Although the pass rate of the Financial Advisers Standards and Ethics Authority (FASEA) exam continues to drop, most advisers that have previously failed the exam are passing on their second attempt, according to the FPA.
The 79% pass rate in April was lower than the previous exams which had got progressively worse: 90% had passed in the inaugural exam in June 2019, followed by 88% in September, 86% in December and 82% in February 2020.
Ben Marshan, head of policy and standards at the Financial Planning Association (FPA), said advisers might fail the first sitting, but they tended to pass the second time around.
“Everyone can sit multiple times and the feedback that we’ve been getting is that usually on a second sit most of the people that failed the first time are passing,” Marshan said.
Some 7,958 advisers had sat the exam, which was about a third of the total advisers on the Australian Securities and Investment Commission’s (ASIC’s) Financial Adviser Register (FAR).
With two thirds of registered advisers yet to sit the exam, based on current trends, it meant at least 20% of those may not be qualified beyond the deadline if they don’t pass.
“If it is 20% that drop-off, that’s roughly in-lie with the feedback we got from financial planners who might not continue beyond the deadline date, so that’s kind of what we were expecting,” Marshan said.
Around 86% of advisers, about a third of the FAR, had passed the exam and Marshan said members who sat the exam again had found it easier second time around.
“The ones that seem to be doing not quite as well, seem to be the ones that have much deeper knowledge of the regulatory environment they operate under,” Marshan said.
“The feedback we’re getting about some of the questions being ambiguous is probably not far from the truth – I haven’t sat the exam myself, so I can’t comment from that perspective.
“But the feedback we’ve been getting is that you can’t overthink the questions; you have to read what’s on the page and answer what’s on the page, not extrapolate that out to your entire knowledge of how the regulatory and legal environment operates.”
The June exam would be held on 11-16 June and would only be done by remote proctoring; the deadline for registrations had been extended until 29 May.