FASEA exam takers should not rely on licensee policies
Financial Adviser and Standards Ethics Authority (FASEA) exam takers need to understand their legal obligations in the Corporations Act, rather than what their licensee policies asked them to do.
Speaking at a webinar hosted by the Association of Financial Advisers (AFA), Amelia Constantinidis, FASEA standards director, said this had been an issue with key advice documentation and was an area of underperformance across all exams, not just the May exam.
“You might all think you know exactly what you need to do in terms of advice documentation and you probably do, but it needs to be related to the scenario provided in the exam,” Constantinidis said.
“But I’d also encourage you to all understand your legal obligations stated in the Corporations Act rather answering questions based on what your licensee policies are asking you to do.
“There are differences in some licensees in terms of what is the requirements of the Corporations Act versus what your licensees ask you to do.
“I’m not saying they’re wrong, but there are differences and we aren’t assessing you on your licensee policy, we’re assessing you on the legal requirements.
“What I’m highlighting here is not only the underperforming areas for the May exam, but we are seeing these trends across all exams.”
Another one of these trends was identifying breaches and what needed to be done in terms of reporting a breach.
“It’s not [only] your licensees job just to know what a breach is, when to report it and how to report it,” Constantinidis said.
“As an adviser, it’s your obligation to understand when you have breached, when you need to notify your licensee or who to notify and what they do with it.”
Then of course, there was understanding the code of ethics and how it applied to different client scenarios.
“We really encourage you to look at our recent guidance materials that we provided, it does include the intent of each of the standards, how you look at it from an overall perspective but also how its applied to different scenarios,” Constantinidis said.
“The other key area is judgments and biases, so not only understanding client biases but also your own in terms of how you’re making decisions.”
David Glen, TAL national technical manager, said it was not necessary to learn everything off by heart but it was recommended for some fundamental issues and principles.
“That will stand you in good stead when you’re under exam pressure and you can recall those particular issues,” Glen said.
“Best interest is a fundamental that needs to be in the mind; don’t rely on the exam material. You’ll have to plough through tracks of corporations law to locate that and that’s not a good use of exam time.
“Safe harbour steps, code values and standards – those need to be embedded in the mind so you can recall those fundamental requirements quickly and efficiently.”
Recommended for you
It can be extremely hard to realise the gains from financial advice M&A, according to Peloton Partners’ Rob Jones, and more could be gained from firms looking inward at their own practice.
With platforms reporting their quarterly results, there is a clear divide in the adviser markets they are targeting, according to platform specialist Recep Peker, and which would be right for your clients.
The Federal Court has imposed a $10 million penalty on Macquarie Bank for failing to prevent and control unauthorised fee transactions by third parties including financial advisers.
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
