How many advisers really passed the July FASEA exam?

Only 60% of 1,963 the Financial Adviser Standards and Ethics Authority (FASEA) exam candidates passed the exam in July, but the pass rate was even lower among those who were resitting the exam, according to Wealth Data.

The firm’s director, Colin Williams, said that out of a total of 1,963 candidates, 589 advisers resat the exam and only 230 passed it, bringing the pass rate down for re-sitters to 39%.

By comparison, the pass rate stood at 69% for first time exam sitters in July.

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Further to that, although FASEA announced that 16,030 advisers had passed the exam so far, Williams said this statement was not correct, as 310 adviser were “new entrants and may be authorised as a provisional financial advisers”.

“I take from this that 15,720 advisers have passed and a further 310 people have passed who may proceed to be an adviser,” he said.

Also, of 18,140 people who, according to FASEA, have sat the exam so far, 310 neither ‘current’ or ‘ceased’ advisers.

This would mean that some advisers had attempted and to date only 14,070 had passed and still held a current adviser role.

This meant adviser passes among advisers who held a ‘current’ status stood at 78.9%, Williams stressed.

“14,070 are active financial advisers on the Australian Securities and Investments Commission (ASIC’s) Financial Adviser Register (FAR),” Williams said.

“After a lot of pushing FASEA on the fact that not all advisers who pass the exam are ‘current’ on the FAR they are now recognising this issue.

“Previously there seemed to be an automatic assumption that everyone who passed was on the ASIC FAR.”

Source: Wealth Data 

There would be the exam sittings in September and the final one in November whereby anyone willing to have a go would be able to sit, as opposed to waiting out three months.

Additionally, in 2022, advisers who had failed at least twice by December 2021 would have until September 2022 to pass.

“Given all of this, it is quite hard to predict the total number of passes and in return the number who advisers that will remain on the FAR,” Williams said.

Wealth Data’s latest weekly analysis of adviser movements showed the number of actual advisers continued to decrease to 19,032, with NTAA (SMSF Advisers Network) and IOOF accounting for the biggest losses, being down 22 and 21 adviser roles, respectively.

“It is interesting to note that all 22 losses at SMSF Advisers Network, a limited SMSF advice group, are showing that none switched to other licensees and none appeared to have passed the FASEA exam (using 11,000 known FASEA exam pass result as of May, 2021),” Williams said.

“Whereas IOOF is showing (-25) resignations and of those, 15 have switched in the same time period to alternate licensees and six had passed the FASEA Exam (as of May).”

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Not surprising that SMSF specialist advisers (who are primarily accountants) are relinquishing their AR status and not bothering with the FASEA exam.

ASIC, through its inaction, has made it quite clear that unlicensed accountants can give whatever dodgy financial advice they like without any need for disclosure or client best interest. However accountants who are trained and qualified and licensed to give financial advice, will be mercilessly and indiscriminately persecuted in the same way licensed financial advisers are. It's a pretty simple choice for accountants.

100% agree, Accounts have given ASIC the biggest GET STUFFED ever.
Accountants are totally over ASIC and exiting on mass from the strangulation of BS Regs and Red Tape costs of AFSL Advice.
Accountants are much more happily going back to bucket loads of illegal AFSL Advice with:
- zero AFSL compliance
- no AFSL fees
- no ASIC Levy (=double taxation)
- no BID
- no SoAs
- no extra CPD
- no AFSL PI costs
- no AFCA
And most of all NO ASIC
Any Accountants left in AFSL world are clearly doing themselves a dis-service.

Just be a lawyer, assist clients with insurance claims, take 10%. Seems more legit!

I find it difficult to comprehend why an extension is offered to those that have failed "at least twice". Surely this would indicate either an inability to pass, an attitude that conflicts with the goals of FASEA (whether or not you agree with those goals), or a lack of commitment to the further study that is required for them to pass (even if you disagree with the content of that study). Is this the type of adviser the industry is looking to support?

it's the stupid government who doesn't want a huge number of advisers exiting by 1 Jan 2022 and making them look bad before a coming election.

it's a very easy exam to pass, most financial planners are passing it, it's being failed by a lot of stockbrokers, and timeshare people (persons? whatever you call them) and by the vast majority of accountants who don't know anything about AML/CTF, privacy act, financial advice regulatory and legal obligations, applied ethical and professional reasoning and communication and financial advice construction.

a lot of these very foolish accountants have thought in the past that the SoA and all 199 pages were fiction concocted by the financial planner to charge clients high fees.

