Stephen Glenfield, Financial Adviser Standards and Ethics Authority (FASEA) chief executive, defended the pass rate of the FASEA exam at the Money Management Future of Wealth Management Conference in Sydney today.
The inaugural exam saw a pass rate of 90%, which had drew criticism over whether it was too low of a standard.
Glenfield acknowledged he had been asked about this and assured that for FASEA, there wasn’t a goal for a specific number.
“For FASEA it’s not about the number, there’s no bell curve put in place to say this many will pass or fail, it’s all about competency,” Glenfield said.
“The exam is set at a level that a competent adviser should get through, if that’s everyone then that’s fantastic because that means everyone demonstrates competency.”
“For the 90% who got through I was thrilled, for the 10% who didn’t they get feedback with their result suggesting the areas they need to study for the next time they come to do the exam,” Glenfield said.
“You’re not left to flounder and you’ll have an idea of the areas you should dedicate yourself to going forward.”
He said the exam aimed to be a practical application across areas they expected competent advisers would already know, as opposed to technical questions.
“It’s across your financial advice, regulatory and legal obligations, it’s about applying ethics to scenarios, and understanding the client,” Glenfield said.
“In sitting the exam, you’ll be given a scenario and the questions are practical applications of regulatory requirements, ethics or client behaviour to that scenario.”
Comments
The key here is to know the law. If the FASEA exams achieve that, it has met it's objective. From what I have heard, each exam can be modified (scaled) according to the degree of difficulty for the particular group going through. ie some questions can be more confusing (or not as clear as they ought]. Scaling of results is normal practice in education circles.
Maybe, just maybe financial advisers aren't a bunch of morons. Maybe the requirement of having everyone complete between 30 and 50 hours per year of professional development combined with the constant reading and research required to be competitive let alone competent means that advisers are actually doing a good job overall?
What would have been an acceptable failure rate for the naysayers to be happy?
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