It has appointed the Australian Council for Educational Research to deliver the exam, which will cover topics including financial advice regulatory and legal obligations, applied ethical and professional reasoning, and financial advice construction.
The exam will be conducted in a range of capital and regional centres. It will attract a fee of $540 excluding GST per student.
Under FASEA’s legislative instrument for the relevant provider examination, relevant providers and provisional relevant providers will undertake a 3.5-hour (including reading time) invigilated examination comprising at least 70 questions with a mix of selected response and written response question types.
The exam will be open book for statutory materials.
Further, FASEA has released an explanatory statement to the legislative instrument that contains additional guidance for stakeholders in the operation and structure of the exam.
“We welcome stakeholder feedback for the final phase of development of FASEA’s relevant provider examination standard and it will be reviewed prior to release of the final standard,” said FASEA chief executive Stephen Glenfield.
The legislative instrument was informed from consultation received through 67 formal submissions during FASEA’s consultation process for this standard from March to June 2018. Feedback and submissions on the legislative instrument are due by 4 January 2019.
Has anyone ever told ASIC/FASEA the truth that DFPs/DFSs haven’t ever actually taught anything practical and/or useful to working as an Adviser? In 20+ years I haven’t used a single “learning” from any of the courses in the ADFP/ADFS, the SMSF Specialist Accreditation, Stockbroking courses/accreditation or Margin Lending accreditations/courses. It would be similar to handing an apprentice commercial pilot a thick guide of pure theory and theoretical opinions and telling them at the end of the exam, assuming they’ve passed, they can be entrusted with the lives of all 300+ passengers onboard for an intercontinental flight in bad weather at night. Theory doesn’t make a good Adviser. Experience, knowledge as a result of that experience, and a background/education and passion for finance and people does.
I’m 24 and I have just Graduate from Uni in the last 2 years. According to FASEA I have to do 1 Unit of study (ethics) but my 49 year old boss with 20 years of experience just found out his Bachelor of Commerce is too old, his Grad Dip in Finance is not considered a relevant degree, his Diploma of FP is worth more than the above Degrees and he’ll have to do at least 3-4 Units for FASEA.
On top of that he was just told not to do the exam in 2019 because the material won’t be written until 2020.
ACER holds scholarship exams for a number of private schools around the country and from what I understand of these they are very difficult (and the practice exams you can buy are generally a lot easier than the real thing). I’d expect they’d make the adviser exam super hard as well – in the end it’s in their interests to do so to get all the resit fees. #noconflict
Sadly, not a well researched article. The questions readers have posed below on ACER and ‘follow the money’ in regards the exam cost need to be followed up with urgency. These questions flow through to the Fasea board. e.g. are executives full time employees if not questions on remuneration etc need to be posed.
I understand in the pursuit for financial planning to be considered a ‘profession’, there is a need to establish and enforce industry standards; something both AFA and FPA have failed us. What I cannot comprehend is why such a hard stance from FASEA, and what they gain from doing so; other than a mass exodus from older advisers.
Having obtained my Bachelor in Financial Planning in the past five years, I do meet the ‘approved course’ however my knowledge is nothing in comparison to the knowledge we stand to potentially lose as older advisers leave due to FASEA’s complete ignorance.
Not even at university (AQF7 Level) was I required to sit for three and a half hours in it’s entirety! I pose a question to these (unbiased/non-educational institution aligned) decision makers. Other than barristers or doctors what other profession is required to sit such an examination? Once financial advisers sit this exam can we be considered at the same level and not have to again withstand the backlash from the failures of vertical integration.
And the problem is the so called bodies that are meant to be there for us dont appear to give a damn.
but seriously, would you listen to anything that either the AFA or FPA had to say? NO.
The dishonest advisers will pass the exam and carry on!
They wont even sit the exam…..and carry on!
ASIC report states that they’re well aware that the additional cost of education, compliance and staffing will end up being paid by the end client as the costs are past down.
Writing is on the wall guy, you must focus on HNW clients only. Financial advice is no longer for mum/dad clients and middle income earners as the margins aren’t big enough.
1. HNW clients only – $500k+ in super and $500k+ p.a. house hold income
2. Rebate insurance comms and charge up front (works out cheaper for clients long term) – If clients aren’t happy to pay, it’s scopped out due to cost
3. Stop charging ongoing fees and charge for point in time advice with invoice paid in meeting. It’s a slow transition but if clients see value, they will pay and you can only at $4k+ p.a. value for HNW clients. No ongoing fees also means no ongoing compliance obligations so the work you do directly helps the client… Unlike now where 50%+ of the cost goes to ensuring you keep your AR.
