The Association of Independently Owned Financial Professionals (AIOFP) will push again for an extension on the financial adviser exam when it meets with financial services minister Stephen Jones in Canberra next week.
In a statement this week, AIOFP executive director Peter Johnston said “we have not given up” on seeking the exam extension and amendments with Mr Jones.
“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?”
It comes after Mr Jones announced earlier this month that a consultation paper will be developed on education standards and the adviser exam.
Mr Jones said the government would look at options to “streamline the education requirements for financial advisers” and addressed 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.
Mr Johnston argued that the current exam format “was purposely structured to confuse and intimidate advisers out of the industry” and has negatively impacted future tertiary students considering financial advice as a career.
“We think 10-year plus experienced advisers who have left the industry in the recent past should be given an amnesty period to sit for a newly revised exam to re-enter the industry and not be subject to the new entrant rules,” he said.
Speaking to ifa following the consultation paper announcement, Mr Johnston said that while the AIOFP welcomed the news, it was “naturally disappointed” that Mr Jones did not defer the exam until after the 1 October “cliff” date to restructure it.
“We were hoping for a 12-month deferral of the exam, a removal of the ambiguous ethics content, and inclusion of questions around competency of their advice specialty,” Mr Johnston told ifa.
“To be fair, the minister did not specifically promise any exam changes, but we will however continue with our lobbying activities until October 1st in hope of a change of mind.”
Meanwhile, ASIC has since confirmed that the results of the latest exam sittings will be made available in the first week of September, which will give advisers who failed the exam less than four weeks to decide on their next course of action.
Mr Johnston said that the AIOFP is urging those waiting to “commence these preparations”.
“We are requesting that anyone buying practices over the next six weeks to be compassionate and fair with the terms and conditions, in many cases this will be a person’s lifetime work and needs to be treated with respect,” he said.
“We have already had enough mental health problems, stress and suicides over recent years and want no more. It will be a good time to check on those who fail the exam to see how they are coping once the results are out.”
Peter, have you not stopped for 1 minute to ask why these people haven’t been able to pass the exam over the last 3 years
How embarrassing that an industry body, which I would assume has a goal to advance the industry for the betterment of its members, lobbies the government to allow people who either can’t or won’t do an exam that is just one, simple, action to improve the professionalism of an industry that is still recovering from the flaws that the Royal Commission made abundantly clear to the populace.
Both this association and its member advisers who are hoping for an exemption to move on or move out.
Disagree.
Please stop it and focus on something else.
Compassion, as Peter said, is required for those who have spent 40 years developing a business only to have it destroyed by an exam that is ambiguous at best.
It is time for those in the “ivory tower” to spend a week at the coalface in the real world and go and cry themselves to sleep every night.
you’re missing the fact that they have also had 20 opportunities to pass the exam.
Is this the same body who was going to get the grandfathered commissions ban reversed. How did that work out for their members?
The only people charging members fees for advice, not required to deliver advice and no ability to opt out are product providers – so what is your point regarding product remuneration?
Peter you are sending a strong message about the makeup of your members. Any adviser that did not pass that exam has no business being in the industry – should not have even had a 9 month extension
100% correct. There has been more than enough notice.
Actually it is embarrassing to have an exam like that for any Profession.
Why on earth would you think it reasonable to have to pass a 3.5 HOUR EXAM ON QUESTIONS THAT HAD ZERO TO DO with what you actually did each day.
And even more ridiculous to have no syllabus or Structure to Study it.
Even more ridiculous to make this the test to keep your livelihood irrespective of all other qualifications and experience you had in the profession.
Even more ridiculous is that this exam has everything to do with the legal framework that these advisers work in and they still can’t pass it.
The exam covered 3 main areas – Corps Law relating to financial advice, general advice construction & ethics. It’s not a test on whether you know everything about insurance clauses, how to value one share against another or super contribution limits. Generic concepts that should apply to all whether you are stockbroker, risk only or holistic adviser.
For an industry where you could get your quals from a cornflakes packet back in the day, an exam is a reasonable requirement in that context. The fact that many long-standing planners are having trouble passing is evidence that supports the need for the exam in the first place.
I wish they would give up. As a member of the AIOFP I don’t want to see political capital be used up in this area.
There already has been an extension given. I am now questioning my membership with them.
Honestly, please stop! That’s enough now, the September deadline is a 9 month extension. This is no longer an Industry, we are now a Profession. Professionals stand apart in that they have a Degree and pass their professional exams to be allowed to practice.
OK Liz, so what is the advantage of being a profession – inability to affordably service many Millions of Australians – leave them to the product provides should we?
Actually, not proactively moving to a profession 10-15 years ago is exactly why we cannot service clients affordably. Unethical AFSLs have continued to skew advice “process” in favour of capturing product margin. This business model was enabled due to willing advisers who were happy to compromise their professionalism and ethics to meet the business targets of their AFSL.
So remind me – what is Intra Fund advice?
We have had years to complete the exam already. Anyone who has deferred it this long or is yet to pass needs to take ownership of that. There are far more areas of concern that Minister Jones needs to be addressing than extending the cut off date to pass. It’s a wasted argument
Some of us want it to become a profession – obviously not the AIOFP
And remind me, what advantages are on offer being a Profession?
Accountability and punishment…. oh hang on….
Yeah cos passing an ambiguous ethics exam will magically make us a profession lol. I have passed but my advice to clients is no better for it. Clients decide if we are professional not politicians or educators.
maybe thats why 80-85% of Australians wouldnt go anywhere near a financial planner…the market place has decided that we cant be trusted becoz of the lack of professional, conflicts of interest, etc. Continuing to lobby for exemptions to educational standards, extensions or exemptions for a simple exam that has an overall pass rate of about 90% tells consumers that many arent interested in improving financial planning, they just want to keep their snouts in the trough for a few years more…
Well said Dan. The very vast number of adviser in our industry will agree with you. Those who want to see us become more professional and more respected, those who have re-invested in their education and businesses are getting very tired of being held back by the “anchor of 40 years experience”. And why is it that some advisers with 30 or 40 years experience have sat and passed the exam and therefore contributed to the future whilst others have nothing more than complain”