With recent FASEA responses to the Senate economics committee indicating the standards authority has “no powers within the Corporations Act” to offer grace periods when it comes to the compliance deadline for the exam, AFA acting chief executive Phil Anderson said this could spell trouble for advisers who had staked everything on passing the final sitting.
“The further we go on the pass rates are declining, and there’s a significant number of people left that haven’t attempted it,” Mr Anderson said.
“We’re particularly concerned about advisers who might sit the November exam and that might not be their first attempt, it could be their second or third and they ultimately get notice a week before Christmas that they haven’t passed. What happens to their business and their clients?”
According to FASEA statistics, approximately 13,500 advisers or 65 per cent of the adviser register have passed the exam so far, with the results from the May sitting of the exam not yet in.
In its exam update in early May, the authority said that around 2,100 advisers had registered for the May exam and 600 for July. There are a further two sittings of the exam taking place in September and November.
In spite of the legal restrictions, Mr Anderson said anything the authority could do to “reduce the pressure” on those attempting the exam closer to the deadline should be considered.
“What are we going to do to protect the clients who might all of a sudden lose access to advice, and equally what can we do to make sure those advisers can exit their business in a graceful way, to avoid a fire sale or in effect being forced to hand their business back to their licensee and turn off client arrangements?” he said.
“We’re just very conscious that people sitting, whether it’s the September or November sessions, if they’re facing the consequences that if they don’t pass there’s no plan B, there’s no solution and they haven’t got a purchaser, it’s going to blow up not only their ability to operate but also the value of their business.”
The exam is BS – anyone that thinks this exam will weed out unethical advisers are deluded. The majority of advisers that were hauled over the coals by the royal commission were also CFPs which is apparently are the most ethical advisers
Name one CFP who was “hauled over the coals” at the RC?
It was the Dealer Group heads who predominantly gave testimony.
This comment above about CFPs is completely false and egregious.
Wasn’t Henderson CFP?
No, he was not ever a CFP.
Question #78 from the May Exam:
True or False:
Some financial advisor’s believe that they can always recommend an outperforming fund manager? T/F?
Some financial advisor’s believe that they can always recommend an outperforming fund? T/F?
There’s an obscure and dubious question that will lead to better client outcomes eh? Give me a break!
Politicians need to sit an ethics exam, even if the pass rate is 10% they would still fail it!
Still amazes me that there are some advisers thinking this is a “test”.going on about how I failed, or how I passed…it’s partly a culling exercise, but mainly it’s a get out of jail card for CBA and the banks…It is not a test…it’s not even some opportunity to say we all passed aren’t we now professional.. According to the FPA and CBA (the fathers of FASEA) you did the crime and you’re doing the time.
No pressure here, eligible to stay but what for?. I’m out after 30+ years, still youngish and planning to make better money giving myself the excellent advice that I gave others for years. Only stayed in this long for the clients sake. Advising has become a mug’s game for any ethical adviser.
The most curious thing about anyone sitting the exam after 30 June 2021 is that unless the questions are updated by FASEA (which I don’t think they will be just for the next 3 exams) candidates will be applying some old laws & regulations and not the new ones which come into effect 1 July 2021. No one seems to have thought that through.
That’s how much regulatory change we had just in the last two years. Even a new(ish) exam is now out of date.
As to your comment, I’ve done the exam and am staying. I’d like to think I am ethical and not a mug. Wish you well.
Ahhh but they have thought it through and that’s why it will become an annual exam. Definition of a mug’s game..” a foolish or futile activity”. Best of luck.
For those who gloat a pass and are not sympathetic to others who failed and have to do resits, ought to know that the FASEA exam is Multiple Choice, it has a psychometric overlay to it and it not necessarily is the best testing method for anything. Also it is for ETHICS not your competency as an adviser. Some can guess a correct answer to get it right, other questions may more than one correct answer.
There is no allowances for the differences in peoples mental abilities, and they do not return your paper on a fail so you could study where you went wrong. There is no fairness whatsoever, so no assistance. Yes it is a real joke.
