AFA News 5 August 2021. Earlier this week, FASEA issued a media release highlighting that to date 14,850 financial advisers have passed the FASEA Exam up to the May 2021 exam. This represents close to 70% of advisers on the Financial Advisers Register (FAR). This leaves another 30% of Financial Advisers to pass or at least attempt the exam twice before the end of this year.
The FASEA media release of 3 August 2021, provides some useful background on the Exam. To view the full media release, please click here.
This information that FASEA have provided may be of interest to members. We have set out the key messages below.
It is important to note that the registration for the September exam closes on 20 August 2021.
Background
In 2017, the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 was passed. This required all relevant providers to pass an exam approved by the standards body. The Exam formed a key component of the Parliament’s reforms to raise the education, training and ethical standards of relevant providers and improve consumer confidence in the profession of financial advice.
Relevant providers are classified as those advisers who provide personal financial advice to retail clients in relation to relevant financial products, e.g., financial planners, stockbrokers, SMSF advisers, aged care specialists and insurance risk advisers.
The Basis of the Exam
The Exam is a general exam that is designed to test practical application on the following three basic competency areas that are applicable to a relevant providers’ role, regardless of specialisation:
- Legal and regulatory requirements that relevant providers need to comply with when providing financial advice of any type
- How financial advice should be constructed
- How to provide financial advice in an ethical manner.
The key thing to note is, the exam is not designed to test technical ability or knowledge. The Exam focuses on the application of the law and Ethics at a base level of knowledge that each relevant provider is expected to understand to competently provide personal financial advice to retail consumers.
Who must do the exam?
All relevant providers are required to complete the FASEA Exam. A relevant provider includes all existing advisers on the Financial Advisers Register (FAR).
Who writes the exam?
The Exam is administered by The Australian Council for Educational Research (ACER) who are an independent, third party. ACER engages a range of industry experts to write, review and mark questions. All exams are psychometrically analysed to ensure that there is equality across each exam.
Exam Construction
Each exam contains at least 70 questions split between at least 64 multiple choice questions and at least six written responses.
What if an adviser fails?
Unsuccessful advisers may re-sit the exam within legislated timeframes. These timeframes mean there are only two more exam opportunities in 2021 to pass the exam.
FASEA provides access to a wide range of resources to assist advisers in their preparation, including curriculum, reading guide, practice exam questions, pre and post exam webinars and feedback with their results available through the ACER exam portal or the FASEA website.
Additional Exam Resources
If you are considering sitting the exam, the AFA offers a number of Exam resources and have a list of providers who can assist you in your preparation.
Please click here for the AFA Resources.
When does the Exam need to be completed?
If existing advisers wish to remain authorised, then the exam must be passed prior to 1 January 2022.
New entrants to the profession are also required to pass the exam before becoming authorised to provide retail financial advice.
Pending legislative changes for Exam completion
The Government has announced its intention to extend the exam deadline to 30 September 2022. However, this is ONLY relevant for those existing advisers who have failed the exam at least twice prior to 31 December 2021.
NOTE: This extension is subject to the legislation passing.
Opportunities remaining to sit the exam
There are 2 remaining opportunities to sit the exam prior to the end of the year. This is critical for you to note if you are:
- An adviser who has sat the exam once failed and not re-sat
- An adviser who is yet to sit the exam.
Dates for the remaining exam sittings are below:
| Sitting period | Booking period |
| 9 September to 14 September 2021 | Open until 20 August 2021 |
| 4 November to 9 November 2021 | TBC |
Note: if you have already sat and failed the exam twice, then should the legislative change pass, you will be entitled to the exam extension.
Recent rule changes to sitting the Exam
On the 8th of July 2021, FASEA announced its decision to provide all financial advisers who have yet to pass the exam, the option to sit the November Exam irrespective of the timing of their last sitting.
This is good news for anyone who may fail the September exam, as this provides the chance to re-sit the exam in November. Previously, this was not possible due to the requirement to wait three months in between exams.
Please click here for the full FASEA media release on the three-month rule.
In Conclusion
If you are an adviser who is yet to sit or pass the FASEA exam your time is now limited and if the legislation is passed for the exam extension, you need to ensure that you have sat the exam twice before the end of 2021. With only two exam sittings remaining, it is critical that you do not delay and register for the remaining sittings of the exam.
To register for the FASEA exam please click here.
Issued 05.08.2021. AFA Policy & Education Update
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