Local industry group heads have responded to the latest financial adviser exam results which saw just over 50 per cent of candidates pass.
The sittings were the last opportunity for advisers who are operating under the nine-month exam extension to pass the exam.
From 1 October 2022, all financial advisers must have passed the exam to continue to provide personal advice.
“Bearing in mind that those sitting the most recent exams are by definition experienced advisers, the pass rate reflects the concerns we have been expressing for some time that for stockbrokers and investment advisers, the exam is not testing the right things in the right way,” Stockbrokers and Investment Advisers Association (SIAA) CEO Judith Fox told ifa.
Ms Fox also referenced financial services minister Stephen Jones’ recent consultation paper which he said will address the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.
Following the result of the latest exam results, ASIC confirmed anyone eligible for the extension who has not passed in any of the three cycles this year will not be able to provide personal advice from 1 October which Ms Fox said “highlights the inflexibility of the existing framework”.
“That inflexibility is why the current consultation on the education standards is so important for the future of the profession.”
Meanwhile, The Association of Financial Advisers (AFA) CEO Phil Anderson noted the 300 advisers who failed the latest exams.
“This is a challenging outcome for these advisers to confront, and we call on their colleagues to do everything that they can to assist them,” Mr Anderson told ifa.
“It is important to note that the one remaining option for those who have not passed is to get off the Financial Adviser Register before 30 September 2022, and then seek to pass the exam at a later point.
“Should they do that, then they would not be able to practice until after they pass, and would need to find an alternative solution to service their clients in the meantime.”
Earlier this month, the Association of Independently Owned Financial Professionals’ (AIOFP) executive director, Peter Johnston told ifa that the industry group was “naturally disappointed” that Mr Jones did not defer the exam until after the 1 October “cliff” date to restructure it in the consultation paper.
However, Mr Johnston recently told ifa that the AIOFP had “not given up” on seeking an extension past 1 October.
“With the ridiculous past degree issue countered by the 10-year rule — thanks to Minister Jones — the big current issue is the exam October 1st ‘cliff’ date. The less-than-four-week time frame between when the results of the ‘last chance’ exam are released by ASIC and the ‘cliff date’ is totally unreasonable for unsuccessful advisers to sell/transition their business,” Mr Johnston said.
“If the exam format changes post October 1st for new entrants, why can’t current advisers that failed be given the same opportunity?”
Submissions for government’s consultation on the adviser education standards are now open and will close on 16 September 2022.
If you cannot pass after 3 years, 2 extensions and unlimited chances to pass the exam, maybe professional advising is not for you
I’d normally agree, but lets be honest, this is an extremely poor exam. Having talked with scores of people that have completed it, one common comment is that no one knows how well they done in the exam, and this is from people that all have passed.
What this tells me is that it’s not fit for purpose for testing. I’ve likely done over a hundred exams in my years and this would be the first one I’ve ever done where I didn’t have any sort of idea of how well I’ve done. Every other exam you either know the content or you don’t and are aware of what you do and don’t know at the time of completion.
It is irrelevant. If you need the exam to remain in your role you should do whatever it takes to pass. If you cannot or will not do that you should not be advising.
The FASEA exam is all about learning the right answers to the right questions and ETHICS has nothing to do with it.
The first 3 times I sat for this exam I answered the questions ETHICALLY and I failed. The last time a studied the right answers to the right questions on the FASEA website and passed. I strongly believe in ETHICS and HONESTY and all this exam proves is you must cheat to pass it. This is not the example we should be passing on to our new advisers who will be the future our of profession. ETHICS teaches us what is right and what is wrong and gives us guidance when faced with difficult decisions. The FASEA exam should test this knowledge and not require cheating to pass it. The exam must provide a scenario and is then tested on the response to ensure the person understands what ethical considerations are required. There is no other way to test ETHICS.
I found the opposite to be true. I passed first time just by putting on my ethics hat. It was admittedly difficult. But the standard has to be the same for everyone for it to be fair.
Not everybody sitting the exam will pass and that is the point. There is a percentage of the financial planning population this should think about other careers
[quote=Anonymous]Why would anyone discuss these type of things with a client?[/quote]
Your missing the point, the client case studies on the exam were essentially bread and butter for most advisers. The compliance questions were everything a proactive practice should be discussing internally.
I did not miss the point at all – the case studies – like if I started a new job as a financial planner at an ASFL and noticed all clients were in the same in-house product what should I do – what if I work for Australian Super, Aware Super, Hosts Plus etc. Lets face it, FASEA is the idea of Treasury for Financial Planners who don’t recommend non for profit Industry Super with unlisted assets performing better than everyone over 1,3,5,7,10, 15, and 25 years (I think I heard longer on an ad recently) the lowest fees and not for profit and sometimes you even get Qantas Points (I’m waiting for the steak knives) – it is like the old Communist re-education camp for non lefties – but I could be wrong. Who knows, working in a call center for a product provider helping people increase my employers FUM could be ethical? Conflicts it seems don’t matter – or do they – depends what product your selling I guess – Retail or Industry?
Ironically, the war is now over and I appears we will have product providers using employees to advise retail clients on the in-house product only – no ethical issues to see here move along? Remind me, what is the point of FASEA now?
