November exam problem areas highlighted
Understanding statements of advice (SOAs) and financial services guides (FSGs), the code of ethics, breach reporting, and identifying inappropriate advice have been key problem areas in the November exam.
Only 52% of those that sat the November Financial Adviser Standards and Ethics Authority (FASEA) exam passed – worse than the previous low of 60% in the September exam.
The other pass rates for 2021 were 67% in January, 69% for March and May, 60% in July and 61% in September.
Under financial advice regulatory and legal obligations, candidates underperformed in:
- Applying Chapter 7 of the Corporations Act to components of SOA/FSG;
- Applying Chapter 7 of the Corporations Act when evaluating case studies and identifying responsible providers’ obligations and breaches of those obligations;
- Demonstrating knowledge of legal requirements for both individual and licensee; and
- Applying Tax Agents Services Act 2009 requirements to scenarios and identifying compliance and non-compliance.
Under applied ethical and professional reasoning and communication, candidates underperformed in:
- Identifying consequences (practitioner, client, industry) of not acting in best interests of clients;
- Demonstrating knowledge and understanding of the code of ethics;
- Identifying sources of judgement and biases and their influence on financial advice; and
- Applying the code of ethics to ethical dilemmas and issues in scenarios.
Under financial advice construction, candidates underperformed in:
- Demonstrating an understanding of the context in which financial advice was given and requested and how this impacted decision making; and
- Identifying misconduct and inappropriate advice, evaluating why it was inappropriate.
Existing advisers who had sat the exam twice before 2022 had until 1 October, 2022, to pass the exam.
Existing advisers who had not sat the exam twice before 1 January, 2022, were encouraged by FASEA to contact their licensee to discuss next steps if they were yet to pass.
From 2022, the Australian Securities and Investments Commission (ASIC) would be responsible for exam and it would cost $948 to sit, compared to $540 plus GST under FASEA.
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”.
