Stockbrokers and Financial Advisers Association chief executive Judith Fox told ifa the failure rate across major stockbroking firms for FASEA’s November exam was extraordinarily high and demonstrated the need for different specialisations to be better recognised within the new education standards.
“It was up to 65 per cent [failure rate] across some of the different firms, because the exam had two-thirds of the questions on insurance,” Ms Fox said.
“We have protested that with FASEA and said ‘please don’t do that again’. It skewed everything in terms of the pass rate because so much of the exam was on a topic that stockbrokers just do not get involved with.”
Ms Fox said the current educational framework did not take account of the multidisciplinary nature of the advice industry and was too general in its approval of degrees as well as its construction of exam questions.
“FASEA has a view that financial planning is the only form of financial advice and they’ve treated it as the core education, when in fact financial planning is itself a specialisation,” she said.
“So stockbrokers, investment advisers, accountants, risk advisers have all struggled because their specialisations aren’t recognised by FASEA.
“That is also showing up in the education requirements where degrees that are most suitable for our industry, such as Bachelor of Commerce or Economics, are not approved degrees – the only degrees approved are about financial planning.”
Ms Fox said the standards authority had been needlessly heavy-handed in its approach to approving qualifications, and it was hoped the government could take a “more nuanced” interpretation when it took over FASEA’s standards-setting responsibilities later this year.
“At the moment, someone who graduates with a Bachelor of Finance from Sydney University is considered less qualified to work in the investment industry than someone with a Bachelor of Property majoring in Financial Planning from Central Queensland University,” she said.
“But when you look at the legislative instrument it doesn’t specify financial planning – that particular focus is coming entirely from FASEA.
“We hope that Treasury will have a more nuanced view of the specialisations that exist within advice. Ultimately we want clients to get the advice they are seeking and to know people have been properly qualified and educated in those specialisations.”
However, a spokesperson for FASEA said exam pass rates among the stockbroker community more broadly had been strong.
“As stated by Senator Hume, there has been an average pass rate of 84 per cent across the stockbroking industry for the nine exams held to the end of 2020,” the authority said.
“Results vary by firm, with half the stockbroking firms performing at or above the industry average for both the November exam and exams in total. The exam does not test specialist knowledge. Rather, it requires advisers of all types to apply general knowledge of legal and regulatory requirements, ethics and client behaviours that apply to all advisers to a range of scenarios.”
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With a pass rate of only 67% for the January exam (much lower than the average of the previous exams (78%)), and 5 more sittings, there has to be some nervous advisers and brokers out there now!
In the medical profession, wannabe doctors do everything to get a thorough basis on the entire body before they go off and specialise in a particular field. In the financial planning sphere it’s the reverse, with people allegedly ‘specialising’ without knowing all the component parts to begin with…. and all these ‘specialists’ are pushing back on the need to do what the other professions have done.
Ms Fox, they are still relevant degrees. Its the fact that your stockbroker members clearly have done no further studies and proper CPD in the broad church that is financial planning is why they are failing the exam. I have similar quals but also a full DFP and I only had to do the exam plus the Ethics unit to comply. Its worrying that they are in the same industry as us in ASIC’s eyes.
So the old Collins Street and Pitt Street Stockbrokers want an exemption from or a variation of the FASEA exam?
I call BS here.
Not only old lifey’s leaving the industry, now old broker’s too. A new batch of “lifestyle coaches” hitting the market (though without ongoing commission or broking fees) When I did the exam I thought it was about 20% FASEA code/standards, 30% super, 20% insurance and 10% investments and stockbroking. That said most of the questions were pretty simple, you had three hours with reference material online (and told what to study). I’m concerned anyone failed it, but the old broker’s failure rate does not reflect well on their sector.
Yes but these hard done by individuals with commerce and finance degrees want to sit in front of clients and give financial planning advice. Do the required study. Commerce and business are NOT financial planning. They may be part of it but there is much, much more. You should know that if you want to operate in the profession and pass the exam. It is the thin edge of the wedge for accountants and brokers to slink out of the requirements.
I have a double major in econs and fin, I was forced to do 4 bridging subjects, plus ive sat the stupid exam. Im 47 with 3 young kids, I coach cricket, im on the commitee, donate time to other community areas where I can. If I can do all this and run a one person planning business why cant these others that sit up in sydney or wherever in thier luxury offices and massive pay packets? These guys are on north of 300 to 400k and they whinge about this, poor babies. Fox says planning is a specialist area, well no its the area that all the rest fall into. This is a very uneducated comment from this person. How can you give advice on a share portfolio without knowing the clients full financial circumstances? The brokers want to just buy and sell shares on in house recommendations and make lots of brokerage like the good old days, get floats flog them to the clients clip the ticket. Well sorry, no more, get qualified or get out.
Work in a super fund yeah no drama no education requirements just send a client a automatic rollover with a small print warnings no drama no client circumstances taken into account no worries