In its submission to the government on Corporations (relevant providers – education and training standards) amendment (2024 measures No 1) determination 2024 (exposure draft), the SMSFSA said the proposed amendments would deliver efficiencies.
The proposed changes would see the removal of short answer questions and an increase in multiple choice questions, as well as removing the requirement that only provisional relevant providers and existing advisers can sit the exam.
The draft explanatory statement said that exams based on multiple choice questions “create efficiencies” by enabling computer marking to replace manual marking.
The SMSFA stated the proposed changes to the exam questions so that they only comprise multiple choice questions, will reduce exam administration costs and improve response times for exam candidates to receive their results.
“Our own experience with the conversion of written question exams to multiple choice exams, shows these efficiencies can be achieved without compromising exam standards or lowering the bar in terms of testing relevant knowledge and skills,” it stated.
“Removing the requirement that a person must have already met the qualifications standard before sitting the exam, is a common-sense amendment that will provide greater flexibility and accessibility for future advisers seeking to sit the exam.”
Furthermore, the SMSFA said the proposed changes will enable candidates to sit the exam at a time that better suits their circumstances, including those located in remote and rural areas who may be required to travel some distance to an exam centre.
“The costs associated with the administration of the exams have significantly increased since the transition of their administration from FASEA to ASIC. We understand that this is in part due to lower numbers of exam candidates,” the submission continued.
“In 2019, the exam fee was $597 per sitting and is currently $1,500 per sitting. These increases are not insignificant, are not sustainable and risk creating a barrier to entry. We anticipate, and look forward to, the proposed exposure draft amendments resulting in a substantial reduction in the exam fee.”
The SMSFA submission is line with other advice associations, such as the Financial Advice Association Australia (FAAA) and the Stockbrokers and Investment Advisers Association (SIAA).
In its response to the proposed changes, the FAAA backed making the exam completely multiple choice, removing restrictions on who can sit the exam, and allowing students to sit the exam at a stage that is suitable for them.
“The FAAA is strongly supportive of these changes, which we hope will encourage more people to attempt the financial adviser exam and enter the advice profession,” said FAAA chief executive Sarah Abood.
While the SIAA also threw its support behind these changes, it also called on the government to go even further.
“Candidates should be able to sit the exam at any time and not be restricted to exam blocks,” it said.
Additionally, more tailored feedback should be provided to unsuccessful candidates so that they can improve in their next exam sitting, the SIAA noted.
“This is particularly important in light of the incapacity of the PY candidate to progress until they have passed the exam. Currently, exam feedback is not individual but generic,” it said.
“All it does is repeat the curriculum item relating to the question that the candidate has failed. It does not tell them why they failed that question or what particular matters they should study to pass the question at the next sitting.”
Meanwhile, the Australian Securities and Investments Commission (ASIC) pushed back the date of the first exam for 2024 to 26 March, in order to allow sufficient time to implement required changes to the exam and ensure all candidates are held to the same standard.