You are far better off getting a degree at university at least they treat you with respect and care that you will never get from FASEA
You’re conflating a whole range of different issues in this rant. There’s three broad areas of testing & Fasea tell you which areas you need to study if you failed. If they suggest all three areas, which many have taken as too broad, it simply means you failed across all three areas and you know you have work to do. There has been plenty of pre-exam assistance available for people who were willing to commit some time and/or money towards staying in a profession they say they love.
How you manage to compare a one-off 3 hr exam with a 3 year (fulltime) university degree is mind-blowing. Did you want someone from Fasea to come out and give you a hug before & after your exam??
I think what they are saying is there is a real lack of flexibility from FASEA. When I was at Uni I was borderline to fail a subject in my final semester which meant I would be unable to take up a graduate job role starting the next month I had been accepted for. The Department Head called me in personally and we discussed the impact of a fail. As the subject was non core to my major (and job) he gave me a conceeded pass (but no hug). Funny thing is I ended up being much better at the subject later on.
Ha ha……if you can’t pass a simple FASEA Exam you should not be in the industry. GO and get a Council job that doesn’t require any language test.
I don’t understand the anger from advisers who have passed? You’ve passed and are now angry with the 35% that haven’t (good riddance). Seems idiotic as one of the 65% who has past that is hopeful the rest will be able to get through this joke of an exam. As an adviser I want as many people to be able to receive advice as possible. That’s our job but I guess if your only worried about yourself it makes sense but I wouldn’t want that adviser.
I’m not sure there is much anger at those who haven’t passed. The anger is more at those who are lobbying for exemptions and extensions. Advisers have had two and a half years to do the exam. This is more than enough in spite of inefficiencies in the process, COVID interruptions, and general business and family pressures. If the exam is too difficult or too much of an imposition for some people, then they are not well suited to being advisers. They need to quietly move on to their next career, with all our best wishes. But they should not be supported in any attempt to garner exemptions or another extension.
On 1 Jan 2022 it will be possible to tell the media, regulators, and politicians that all licensed advisers have passed an exam. This is the sort of tangible, verifiable, proof many of them are seeking that minimum standards have improved. That milestone date should not be delayed a moment longer.
“….. then they are not well suited to being advisers.”
I have actually passed this FASEA Exam (if that is what we are calling it – Communist Re-education Camp is what I call it) and there is not one, I repeat, not one part of this exam that helps me provide Advice to clients.
I will leave it to you to provide me with one example of any part of this very weird exam.
If people need extensions – grant extension.
This madness from FASEA of month to mark the exam when most of it is multiple choice, completed directly onto the computer and therefore the results are know immediately – it is just FASEA and a belief from FASEA that we are not ethical. Read Treasury Submissions to the RC, they clearly show a complete belief that ALL Financial Planner not using Industry Super are conflicted, unprofessional, bias and have no moral and put our interests above that of a client for a commission. This is why we are being re-educated at the Communist Re-education camp. Treasury believes the TV, high returns and low fee, not for profit and all that.
It will not end at this exam. Support people for an extension because you might one day be next.
Sounds like a regular watcher of Outsiders on Sky News…..
Mr Anonymous —your care factor for good older very experienced advisers is zero!
You have had 2 1/2 years to do this. That you listened to some idiot or association that reckoned it wouldn’t be enforced – well really sorry but that’s too bad. The exam is pretty straight forward if you embrace the fact that this is a new world. I disagree that it is irrelevant and a waste of time. I learned stuff, I read RGs in detail that i had never really examined and my clients are better off. I know and they know I have met a standard. I guarantee that NONE of your clients would be impressed that you have failed or have opted to attempt it, right at the very end of the timeline. What amazes me is some of the loud-mouthed “Gurus” aren’t listed as having passed. if you haven’t yet worked out that this is a program to clear out people who really shouldn’t be in the game, then poor you.
My god I’ve never heard anything more true!!
Oh really.
Obviously a troll.
Clearly isn’t advising because who would have the time?
The whole thing is criminal. I know so many older advisers completely screwed over by this disgusting process!
I’m not sure what’s disgusting about it. If you’re in the industry advising clients all the time, then what’s covered in the exam should be relatively easy to pass. There’s been a number of exam prep courses to assist advisers get exam ready. But really, if concepts around the law that governs our relationships with clients, ethical behaviour & general financial advice construction are beyond any one, of any age, then you need to question if you’re the one that this weeding out process was meant to target.
