The FPA has released for consultation a detailed draft proposal for consideration by members.
The document, seen by ifa, outlines how the adviser exam should play out including the exam format, duration, style and the materials allowed in the exam, as well as the mark advisers would have to achieve in order to pass.
In an email to members last week, the FPA released all the documents relevant to its recent 2017 National Roadshow. Among the documents was its proposal for FASEA on the compulsory adviser exam, which existing advisers must pass by January 2021.
In the proposal, titled the Degree and Degree Equivalence White Paper, the FPA has suggested that the exam be set as a multiple choice exam to drive efficiency in facilitating the test and marking it.
Because there is no limit on the number of times an adviser can sit the exam there should also be a large bank of questions to use randomly in each exam to avoid repeatedly issuing identical exam papers, the FPA said.
Further, the exam should use real-world case studies to frame the series of questions and should be three hours long plus reading time.
For financial planners in particular, where knowledge of many different technical areas, constantly changing laws and benefits, and a significantly large selection of implementation solutions all need to be applied to a client’s goals and financial situations, the ability to find and apply knowledge rather than just have a good memory are critical, and this is why the exam should be open book, the FPA said.
In order to pass the exam advisers would have to achieve a mark of 70 per cent, the FPA suggested.
However, results should be provided to advisers on a ‘competent’ or ‘not competent’ basis rather than revealing the actual mark an adviser has achieved.
“The exam component of the framework is there to ensure competency rather than rank financial planners across the whole profession,” the FPA said.
Once the exam framework is established it should be tested on retired financial planners, the FPA said.
In June, the FPA released its proposal for how existing advisers should transition over to the new professional standards, while on Friday the AFA revealed it is undertaking research for its own proposal to the government.
Clarification: This article has been amended to clarify that the FPA's proposal is a draft document, which the professional association has not distributed publicly.
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