Speaking on a recent episode of the ifa Show, Tony Machin shared his exam experience, noting that despite inching close to retirement, he was determined to leave the industry on his own accord.
“It was important to me that I left the industry on my terms,” Mr Machin said on his decision to take the exam.
“I wasn’t going to have a public servant say that I could do this business or act for the clients like I have been doing for 36 years.”
With low pass rates inflicting anxiety on many, Mr Machin revealed that FASEA’s questions greatly disadvantage advisers with years of experience in the industry, despite their real-world experience.
“The November exam last year, there were nine blokes my age or around my age, from 51 to 67. Minimum of 25 years’ experience in the industry, they all failed the November exams,” Mr Machin recalled.
“But there was a 25-year-old, first-year adviser doing his first year, he passed. So, that proved to me that experience, what we would do, is irrelevant to passing the exam.”
According to him, the exam has a much greater focus on regulatory information that on real-world client relations.
Quoting fellow adviser David Glynn, Mr Machin said when undertaking the exam “you’ve got to understand that they don’t care what experience you’ve got”.
He added: “They don’t care what you would do.
“The FASEA people want you to say what they want you to hear.
“Whether it’s good or bad, it’s [the FASEA exam] a box ticking for the politicians and the public service to say, ‘Yes, well, we made them do this, they’re professional’.”
His advice for advisers preparing to sit the exam is to spend a lot of time practising and getting a robust understanding of what regulations FASEA is asking about in each scenario posed.
“They’re not questioning what your advice is or if it’s right or wrong,” he said.
“They just want to know, do you know this Corporations Act? Do you know the anti-money laundering? And if you get that, that’s what they’re looking for.”
Despite his frustrations with the exam, Mr Machin is optimistic for the future, noting that young people would take the places of those pushed out by compliance requirements while the need for financial advice grows.
“There’s more need for insurance, there’s more need for advice,” he said.
“There’s so much opportunity for younger people in this, they just don’t understand it at the moment, is that there’ll be no one (else) left in the industry soon.”
As technology’s role in the industry continues to become more significant, the advantage younger advisers have will only grow in his opinion.
“For someone who’s got computer skills and got the systems, that’ll be all computerised,” he continued.
“Young people can fly through that, and they’ll do well.”
The full interview with Mr Machin can be found here or on your preferred podcast platform under the ifa Show.
the exam could have been done better I think, missed opportunity. The young ones don’t get it, it’s called respect
The FASEA exam is just another challenge in life. Take it on, pass it, then you can call it an achievement.
Another complainer. This really is becoming quite pathetic. I will say this as clearly as it can possibly be put – if you cannot pass this exam then you have no business being in the profession, full stop. It doesn’t have anything to do with age or with experience, it is a barrier to entry in order to tidy up the industry for those who are going to be operating in it far into the future. Nobody cares if it is putting you under pressure. There have been people complaining that it disadvantaged people who care speed type (the exam is mostly multiple choice), complaining that it doesn’t take into account experience (it’s not meant to as it is an exam for everyone), that not all of it is applicable to their area of business (in accounting auditors study tax and vice versa even though they never do the job, are they continuously complaining about this requirement?). Can we please just move past this constant griping and whinging about something which is not going to change. It is the complainers who are making the industry look bad!
An exam that has nothing to do with giving financial advice to clients that is quite pathetic. So this exam is pushing the the knowledgeable, experienced advisers out of industry and a young 1st year candidate that has no knowledge of giving financial advice to clients, no experience passes the exam and this is who the consumer can rely on for financial advice? That’s a concern FARCEA hold your head in shame.
I’m glad experience is of no use; the hubristic overvaluation of experience and ignorance of financial and legal fundamentals the new framework requires are at the core of why young professionals with such training have been babysitting and cleaning up after industry veterans for so long.
The exam isn’t the only reason there will be on one left in the industry soon….
The thought of everyone in the Financial Services industry having to sit an exam which has many areas that we never advise on or use (Centrelink, insurance, tax, SMSF) is not only extremely unfair, but highly un-Australian. Its not a fair go.
It would be the same as asking an ENT surgeon to operate on a hand/foot, or sit a medical exam on operating on a hand or foot. it just wouldn’t happen.
It is important to provide context to see it through a different lens, as one size does not fit all even though that’s what’s being implemented.
Actually it would be like asking an ENT surgeon, an orthopaedic surgeon, a psychiatrist, and a GP, to all sit the same exam on medical regulation and ethics. Entirely appropriate, as law and ethics apply to all specialities. Just as it does in financial advice. The FASEA exam is about law and ethics.
Questions framed in a context of Centrelink or SMSF or any other speciality are not asking for technical knowledge in that field. If you think they are, you are missing the point of the question and probably getting it wrong.