It’s a hard pill to swallow for some adviser but it’s impossible for advisers to service low and middle income earners and remain profitable.
Think of it this way: 1 x $10k p.a. client vs 5 x $2k p.a. clients…5 times the work for the same money servicing low to middle income earners.
financial planning is for the wealthy who have accumulated sufficient capital and have the income to pay a planner’s fees. its’ not for mum’s and dads. i would suggest a life coach for them.
agree 100%. however do i just move my office to Pitt Street Sydney to get these HNW?
This is exactly correct and hopefully most advisers are moving to this model. Those who will survive will do so. Just such a shame that the mayhem and train wreck left behind by FASEA and LIF will see those who really need help left in the greedy clutches of the unionised funds…
There are HNW clients all across Australia. Sure majority are in the capital cities but those locations also have more compitiion.
As mentioned above, if advisers wish to continue to service low to medium income earners, an easier avenue would be to drop the AR status and move to Money/Life Coaching. This allows you to reduce cost as there is zero compliance for coaching and zero qualifications requried.
Coaches charge upwards of $1000 ph so it defintiely has legs for advisers that have a good understand of all facets of the financial spectrum and strong relationship building skills.
So glad I steered my child towards Engineering instead of joining the family business. Was concerned 5 years ago- now I’m just resigned to being s*#ewd over.
So its going to cost $15 million to administer an exam! Yeah right. Who’s getting the cream?
How many guesses do we get and is there a prize?
where is the client outcome? I hear we have to “demonstrate that we have considered the needs of other family members (parents and children) when giving advice” so who is the client? Apparently its unethical to not consider the effect of the advice on the non-clients. Thanks FASEA. Has FASEA considered the ethical effect of their silly standards? putting advisers and staff out of business? phhhttt! why am I still in this industry and why do I pay my association fees?
Just read a summary that the exam is proposed to cover 3,471 pages of content!
I read a report this morning about the 100’s of practices already on the market to sell and this will grow exponentially. This is going to mean 1000’s out of jobs and tens of 1000’s of customers losing out. There will be a small number of practices that do well out of this and good luck to you. But those practices will then only deal with the best customers. Total disaster created by O’Dwyer, FSC and our industry bodies.
And who is going to be buying these businesses??? Until now I would’ve been a candidate – 35 years financial services experience, Degree, Grad Dip, Masters CFP (and former planner) – but as I am currently an executive in financial services not an adviser I am no longer academically or ethically ‘qualified’ to advise Mums and Dads. So even if I wanted to buy a practice I imagine I would not be allowed to. My enormous experience will not be available to assist and coach people needing financial advice…..bloody joke really (although not a funny one). Good luck when your ‘qualified’ planner is a 25 year old uni graduate, still living at home and basically no life experience…..it will all end up being merely tick a box planning…..and what clients would be prepared to a professional level of fees for that?
Me!
I’m a 26 year old – 7 years of advice experience and did my degree and other education by distance all whilst working full time. Don’t assume we were all hopeless at 25, some of us have a hell of a life experience. Age is just a number.
And for the record, I’d purchased 2 houses (sold 1) by 25, no living with the old folk, as much as I would have loved to I had to move out of my little town to follow career opportunities.
I’m seeing great opportunity in all of this for myself and people like me to get into our own business. But agree all of these changes are catastrophic to our industry as a whole.
ok good luck young man. i hope you have cash available. wish you the best.
Ahh another industry problem. I’m a woman 🙂
ok good luck young lady. best wishes to you and your future endeavors.
No one assumes that you are all hopeless, but the deck is really stacked against you.
The thing with that is, most younger FP are used to change. I came into this industry in 2011 and since I have felt nothing but significant change. Yes there are challenges but it’s the same as any business you have two choices – adapt or get out. I just think that for the ones who adapt there is plenty of opportunity from the ones who get out.
I was being a little tongue in check, I may not go out on my own, staying in my role and working part time whilst being a mum looks pretty comfortable to me at the same time. Who really knows what these changes will all bring but hey I’m going in with an open mind.
