The financial adviser exam requirements outlined by the Financial Adviser Standards and Ethics Authority (FASEA) would give rise to a “cull” of a large percentage of the financial adviser population, according to the Association of Financial Advisers (AFA).
In a submission filed with the FASEA responding to its proposals around the financial adviser examination, the AFA said it had never been its expectation “that the Professional Standards regime was the vehicle for a ‘cull’ of a large percentage of the financial adviser population”.
“It should also be recognised that very few, if any, courses and certainly no other professions are solely reliant on one single exam as the sole determinant of a professional’s ability to continue to operate,” the submission said.
The AFA submission has argued that the FASEA process “should always have been a journey to assist advisers to ensure that they meet the standards expected in the future”.
“In reality, it appears to have become the complete opposite,” it said.
“The requirements set out in this consultation paper will, if they are implemented as proposed, achieve exactly that – a cull of many advisers,” the AFA submission said. “This exam will remove many good advisers who for one reason or another will struggle to pass such a challenging exam.”
“Put simply, if it was a four-hour closed book exam with no preparation materials and a limit of two resits, even the very best financial advisers will be highly challenged and anxious,” it said.
“One of the key skills of being a good financial adviser is the ability to put yourself in the shoes of your client and to understand their situation from their perspective. The same needs to apply in this case for the benefit of those impacted financial advisers, in that those setting the standards and those who are commenting on these standards, need to view these requirements from the perspective of those particular groups of advisers who will be most threatened by this exam requirement,” the submission said.
It said that among those most threatened were advisers who find examinations difficult or suffer anxiety and “those financial advisers in their 60’s and 70’s who have a passion for their profession and for their clients, however have not completed an exam for many years and will undoubtedly struggle when put into this position”.