Comprehension can be a difficult thing for some.

To access the 9 month extension an adviser needs to fail the exam twice. If you are going to leave anyway, you may as well pay the fee, sit the exam without any preparation, knowing you'll fail. However, you will be able to collect 100% of your revenue for an extra 9 months... An obvious outcome and a slap in the face for those advisers who have completed the exam.

Let's be clear, the exam isn't difficult and I don't accept the argument that only holistic advisers can pass. 95% of the exam relates to the Corps Act, Regs and the Code of Ethics. With a bit of study, someone with zero financial planning experience could easily pass this exam.

I suspect this was the case for a few no doubt. Pay the $500 (or $1,000 if also doing the next exam) and practice for another 9 months then head off. I heard from 2 advisers who had no intention of sitting the FASEA exam who were more than happy to pay to stay on for another 9 months. Imagine the failure rate for the next exam.

I wouldn't go as far to say it's easy. Here is the kicker. Next year, for those failed twice will smile when the exam gets scraped and walked back. All those who passed will say no way this will happen. It will, you watch. It will just be the 2026 master's degree that's needed.

Sadly completing a FASEA exam does not alter a dodgy persons Ethics one bit. It is once again a money grabbing system to add to the pile of extra overheads that Advisers now have to pay. Sadly history has shown us that their are dodgy un ethical people in All professions and by completing an Exam will not change the spots of the Leopard

Who are the advisers who caused the Hayne Royal Commission into misconduct by the big institutions? Bank employees on incentive bonuses. Who told them to rip off bank customers for their incentive bonuses? Bank executives including David Murray who designed the Industry Levy model that was passed into Legislation titled of the ASIC Supervisory Cost Recovery Levy (Collection) Act 2017.  Are bank employees on incentive bonuses and Bank executives required to be registered in ASIC Financial Adviser Register? No. Are bank employees on incentive bonuses and Bank executives being subjected to ASIC Industry Levies? No. Are bank employees on incentive bonuses and Bank executives being subjected to FARSEA exam requirements? No. Are bank employees on incentive bonuses and Bank executives protected legal cows by the Liberal government? Yes. Since World War 2, has there been an institutional bias to blame advisers for the failings in financial services when institutions were making excess profits? Yes. Did the institutions capture the politicians for FARSEA exam requirements and ASIC Supervisory Cost Recovery Levy (Collection) Act 2017 when any litigation money received, goes into general revenue but not to offset the impost of ASIC Industry Levies on small financial advising practices? Yes. Are those listed in ASIC Financial Adviser Register with small financial advising practices being triple abused in the name of Law? Is ASIC a functional regulator as intended by Legislation 20 year ago, or the instrument to inflict abuse on small financial advising practices in the name of Law?

It is patently incorrect to say the exam is "easy".
For an experienced financial planner it may be routine, as it is principally about financial planning principles with some new areas around standards, but many licensed advisors outsource internally or externally the planning side of advisory work, concentrating purely on investments, or tax accounting, or estate planning.
In addition advisors that have transitioned relatively recently from other professional areas to retail advice, have limited working knowledge of planning, hence they outsource early in the transition process.
Fasea have designed it with many tricks and traps, questions in the negative, answers open to legal interpretation. Saying to candidates in a webinar "don't take real life client experiences into the exam" focus on the theoretical. This highlights what a farce the whole exercise has been. For fasea and their personnel now all on borrowed time it's probably not been missed that the labour opposition thinks the same, speaking to that in the senate. Perhaps some of their CVs will be doctored to remove the fasea botch up - hey isn't that unethical!!
The stuff up has been even bigger than what occurred in the UK.

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