The Financial Adviser Standards and Ethics Authority (FASEA) has pushed back at suggestions its exam is unsuitable for specialist advisers, pointing out the pass and failure rates are not skewed towards any one type of practitioner.
Addressing a Senate Estimates Committee hearing yesterday, FASEA chief executive Stephen Glenfield said: “The relevant providers exam is a high-stakes exam, but it is an achievable exam for prepared advisers as evidenced by the fact that nearly nine out of 10 advisers who have sat the exam have passed.”
Glenfield said the overall exam pass rate of 89 per cent showed passing the exam was achievable for advice providers, regardless of their specialty, and rejected public criticism of the exam.
“FASEA notes recent media commentary suggesting the exam is not appropriate for specialist advisers and is too difficult for them to pass,” he said.
“Consistent with the requirements of the Corporations Act, the exam is set as a core competency test applicable to advisers in their role as a relevant provider and is not a specialist exam.
“Analysis of the composition of the 1437 who have been unsuccessful in passing the exam to date does not demonstrate a disadvantage between generalist financial planners and specialist financial advisers, with a split of approximately 60/40 per cent respectively composing those who had failed.”
He also pointed out all advisers who sat the exam had been given access to resources to assist in their preparation, including a curriculum, reading guide, practice exam questions, pre and post-exam webinars and feedback on their results.
While 65 per cent of registered advisers had passed the exam at the end of March 2021, enrolments for the May sitting were close to 1900 advisers and over 1500 had registered for the July exam, taking the number of advisers attempting the exam to more than 70 per cent, he said.
The exam was also defended recently by Superannuation, Financial Services and the Digital Economy Minister Jane Hume, who said it would remain in place, despite the government moving the functions of FASEA into the Australian Securities and investments Commission and Treasury.
At the same time, Senator Hume said all those who wanted to be considered an adviser were required to do the exam and no consideration would be made for specialisations.
This position was rejected by the opposition, which said the way FASEA was created and the exam structured failed to consider the work and qualifications of different types of advisers.
