the proposed pass marks are in the proposal, funny enough their ethics course is at 75% pass mark
The two sittings seems rough, unless you have the AQF8 units sorted recently, and are fresh in the mind etc. The AQF8 standard exams don’t let you harp on about life experience, it’s all pretty much references and citations, and statistics. Checkout the youtube videos on CFA “Constructed Responses”,
Check out the CFA Level 3 – materials for behavioral finance for revision materials.
It’s going to be the short answers which will kill off a lot of highly experience advisers. Hopefully Kaplan does up a preparation / refresher kit etc.
I think the degree and the exam is going to annihilate adviser numbers. i think they will make it as hard as the CFA exams.
there were a lot of people calling for a hard exam. well there you have it
See my practice questions supplied.
Ahhhh… Very little on technical competency… Whats the point?
This is hardly going to raise the bar. Ethics is common sense, the unethical know what the right answers are but choose not to act on it.
On the other hand not everyone is technically competent, which is what the exam should focus on. You want to raise the bar, make sure everyone has sufficient knowledge to do their job. Too many in the industry that dont understand taxation, asset allocation, basic superannuation strategies etc. They’ll pass this exam and keep providing bad advice.
IMO they should lighten up on the education standards accepting a far wider array of degrees (I already meet what is proposed) and make this exam closed book in a classroom where advisers cant just get their para-planner to do it. That will really prove, education or not, who is capable of doing their job as a ‘finance professional’. It will also show how much ‘experience’ means compared to ‘education’.
I agree. any degree is fine, we need lateral thinkers from every discipline to enter the profession, just add a bridging course to top off on the basics of finance, and then sit a hard exam that tests whether or not you are competent technically like the CFA as an example
I understand what you ar saying re Paraplanner but it isn’t a memory game… As long as I know where to look up the answer and get back to a client, I don’t need to do it off the top of my head…
We should all know the answers to the basics off the top of ours heads and not need to rely on paraplanners to hold our hands.
If you need to go and look up answers to everything, what is the client paying you for if they can do that themselves…
Seriously…
The right outcome for clients is based on research (looking things up), this is not a di*k swinging contest.
If I have to do the exam, why do I have to go and complete a degree as well when I’ve already completed a diploma which was the highest available education at that time and became CFP……. Isn’t that doubling up and should it be one or the other? I thought CPD was what I had to do for all these years to keep up. This is the only industry I have ever heard of that has got away with this.
Because I actually once saw a toddler complete the DFP before being able to walk.
A DFP isnt the education level of a professional. Ongoing CPD is also a complete and utter joke where most just attend lunches or get their paraplanner to complete their ’40 hours’ of Kaplan ontrack in 1 hour each year.
it’s true the cpd is an utter joke, i am trying to see if the system will let me do 300 points i’ll come back to you in 12 months last year i got to “135 Hours” of CPD
No pressure… pass exam to keep your livelihood. What is pass Mark? As long as it is fair and reasonable.. hopefully not an exam written by an academic with double negatives and the like.
Short answer and a paper based exam? This is absolutely ridiculous, the costs for this whole ordeal are going to be huge and those in regional areas are going to be severely disadvantaged! Now advisers have to fork out for people (as opposed to machines) to mark the exam, security at the venue and also the venue hire.
Logistically this just doesn’t make sense
Katty – Sounds so reasonable that we should make similar exams mandatory for all politicians, unions, ASIC staff…
Don’t be silly… unionists… politicians.. they are honest hardworking citizens of our great country… Sorry just got a robo call talking about medicare..
[quote]FASEA may publish a recommended reading list to guide candidates preparing for the examination on
the FASEA website. The reading list is recommended but not mandatory and there are many publicly
available resources that complement those in the list.
FASEA does not intend to provide examination preparation courses.
Candidates preparing for the examination should use their judgement about how to prepare and consult
their supervisor in designing a plan of study based on the curriculum. [/quote]
Seeing as the topics seem quite broad this worries me.
A convenient reading list being a text book costing $150 + written by several academics that also happen to sit on the FASEA board. convenient isn’t it. Financial Planning in Australia by Sharon Taylor et al
Doesn’t surprise me… our industry has been hijacked by acadaemia..
Looks more like compliance training…extra punishment for us bad people. I think management should sit the exam with us.
Sounds reasonable
I’m sure you will hear from plenty of people who dont think so. But then it wouldnt matter what they said was in or out, there’d still be plenty of whingers
The time factors whilst juggling work and family obligations is going to wipe people out. No work no pay for sole practitioners.
Mate, i finished my degree while working full-time with two kids under 5. If u want it, you will make it happen. If u bitch and moan about it, u wont. Simple.
Me too, Jimmy. Congrats on not spending years complaining and just getting on with it. It feels good now!