Appearing on a recent episode of the ifa Show, Eureka Whittaker Macnaught co-founder Greg Cook – who has been in the industry for 30 years – believes that scrutiny and anger towards the FASEA exam are “misplaced”.
“I think you could pass the FASEA exam and still be a very poor financial planner, because there’s obviously a lot of stuff it doesn’t cover,” Mr Cook said.
“I don’t think people that were really arcing up about it and what have you, I think that was all of a bit misplaced.”
Late last year, ASIC confirmed there would be four exam sittings in 2022, with the first to be held from 17 February until 21 February.
In December, it was revealed that only 52 per cent of all candidates had passed the exam.
Just 63 per cent of candidates sitting the exam for the first time passed the November exam, compared with an average of 75 per cent across all exams.
To date, 3,197 unsuccessful candidates have resat the exam with 66 per cent passing at a resit.
“I mean, you should be able to study up and get the exam done,” Mr Cook continued.
“And I mean, if you’re unlucky enough to fail it, and resit it, and pass it a second or third time, well, you should be able to get on and do that as well.
“So there’s a heap of regulatory and compliance hurdles in being an adviser, and that’s just another one of them that we’ve had to deal with over the last year or two.”
ASIC is poised to take over administration of the financial adviser exam from the Financial Adviser Standards and Ethics Authority (FASEA) from 1 January 2022 following the commencement of the Financial Sector Reform (Hayne Royal commission Response – Better Advice) Act 2021.
Listen to the full podcast with Mr Cook here.
I can’t believe they think this is some sort of epiphany.
I agree it was a waste and the way the Government has implemented it (and most of the other changes) has been pretty poor.
However, people seem to miss the point that the FASEA exam was not about gauging whether you are a good adviser. It was part of a suite of things the Government are doing to raise the standards of the industry and will take time.
The FASEA exam was simply making sure advisers were away of what they should be doing from a regulatory perspective. I get what they were trying to do, but again failed in implementation.
Fully agree, the following is part of an email I sent to Senator Hume over her, and the Liberal government’s, exam we all had to pay to do:
“I was disappointed when I sat the exam last Thursday (19/09/19). This isn’t because I fear failing the exam, but because I don’t believe the questions were a true test of whether someone has the skills and capability to be a good financial adviser. Many questions were subjective rather than factual, and a case could be made for a number of the multiple choice possible answers. Of more concern, the majority of questions did not test the technical capability of participants; capabilities which are essential in providing good advice. For example, there seemed to be more focus on the psychology of clients rather than things that financial planners actually do – re-contribution strategies, insurances held within/outside of super, downsizer rules, portfolio construction etc
I’m not sure who devised the questions, but respectfully, if they were designed to “build consumer trust” I believe they missed the mark. ”
I passed the exam, but maintain it is meaningless red-tape derived from clueless, red-tape loving, anti-small business Liberal government.
I too have over 30 years experience. I passed the FASEA exam on my third attempt. I had to learn NOT to apply my advising experience to any scenario put up by an examiner. To have to learn how to do an exam per se is not a test of my capacity to be an ethical adviser. As a risk specialist, restricted by my the terms of my licence, I find it absolutely galling that of the 78 questions in the November exam, only three questions could be linked, directly or indirectly, to my capacity as a risk specialist adviser. I maintained there was absolutely no benefit to my clients from this year of stress.
‘You could fail and still be a good financial planner’
This possibly quite true, I have been many years in the industry and failed and then passed with a different set of questions. It is sensible to do a entrance type exam but it should be more targeted to the sector of the the industry you are working in. Risk profiles of some clients of stockbrokers clients can be very different to those of some financial planning clients
The exam covered three basic areas that are common to all areas of practice – the Corps Law, advice construction prinicples & ethics. That you think these basic things dont apply to all advisers is why we needed the exam & to lift the overall education levels & barriers to entry into financial planning
If you cant even pass this basic exam, do you deserve to be a financial planner.