There will be some very tragic cases emerge for both adviser and clients. If you have not sat, please register for July.
For people who assist others with planning for life’s events, it seems many planners fail to practice what they preach. If your client was facing a career ending event, I’m sure that the advice wouldn’t be ‘ignore it until right til the deadline’ or ‘hope that some idiot politician will change the rules so that you dont have to do the exam’…..but that seems to be the path of so many. The original deadline was extended by a year, yet so many have failed to plan for their career ending deadline. Can there really be any sympathy for people who cant do for themselves what they charge others to do??
Politicians and institutions have deliberately ruined many financial advisers livelihood for their own gains with no duty of care!!! Many clients are much worse off due to changes, many will no longer have adviser to help them with their needs
nah
Sorry, “nah” is just wrong. Many clients are already worse off. It is just irresponsible and completely ignorant of reality to believe in your response “nah”.
How are clients already worse off ?
Does anyone know the dates for the annual exam? I’d like to sit my 2022 exam in July if possible….you laugh now but it’s coming. You have no conflict free representation, so Advisers are going to be easy targets so don’t throw out those study notes yet.
They will no longer be a licensed financial planner and they will need to either (1) leave the industry (2) establish a system to get around the fact that they haven’t passed the exam. Most will do (2) despite it being illegal but realistically they have had more than 2 years to pass a reasonably simple (though poorly worded) exam and if they haven’t done so I fail to see what anyone should have sympathy for them.
Here is an Ethical dilemma for your point 2.
a) Unlicensed Advice – fine of $22,000 and maximum of two years – but seems to be OK with Liberals https://www.ifa.com.au/news/29607-we-have-to-let-people-make-their-own-decisions-minister-brushes-off-influencer-advice-concerns.
b) Incorrect FDS issues or not issued by a licensed Financial Planner, $250,000 fine and maximum 5 years.
Correct me if I am wrong.
I wonder what people will do?
walk away
the exam and FASEA should not of existed in the first place.
FASEA and the exam does nothing for consumer confidence and consumer engagement
but it does…so deal with it
FASEA or no FASEA….clients couldn’t care less.
…not “have” existed….
Advisers have received sufficient opportunity to complete the FASEA exam. With 65% having already passed, clearly, the remaining advisers must be considering retirement or departure from the industry if they fail the remaining exams.
Hope they have a plan B !
Seriously, the exam really isn’t that difficult for a practicing adviser to pass, especially as the pass rate is quite low. If you’re going to continue to be an adviser, just suck it up and do the exam, particularly if you are running a business where clients and staff depend on you. (Note, I am saying this as someone who was one of the first to sit the exam, and pass it first time without issue).
If you’re having trouble as you haven’t studied for a while, there are some great books out there which give some very useful tips about how to study and take exams. One short – but informative – book that I’d recommend is “The College Success Cheat Sheet” by Jonathan Lee Davidson.
I’ll join the chorus of just about everyone who thinks that these requirements are just an over-the-top box-ticking exercise that will achieve nothing in the real world, but it’s something over which you now have no control, so just register yourself and do the exam; the sooner the better!
Advisers have had since June 2019 to pass the exam. Anyone who has left it to the last minute has only themselves to blame.
Anyone who is blaming the 35% of adviser’s who haven’t passed this ridiculous exam instead of blaming the ridiculousness of this exam in the first place sounds like a boofhead.
One issue is the requirement to wait 4 months between exams so a a adviser who sat for the exam in MAY can only re-sit in September and then have no further opportunities to sit again for a 3rd attempt
That’s been known from the beginning, one of the reasons I sat the exam early, well before the original deadline. I wanted to stay in planning, so I did some exam prep and got in early. Passed first go. Anyone who has left it to this late in the game isnt really serious about what they’re doing, about the impact on staff or clients, no matter what they say. Their actions (or lack of) speak more powerfully than their words…
Unfortunately I had spent a year on the sale of my business only to have it fall throgh. The next 12 months up until this month I have battled severe illness includng 2 surgeries. Now I find myself in a very difficult position. FIre sale my buisness and enjoy a retirment in poverty or hope like hell to pass the exam in one go.
