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ASIC powerless to change FASEA exam

Mike Taylor2 March 2022
Balancing pass and fail

It will be the Government not the Australian Securities and Investments Commission (ASIC) which delivers strongly sought changes to the Financial Adviser Standards and Ethics Authority (FASEA) exam regime.

The Association of Independently Owned Financial Professionals (AIOFP) has told its members that it will be immediately lobbying all political parties for those changes to be implemented after the forthcoming Federal Election.

AIOFP executive director, Peter Johnston foreshadowed the lobbying effort at the same time as relaying instructions from ASIC around financial advisers using a scribe when sitting the FASEA exam.

In doing so, he said that the broader question around changing the exam to reflect the different requirements of risk advice, self-managed superannuation fund advice and stockbroking could not be addressed by ASIC.

“The sought after Exam changes we are lobbying for where the ambiguity and ‘kill Adviser theme’ are removed along with incorporating questions around the Advisers field of expertise cannot be addressed by ASIC [ie Risk, SMSF, Stock Broking, general financial advice],” Johnston’s e-mail to members said.

“ASIC are bound by the format passed onto them by FASEA. Any change to the Exam format however can be at the discretion of the Minister.”

“We will be immediately writing to all political parties requesting their assistance post – election to help save the career of 3,000 Advisers who are struggling with the unfair aspects of the current Exam.”

“Unfortunately, the stress of passing this Exam has been responsible for 10 suicides we know of.”

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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2 years ago

FASEA was a disaster and now the Government that brought us that disaster is promising it will make things better. Really?

Alan Tickle
2 years ago

I competed the Kaplan unit on Professional Standards & Ethics before passing the FASEA exam first attempt BUT I left the FASEA exam with no idea or confidence that I had passed. The labelling of an ethics question differed from what Kaplan presented, with questions in the exam not testing technical competence. Questions on currency limits for a Chinese national and on Cryptocurrency were so far removed from testing ethics and competence, I left feeling like the exam was designed to beat up advisers. The relief when I scored a pass was mixed with surprise and ” are you kidding” I fired off a complaint to my local Federal Member over the content of the exam. The unlevel playing field across professions particularly real estate sales and charging regime and gold plating by lawyers, ought to draw closer scrutiny, rather than punish advisers for the failure of ASIC and certain AFSL holders for inadequate supervision not to forget the changing goal post of ASIC to suit the political climate.

1 year ago
Reply to  Alan Tickle

This is so true. Questions on which document is delivered next, when it was not stated what documents were already previously given to the client is highly ambiguous also.

Old Risky
1 year ago
Reply to  Alan Tickle

I am a risk adviser of some 30+ years. I sat that exam 3 times before I passed. The amount of study and preparation I did effectively shut down my business for the 2 months preceding each exam. I used most of the exam preparation services except Kaplan and ultimately passed to the efforts of the good folks at Knowledge Shop, who provided an excellent moderator. I happen to think I’m pretty au fait with the Corps Act and FASEA standards and I had the background of being a licensee for 5 years, yet I was cheap meat for FASEA for the first 2 exams I sat.

The key takeaway that I learnt from the Knowledge Shop folks was that I had to abandon any of the lessons and learnings that I’d gathered over 30+ years of advising, otherwise I would be totally misled by the totally make-believe scenarios put up by examiners whose sole objective was to eliminate advisers and who clearly had never practiced in any form of financial advice. I had to stop myself saying “that scenario could never happen”, after reading a scenario in which there were 2 correct answers, but only one was the answer that FASEA required for a pass.

As a risk only specialist I was at a severe disadvantage. In each exam there was 73 to 75 questions and in each exam only 3 of those questions used a risk based scenario. Like Alan Tickle, I had no idea if I’d passed at the end of the 3 1/2 hours. I was confident on exam one but failed, but of course FASEA gave no indication of the mark achieved. In exam 2, I ran out of time and walked out totally lacking confidence. After the final exam in November 2021 I couldn’t determine if I had a chance or not. As noted there were no questions in the exam testing my technical competence and I remain of the view that you could pass this exam still be a danger to your clients in terms of developing strategies.

My overwhelming experience is of the arrogance of the folks charged with running FASEA, who consistently maintained that they were abiding by the FASEA legislation and flexibility was not an option. Such was that arrogance, that at one webinar put on by FASEA to assist previously failed candidates, the person conducting the webinar, when asked a direct question as to whether the Corps Act strictly applied or the Regulatory Guidance (RG) issued by ASIC could be relied on. The arrogant answer was that FASEA didn’t give a fig about RGs and all of their questions would be based on THEIR INTERPRETATION of the Corps Act. On top of that, we had to put up with Mr Glenfield and his constant public advocacy of the job being carried out by FASEA.