Suppose you lived in Perth and were asked in a maths exam “if the distance between Sydney and Melbourne was 900 km, and you took a flight from Sydney to Melbourne that lasted one and a half hours, what was the average speed of the flight?”. Would you apply generic maths to the example context and calculate 600 km/h? Or would you say “I can’t be expected to know that, because I live in Perth and would never fly from Sydney to Melbourne!”
LOL an adviser, even a specialist risk adviser or stockbroker, is no way comparable to a ENT specialist. Such a horrible analogy.
A risk advisor/stockbroker is more generalist across multiple areas of financial advice than most people on this forum think.
It is sad reading comments from the negative doubters. You do know that the exam has an isometric overlay and the marker can ( whether or not you selected all the correct answers in the multiple choice questions) decide to pass you or fail you if they like or don’t like the comments in the questions that call for commentary. Isometric overlays has been dumped by a lot of universities. Check for yourselves.
I have done the exam 3 times, 3rd time passed, as a risk adviser it was tough, questions that had nothing to do with what I do, the amount of study I did would not help in the answering of them anyway, with questions like which is most correct, so they are all correct its which one they believe is more correct, which lump sum would a person be expected to pay, over time, bonus, tax return etc… it depends? .
The questions to me are not straight forward, they are not like this in the real world, some have a couple of ways to interpret them, I am sick of being told just just replace the word with insurance if it has investment component etc…, don’t overthink it etc…
The stupidest part of the whole thing is the master classes, the FASEA debriefings etc… many many hours of webinars were all about how to interpret the question they are asking, how appalling most of the study was around how to understand there questions, when they could ask the straight forward questions in the first place.
Advisers who claim the exam has nothing to do with what they do, seem to be admitting that they operate with scant regard to law and ethics. That’s primarily what the exam is about.
The reality is that during 2021, FASEA released a 78 question sample document, which told advisers exactly what they wanted to hear. If in the exam you said that advisers are the scum of the earth, & that they should run their businesses on a pittance, you will romp it in. To be frank, the real problem now is not FASEA, but the up to 8 University Units advisers with over 15 years will have to waste their time on. So get set for another 5000 to leave by Jan 2026. How there will be any experienced advisers left to put new entrants through their training year is beyond me. This Fed Govt is simply inept.
I recommend completing the Ethics unit prior to sitting the exam, this would prepare you in so many ways and you will have a ‘penny drop’ moment as to why the exam and changes to the industry are needed.
Totally agree to do ethics course first.
But that is a total load of unreal world rubbish.
The only penny I dropped was the bloody costs of courses and exams and the massive time cost I could have been working.
For well educated and well experienced Advisers it is FARSEAcal.
Sadly completing a FASEA exam does not alter a dodgy persons Ethics one bit. It is once again a money grabbing system to add to the pile of extra overheads that Advisers now have to pay. Sadly history has shown us that their are dodgy un ethical people in All professions and by completing an Exam will not change the spots of the Leopard
This exam is doing what it is designed to do – weeding out the advisers that simply are not up to providing advice. The exam isn’t that difficult!!
And by the way – 25 years of doing the wrong thing by clients shouldn’t justify an automatic exemption !!
Jason – I think you have drawn a very long bow here. Passing the exam – does not mean that you are competent, ethical or honest. Nor does it make you competent, ethical or honest.
In fact by your shallow, juvenile analysis of the situation – you have outed yourself as being the type of person – who should not be advising people. I feel sorry for your clients.
What planet do you live on where you see a regulatory compliance exam as being a reflection on someone’s competence as a planner?
Out of curiosity – do you empathise with your clients this way or do you reserve this spite for your industry colleagues?
the exam is not related to advice.
I sympathise with Mr Machin, but the exam is mainly an ethics exam. 25 years being successful in an industry that had many unethical structural flaws doesn’t really mean experience equates with integrity.
I think one of the main reasons many older advisers struggle is that they have acquired knowledge and practices over many years that are simply wrong. This is particularly so for advisers who have spent most of their time in vertically integrated dealer groups.
Those dealer groups have lots of training and “support” services that are ultimately designed to ensure advisers sell more inhouse product. They are not well aligned to ethical behaviour or consumer fairness.
Dealer groups also have complex multi layered compliance systems that are ultimately designed to protect the dealer group from rogue advisers. They are not well aligned with the actual law.
Experienced advisers who have absorbed a lot of dealer group training and compliance over the years are unfortunately learning the hard way that they have been misled.
Very, very true. You do need to be flexible and able to learn things to work in this crazy industry as an adviser.
You worded my opinion much better than I would. Law and what licensees do are often different. I was once told by compliance of my previous licensee (which I won’t name but started with A and ended with P) that ASIC and AFCA were irrelevant in deciding what to do as only their interpretation mattered.
…and your sage comments that have never been part of the VI model and operated their own AFSL for 20+ years????