Financial advisers and accountants who are required to complete the mandatory Financial Adviser Standards and Ethics Authority (FASEA) exam have been warned not to underestimate its difficulty despite it being an open-book assessment in areas related to compliance.
The warning came from Macquarie technical advice services head David Barrett as part of a webinar detailing the requirements of FASEA’s education standards.
“Don’t be fooled by open-book exams. As someone who has sat nearly 30 open-book exams, I find them harder than closed-book exams because it is easier to get distracted by thinking you can find answers from the materials taken into the exam, but instead you usually end up wasting time,” Barrett said.
He warned advisers who had never sat an open-book exam that it would trip up many of them and encouraged them to prepare well beforehand.
“The adviser exam is probably the biggest hurdle you will be facing in the short term and has the potential to trip up a lot of advisers, and I would recommend taking advantage of any practice exams and coaching,” he said.
“The technique you take into the exam will be critical in getting through it and I would expect that some advisers will not pass the first time round, so giving yourself time to resit the exam will be critical as well.”
When it released its Adviser Exam Standard in late 2018, FASEA stated it would schedule two sittings of the exam in 2019 and six sittings in 2020, with a minimum three-month waiting period between each attempt of the exam by an adviser.
Barrett highlighted while there was no explicit limit to the amount of times the exam could be undertaken, the FASEA timetable imposed an implicit limit of four to five attempts before advisers had to pass the exam by 1 January 2021.
“The ramifications of not getting through the exam by that date is that an adviser will not be able to provide advice and will need to go through the new entrant pathway to become an adviser again, which would be a diabolical result for someone who already has a lot of experience in the industry,” he said.
“Don’t underestimate the importance of this exam in that context because if you have not passed by the deadline, you will be shown as non-compliant on the ASIC adviser register and treated as new entrant.”
