Forty per cent of all financial advisers have now passed the mandatory compliance exam after a further 1920 were successful during the most recent sittings in June, according to the Financial Adviser Standards and Ethics Authority (FASEA).
The authority has released the results for the sixth exam period in which 2282 advisers sat the exam with 84 per cent of candidates passing, compared with 79 per cent in the April sitting when only 470 undertook the exam.
FASEA chief executive Stephen Glenfield said: “FASEA is pleased to present the outcomes of the sixth exam and congratulates successful candidates on completing an important component of their education requirements under the Corporations Act during the current extraordinary circumstances.
“Over 10,000 advisers have sat the exam with close to nine in 10 demonstrating they have the skill to apply their knowledge of advice construction, ethics and legal requirements to the practical scenarios tested in the exam.”
FASEA also highlighted, of the 10,238 advisers that have sat an exam during one of the six completed exam periods, 85 per cent have passed representing 40 per cent of the 21,700 advisers on the Australian Securities and Investments Commission Financial Advice Register.
In releasing the latest figures, it noted there were a number of areas that were frequently causing trouble, particularly for those who did not pass the exam, and these include when to issue and what to include in advice documentation such as financial services guides, statements/records of advice and fee disclosure statements.
It also flagged a greater need for understanding the difference between personal advice and general advice and how they apply to different client situations, understanding obligations under the Privacy Act, including the difference between personal and sensitive information and gaining consent to use that information, and being able to identify and report transactions by clients that may be subject to the Anti-Money Laundering and Counter-Terrorism Financing Act.
Advisers also struggled with the identification of client biases and how they can influence the financial and investment decisions of clients, and how to apply the Code of Ethics and the Corporations Act to advice scenarios, it noted.
The next exams will take place from 13 to 18 August and more than 1600 advisers have registered to sit the exam, with a further 900 advisers having so far registered to sit the October and November exams.
FASEA also recently announced it will hold six exam periods in 2021, taking the total to 15 exam periods for advisers to pass the exam before the deadline of 31 December 2021.
