A significant rise in pass rates for financial adviser exams in 2024 signals an encouraging shift, however a notable gap remains between those qualified and those practicing, according to Wealth Data.
Last week, ASIC announced the results for the November sitting of the financial adviser exam, which saw the highest average pass mark since 2022.
Some 225 candidates passed the exam, marking a pass rate of 77 per cent. It demonstrated a marked improvement from the previous exam in August 2024, which saw one of the worst pass rates of the exam at 62 per cent.
Money Management explored the various reasons for the varying exam results this year, which included better exam resources to prepare and candidates being more willing to wait until they felt confident.
According to Wealth Data, 2024 has been a “better year than 2023 in every way” when it comes to the financial adviser exams.
There were 1,053 candidates in 2024, up by 30 per cent from 811 in 2023, it noted.
Additionally, more professionals appeared to be successfully passing, with 743 passing this year while only 545 passed in 2023, a rise of 36 per cent.
“The average pass rate was 70 per cent in 2024, up from 67 per cent in 2023,” said Wealth Data founder, Colin Williams.
The next adviser exams will take place in 2025, on 6 March, 5 June, 7 August, and 6 November respectively.
However, Williams also pointed out a concerning disparity emerging in the adviser exam numbers. Namely, while the number of candidates passing the exam has increased, a growing number of them are not currently practising as financial advisers.
“Currently, 20,060 have passed, while there are only 15,503 active advisers as of the end of November 2024,” he remarked.
This leaves a gap of some 4,557 qualified advisers who are not actively providing financial services, a notable rise from the 3,633 gap recorded in November 2023. Additionally, this gap has seen a gradual rise over the last two years.
“The 4,557 who have passed but are not practising make up 29.4 per cent of the active advisers, up from 23.2 per cent in November 2023 and 17.9 per cent in November 2022,” Williams explained.
“The number of advisers and candidates suggests many potential advisers are ready but currently inactive.”
For example, he pointed out there are 432 new entrants on the ASIC Financial Advisers Register for 2024, while 920 advisers have stopped working, resulting in a gap of 488.
Nevertheless, the net loss of advisers this year stands at 120, indicating that around 368 advisers have returned to the field, Williams said.
In the week ending 5 December, overall adviser numbers stood at 15,505, according to Wealth Data.