If you fail once, that’s understandable. But if you then fail to commit appropriate resources to the task, such that you fail twice, then you have to question if you should be in planning at all.
Seriously, its not like this deadline has sneakily crept up on them. If you can’t pass a 3 hour, non-technical exam, that you’ve had years to prepare for, maybe it is best that you leave the profession.
There has been a 30 months grace period. I am not sure more is needed.
great position to place everyone in , how does this help clients & advisors
NB i have sat this ridiculous ambiguous exam & failed either i am stupid after 20+ years and i have a degree etc,
if over 30% are failing is there something wrong with the exam or?????. This should of been CPD training not 3 hrs exam. If you think i am complaining i am not the exam is no more then the govt trying to justify the behavior of the past instead the govt know who is at fault and should of prosecuted the banks & the large institutions, I note the banks have exited the advice side of things HMMM???
correct . they seen the light – 65% of advisers cannot see it.
I would have thought that people who own businesses and wanted to get out would have sold by now and not left it to the last few months.
If they did they only have themselves to blame everyone knew the deadline from when FARSEA issued it.
“anything the authority could do to “reduce the pressure” on those attempting the exam closer to the deadline should be considered.” I don’t know what this means. No pressure was reduced for me when I sat the exam yonks ago.
There has been several years to sit the exam, why should the people leaving it to the last minute be provided special treatment? It’s not like this date has suddenly been sprung upon them, they have known when the deadline is for some time. The exam is designed to weed out those who shouldn’t be providing advice, so if there are some who have failed multiple times, these are the last people we want to be given allowances. The fact of the matter is, the exam was not difficult if you know what you’re doing and you read the preparation material. This is the new world we live in, let’s get on with it and stop complaining about it.
100% mate
Haha. “The exam has been designed to weed out those that shouldn’t be providing advice”. good one SR. I needed a good laugh.
If you cant pass this exam then you shouldnt be giving advice
Why would you need a grace period? If you haven’t done it by now then seeya later!
Absolutely, harsh reality is if you haven’t got yourself sorted by the deadline you probably should be exiting!!
I like your generous attitude. lol Only recently has FASEA provided detailed assistance on what to expect in the exam, with more sample questions being provided. Also, some advisers could have been seriously ill for the past 12 months, and are only now able to sit the exam. Others struggled with the IT connected to the Proctoring, impacted by Covid19, so have made several attempts without success.
You have been able to do the exam since 2019….you would think that people who are paid to plan for a living might have actually done a bit of that themselves…
How compassionate of you. You have no idea of the advisers situation and what they are going through. There is a lot of changes in the industry and then a lot of adviser have changed Licencee or been forced on them and this creates so much extra work in itself. There also may be health issue and we wont talk about the mental health issue we are all facing. Just because you have passed, please be considerate of others and show some empathy. For the record I have changed Licencee, work 6 days a week to have all the SOA completed in the frame and also passed the exam.
This is getting tired…
so so tired…
So what you are saying is that it is possible….
I hope you have the ability to demonstrate more empathy to your clients when they experience a setback in their life. There are many reasons why advisers are struggling with the exam. Rather than dismiss them, why don’t you go out there and try to help them. Show some care and concern for your community.
do you work for your self or someone else? are you under 40 or 50 or 60? Have you been in this profession for over 1 yr, 5, 10, 20 yrs? How’s your mental health? Do you run and family, house hold, and business? Maybe you should think about the others that this affects – the older, single practice advisers who are about to lose their livelihood after 20,30, 40, 50 years.
If people have been doing this for 20, 30, 40, 50 years than the exam should be a walk in the park. If you have been doing this for two decades or more and cant pass, than despite all the other excuses you want to put up, you just shouldnt be doing this job anymore
You pose a great question but I’m going to guess that the reason you would need a grace period is if you hadn’t passed it. Your seeya later approach sounds beneficial to orphaned clients though.
Agree, there has been plenty of time. I sat my exam in December 2019. Though, this does not mean I don’t think the exam is a farce!!
Totally agree…..we’ve had two years notice so its not like this moment is a surprise. Leaving it this late is playing with fire and maybe those clients actually deserve a better adviser who actual considered the adverse impacts on their clients of not completing the exam.