The Advisers Association is calling for the Government to consider removing the obligation for advisers to sit the Financial Adviser Exam as a further streamlining of financial adviser education standards.
TAA CEO, Neil Macdonald says the association believes the exam “…has served its purpose and is therefore fast approaching its use-by date.”
He says the real purpose of the exam, which financial advisers first sat in 2019 “…was to establish a level of professional competence in the overall population of Australian financial advisers at the time, many of whom did not hold the new FASEA-recognised tertiary qualifications.”
He notes that since then, advisers who remained in the industry sat and passed the exam by the January 2022 deadline, or the October 2022 extension, and most embarked on tertiary education to ensure they meet the requirement to hold a relevant tertiary qualification by the 1 January 2026 deadline.
Macdonald says that obviously, those who meet the experienced adviser definition “…are not required to hold a relevant tertiary qualification, but we have found that some of them have committed to further tertiary education anyway.”
In relation to those wanting to enter the profession, Macdonald says the fact they must study for tertiary qualifications at AQF7 level or above “…means their knowledge is already thoroughly tested along the way. Hence the exam should become redundant.”
…in essence, there will be no advisers whose competency needs further testing…
He says that in essence, there will be no advisers whose competency needs further testing.
“The exam therefore becomes an unnecessary additional expense for those wanting to enter the profession, who have already heavily invested in their education.”
TAA says the cost to sit the exam in 2023 is $1,500 per sitting, up from $540 plus GST in 2020, despite moving from an in-person to a wholly online exam.
Macdonald adds that in addition to the financial cost “…the requirement to do the exam and the timing of available exams makes it harder for people to do their Professional Year.
“These requirements are creating further barriers to entry at a time when the profession desperately needs new entrants and consumers want access to affordable, personal quality advice.”
He says removing the exam requirement will require a change in legislation, or ‘no action’ by ASIC.