I have no issue with the exam, but I object to the way our industry has been singled out, as if all advisers are dishonest. Is there any adviser in the country who overcharges in the same way as lawyers and surgeons, or gouges the taxpayer like pharmacists? Where are their ethics exams?
There were $15,000,0000 reasons for us to all do the exam…although they were hoping for $26,000,000 reasons…
Having passed the exam first time and studied hard to do that, yet I was not sure if I passed or not.
Given no one besides FARSEA and now ASIC has ever seen a marked exam.
I’d imagine seeing exams that nearly passed would have FARSEAcal interpretations / grey areas that Govt don’t want shown to Advisers.
All the talented advisers, new entrants and reps sat their exams much earlier in the story. Right now its bottom of the barrel talent clinging to whatever they can. Seriously, the questions were not hard than the average client, or internal conversations you SHOULD be having amongst your practice.
Why would anyone discuss these type of things with a client?
No surprises here. The exam has always been a croc, And to think that good quality advisers have lost their career over one bad exam is ridiculous.
When roughly 90% of all advisers have passed it, maybe it’s time to accept that it’s not the exam, it’s the advisers…
Well knock me over with a feather.
ASIC should pivot away from reviewing 2009 files in large financial planning firms to the AFSLs of these advisers that couldn’t pass the exam despite the generous amount of sitting opportunities. There is something fundamentally wrong if an existing adviser cannot pass the exam and I wonder how good their internal compliance processes are? Historical file errors are not likely to seriously impact a current day client but advisers that don’t understand the advice process and the regulatory regime that has overlaid the industry for a long time (that was tested in the exam) are a real worry.
Or is it just that the individuals are so change resistant that they just wouldn’t absorb the information required to get through the exam?
If that Stephen Jones waters down the FASEA education uplift he is just reconfirming the industry of financial planning and ensuring we are forever burdened by the regulatory neck rope around us. We need to move to a higher standard if we are ever going to be recognised as a profession and have some of Chapter 7 relaxed.
You’re overcomplicating matters. When it comes to compliance, best interest and following laws 80% of Advisers do the right thing, 10% follow the laws but don’t get the memo/email or misread that email, 9% really just can’t be bothered or so self-interested and finally, 1% are corrupt. From a compliance perspective, those last 10% dictate procesess. We’ve simply reached the bottom of the barrel now and we’re testing the last 10%.
Here is a question for you – if you are a Financial Planner and starting a new job – and notice that most of the clients are in the same in-house product – what should you do?
Assess whether the product is appropriate for the clients individually. If not, recommend a better option or product moving forward. Being in limited products isn’t by itself an indication of poor advice.
With better advice “access whether the product is appropriate” – your are kidding right?
Bigger margin so demand a pay rise.
starting looking for new job.
Lol, i didn’t pass because they didn’t test me correctly
Spot on MC!
How many times did you not pass due to incorrect testing? These people have had more than two attempts already, at some point take ownership.
100%. It’s always a problem with the exam, never a problem with the advisers who have consistently failed to pass it…
How are we still seeing articles about this.
By design the only people still eligible to sit the exam had failed twice already, they are the exact people we would expect to fail again and who should not be advisers. If they are such “experienced advisers” then it should have been a walk in the park like it was for most. I would say their “experience” is obviously not the kind we want to retain in the industry.
I passed the exam first sit ,but studied extensively in preparation for it .The content was concocted by some panel of academics that all live in a theoretical world .In my view the vast majority of the exam material had very little relevance to the day to day roll of a planner
Corps Law which governs advice, ethics, advice construction.
Which of these 3 areas arent relevant to the role, not “roll”, of a day to day planner…
I cant believe that this is still an issue. Passed move on – failed move out. Pretty simple really
You can explain then – what is the point of this exam?
To rid the industry of advisers who do not have either the knowledge or ability to simply learn enough to pass a basic exam. An exam that is not testing anything that they shouldn’t already know, by the way.
Well, you should give Michelle Levy a call because it appears she will be recommending advice be delivered from people “all over the place” so this exam will be completely redundant and in fact not necessary at all to provide advice. In simple term, it appears the “Industry” (your words) will have many people who never considered a FASEA exam delivering advice and all paid for by the product provider.
What a strawman argument. Michelle Levy suggests part of the industry (yes industry, not a profession yet) have non qualified people give advice, its a horrible idea. Doesn’t change the fact that advisers who cant pass this exam on at least their 3rd attempt should not be advising.
So the strawman asks, why are you so good if Michelle Levy believes it is not necessary?
It’s like an apptitude test…
The industry bodies have never been able to deliver a standardised qualification, let alone without grandfather exemptions, that can deliver some level of confidence in the public domain. They tried CFP but that had so many outs for advisers ( many of whom are probably complaining about the exam ) it really didn’t mean much. And that was sad because a lot of advisers deserved such a title but they had to share it with those who didn’t earn it – apart from years in the job.
Totally agree, I passed in 2019, the exam wasn’t great but there has been more than enough time to get it done.
Inflexibility?
They’ve extended the deadline twice.
The industry bodies aren’t doing themselves any favours by continuing their embarrassing fight.