High number of advisers who passed FASEA exam do not practice
Recent data has found that of 9,995 advisers who passed the Financial Adviser Standards and Ethics authority (FASEA) exam there were 699 who were classed as ‘ceased’ on the Australian Securities and Investments Commission (ASIC) Financial Adviser Register.
The data looked at the numbers of advisers who have passed the exam and had given permission to be on the list.
Colin Williams, director at consultancy analysing adviser movements Wealth Data (formerly known as HFS Consulting), said if that number was to be grossed up to account for those advisers who have passed the FASEA exam but did not disclose their pass, it would go up to 946.
Also, according to the data, of the 699 identified as having passed the FASEA exam, but currently ceased, 621 left the industry after Jan 1, 2019, and there was a total of 784 resignations for this group of 621, highlighting that some lost their role more than once.
“Not all appear to be without a ‘job’,” Williams said.
“A small number work in advice support roles and have been released from the FAR. We have seen this occur a number of times as licensees cut back on the number of non-client facing advisers listed on the FAR.
“The median years experience for the group is 11 years and 495 had left the Financial Planning peer group. One would expect that many will be keen to get back into advice. This could cushion the overall forecasted loss of advisers.”
Williams said of the 13,500 advisers who passed the exam to date (post the March 2021 sittings), according to the FASEA’s published data, 9,995 passes were matched by Wealth Data against advisers and licensees on the FAR listing. This excluded timeshare and the majority of foreign exchange advisers.
To extend the forecast to year end, Wealth Data reviewed the current number of advisers expected to sit the May sitting – at 1,850 and estimated the number of advisers who would re-sit the exams by year end.
“To form the table below, we have ‘grossed up’ pass rates by 1.35 to make up for the advisers who have passed but not disclosed their pass on the FASEA Listing,” Williams said.
“Our estimate of remaining passes is a bit optimistic, but we feel there is now a concerted effort by all stakeholders including licensees, to help the remaining advisers to pass the exam. Using this 2,554 as a ‘pool’ of remaining advisers, we have shared this equally by the current pass rates at peer group and licensees levels to get to our final figures.
“To put this this into perspective, we have 9,293 actual adviser passes (showing as 9,493 roles in the chart) and the final number of actual advisers is forecasted to be 14,955.”
Source: Wealth Data
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