To date only 6,408 advisers have passed the FASEA exam, leaving another 16,000 plus “to still complete and stay in the industry”, says Adviser Ratings in its report on adviser movements.
While it is not clear as yet when the Senate will pass legislation extending the FASEA deadlines for exam completion (See: FASEA Extension Delay Likely) a special feature in Adviser Ratings’ Adviser Musical Chairs Report has looked at the FASEA impact.
It says that according to FASEA, 7,488 advisers have sat the exam and 86 percent or 6,408 passed over the last 11 months.
“The last exams were in February 2020 and those scheduled for April were cancelled. Pass rates have dropped consistently since the first exam, possibly because the most motivated and proactive engaged early on,” the report says.
Adviser Ratings says another 16,000 plus advisers still must sit the exam, and allowing for an average 15 percent failure rate on their first attempt, 2,400 advisers will require two attempts to pass.
“The four previous sittings have averaged 1,500 advisers each. Assuming the extension legislation is passed, there are likely to be another eight to 10 exam sittings by end 2021.
“Even then, that would represent 1,800-2,000 advisers for each exam, representing a 20-30 percent increase per sitting.”
The report also notes that at least the next exam sitting in June will be held remotely.
“Conducting exams remotely eliminates the inconvenience of travel and, arguably, should allow for substantially higher participation rates.
“But right now, with the … passage of the legislation gifting advisers another 12 months of breathing space, compounded by the intensity of supporting clients through the pandemic, we are probably going to see a drop-off in participation rates for a while.”
Lack of Feedback
The report also says that anecdotally, advisers are frustrated by the lack of feedback from FASEA on their performance where they have not passed.
“Guidance is reportedly generic and does not help advisers know where to focus their re-learning efforts,” it says.
“The apparent ease of completing the exam on-line may also not be as straightforward as it first seems. There are specific conditions that advisers must meet to ensure they are appropriately ‘supervised’, including downloading proctor software and installing mirrors to show the proctor what is around the adviser’s computer.
“And for some, the vagaries of internet connectivity mean that technical disruptions of more than 30 minutes require the session to be rescheduled,” the report says.