Your employer will likely have a very good idea of what the changes will mean, and DIB will likely limit the number of clienst you can service in a year. Simply, there will be less of us I suspect.
it is not going to be all that great even for those of us who are qualified and can remain in the industry. i have no capacity to service more clients i am already way too busy as is and i have no interest in growing my business with so much uncertainty, why take the risk. anything can change at anytime without any warning so i am not risking my hard earned capital into this sink hole thank you.
In fairness, if an adviser isnt willing to do a little study and pass an exam I dont think the clients are really losing out on much if they leave.
I have completed 3 Grad Dip Subjects this year – I have u/grad degree, grad dip in other field and I can assure you the level of commitment and time involved was far greater than I envisaged. Even allowing for the old saying fours open doors the challenge of passing is far greater than I remember from under grad studies 20 years ago. I am self employed with a mature business and the study requirement put the fear of god into me. It is tough Please do not underestimate the challenges and make passing comment that it is simply a little study because it is not
Cameron Russell – Simplified Financial Planning Brisbane
I’m out. Its not just the waste of money and time for this exam its the waste of time and money for the whole FASEA joke. Take FOFA, LIF, increased fees and compliance and it all adds up to one thing. You can no longer make a reasonable living in this industry.
yeah RIP industry, im out. im 36. have a masters, bachelors, dip fp etc etc , i’ll go do something else.
Same thing…. B.Com, Masters, Dip FP though dont qualify. WTF!?
M Com and B Bus plus financial planning qualifications and the same as being a painter.
I’m in the same boat – in 30’s, same quals etc. Too much BS and Risk in this Industry to make a living.
Try B.Com, FCH(FP)-AFA, CFP – FPA, SAA – SMSForg, ADV Dip FP and shortly to be “not qualified” enough…
See ya later ASIC, AFA, FPA, FARCEA, Liberal/Labor stooges, Bank executives and Union cronies. Have fun when there are no more advisers left for you to leach off. See you at the dole queues
2 words..Goodbye Scott
…and hello Bill.
I will just go and put some more fertilizer on my money tree for the extra fees for the exam
Went to do the same for mine, and its been stolen…
When the new anti corruption commission investigates the FASEA Board they should also check for any links to ACER. Given all the links between the FASEA Board and course providers, it wouldn’t surprise if they were creaming a bit extra from the exam administrator as well.
An absolute waste of time for everybody as it serves no purpose in the long term. An insult to persons like myself who have been in the industry for a long time and also hold a Masters Degree in Financial Planning with a research paper. Nobody is listening to us but what an industry these ever increasing regulatory bodies and committees have grown into. The number, which are heavily weighted predominantly by bureaucrats and would never survive as self employed financial planners is frightening. .
Another fee of $540. If the government is hell bent on continuing this nonsense with FASEA then let them foot the bill . It’s time the AFA challenged this draconian anti small business legislation in the courts
How much money do these people honestly think we make??? How many more fees will be thrown at us so nearly $2,000 per year per adviser for ASIC fees, the exam and not to forget the additional study expense. Then lets also not forget the reduction in insurance commissions so drop in revenue, the additional cost of compliance and being a member of a compliance scheme,who ever and what ever that is. So now we are in a situation where advisers are so sown up with cost and regulation advice will just be out of reach, if you don’t have an AFSL you don’t have any of the cost, plus no liability as you are not regulated which also means the consumer has no protection, but now these dodgy general insurance websites can continue to flog their products, no SOA so no cost no advice no liability but still paid a commission no worries. We have these property developers flogging the secret of wealth is an SMSF with a property inside, no advice find a desperate planner to do the SOA and take on the risk, no cost all commission from the sale of the property and again no protection for the consumer. Yes absolutely i can see how this path is the way to go!!! F%$&^*&G well done!!!!!
Spot on… I think it’s a joke.. and I already have a Bachelor in Financial Planning… and a heap of other stuff that’s irrelevant. Easier to have no qualms & spruiking SMSF property….
Of course there is a cost for it too.
… nothing but a money spinner for FASEA. This along with existing advisers having to obtain Graduate Diplomas which costs $25,500 in tuition fees. Don’t even mention the time away from clients and their businesses in order for the advisers to participate in lectures, study and sit exams.
Great, another fee that will need to get passed to our clients.
Has anyone seen any published accounts for ACER? Not immediately apparent on the website. Any idea how the $540 tax was arrived at??
Yea they plucked the figure out of the air just like every other bits of Bullsh!t they arrive at. There is never any reasoning behind it the nit wits wouldn’t have a clue.