Limited adviser sympathy for colleagues who fail final FASEA exam
Financial advisers who fail this month’s final Financial Adviser Standards and Ethics Authority exam should not expect widespread support for further concessional treatment, with many of their peers saying they probably head for the exit.
Suggestions by the Association of Financial Advisers chief executive, Phil Anderson, that failed advisers should be granted a period of grace to facilitate an orderly exit for both them and their clients were met with a broadly negative response from other advisers.
While some advisers agreed that some time should be granted for exiting advisers to refer their clients to new advisers, a vast majority of financial advisers told Financial Newswire that the Government had already extended the timeframes around the adviser exam and that should be enough.
“There’s been extension after extension for the deadline. What’s the point of drawing a line in the sand if you keep rubbing it out and moving it?” one adviser said.
“Grace period? There been enough grace periods,” another adviser said. “Time to move on and fast. The financial planning ‘industry’ is fast approaching the day where it transitions to a profession. One of the hallmarks of a profession is self-regulation. These ‘few’ who did not sit the exam and those who failed repeatedly are in the way.”
“There’s been enough delays and grace periods, it’s time for them and the bad regulation to go. The 14,000 that have already gone should provide some indication for those remaining of the appropriate exit strategy.”
Other financial advisers responding to the Financial Newswire story pointed out that the first exam had been held in June 2019 and suggested that all advisers had had more than enough time to pass the exam.
While recent data from the Financial Adviser Register (FAR) has suggested that financial adviser exits have slowed and almost halted, a new surge is expected when financial advisers receive their exam results in September.
Around 890 people are considered eligible to sit the final exam and pass rates have tended to decline over recent sittings, with only 43% passing the May exam.
I’m not a religious person but I do remember something about “casting the first stone.” Firstly at my mature age, it took me three attempts to pass the fasea exam. Most advisers over 50 would never have sat the type of exam that fasea imposed upon us. Specialists were ignored under fasea, Seventy three questions in the 3 1/2 hours and barely 3 questions about my specialty – risk advice. The stockbrokers had the same argument.
Specialists like me had to develop exam techniques to transpose the scenarios in a poorly worded question about investments into a question about life risk and then address the ethical dilemmas, always remembering that the three choices for answers had two correct answers, but one of those answers was more correct in the eyes of the examiner.
Time in those exams is of the essence Which is really interesting, as one of the underlying principles in fasea is that advisers should be more contemplative of their actions in every situation i.e. take time to sit back, and ask yourself “what is the best I can do for this client, do I have any conflicts?”. You don’t get that time in 2.5 minutes per question under the hammer.
I keep asking myself why would some of my fellow advisers would be totally unsympathetic to those who fail the exam. We live in a world of trolls and keyboard warriors who are capable of expressing the nastiest of thoughts to a keyboard, but would never have the guts to make that comment face-to-face. I suspect that some of them think there will be even less advisers around, and thus more opportunity for them – greed is good!
But finally and regrettably I’ve come to the conclusion there is an AGEIST argument going on here, with a subset from certain degree-qualified newby investment advisers in the industry that want to flush out people with a large client basis that they consider to be “old lifies “. It’s elitist and it is BS. I would also remind some of the more arrogant contestants in this debate that there was/is no diploma or degree currently available for specialists such as life risk advisers. At best as a specialist I might be expected to know there was a financial product called a “derivative” but I should never be expected (nor am I licensed) to have a need to talk to my clients about that product and explain its inner workings. But at the risk of being accused of hubris, I’d like to challenge any holistic adviser to debate “capability clause” in an income protection product.
When I entered this industry I took every opportunity to do any non-insurer industry training course put on by the LUA/ALA/AFA because that was all that was available. And yes, all of those training courses had ethics components. Then, at one stage, the ALA combined with Deakin University to produce a so-called Life Insurance Diploma, but it failed because it lacked endorsement from the insurers, and like its FPA equivalent, provided poor value. In retrospect, having studied the material recommended by fasea, that ALA Diploma must have been put together by the grandparents of the academics who were behind fasea, filling their pockets promoting their courses- both were full of gobbledygook.
As to complaints about grace periods, let me ask you this. You been teaching your 17 year old daughter to learn to drive. She keeps going off to be tested and failed on some sort of technicality, such as the order in which she checks her mirrors before engaging the gear to pull out onto the road. Get that wrong then you fail each time, BUT no one says you’ve only got a number of attempts to get a driver’s licence, and you can do a hell of a lot more damage with poor driving than poor advice. Eventually of course you pay to send your 17 year old daughter off to be professionally trained, and those instructors know exactly how their customers might potentially get “failed” by the examiner, and have briefed them accordingly.
Neither examination proves you are more skilled or more “ethical” OR knowledgeable as a road user or an advisor, once you get out into the real world: all you’ve done is learn how to pass the exam. Surviving first, then gaining experience without harming anyone, is the real game!
Awesome response to some ignorant folks out there. Some have an elitist perspective unfortunately. I love the notion that one adviser in the article claimed that “Time to move on and fast. The financial planning ‘industry’ is fast approaching the day where it transitions to a profession….. Well that person is behind to begin with, I’ve been acting as a professional from the outset only those who have been viewing things through a different lense could make such a nonsensical statement. They are the ones that should be exiting. Three cheers to you!
I am the adviser who commented as above. 35 years in the industry. Own AFSL. Fully qualified in terms of FASEA through to beyond 2026. Aged 60…CPF qualified in the 90’s, degree qualified in 86.
It’s not me who is behind.
You might have been acting professional from the outset, as have I. However, we need to be recognised and treated as professionals to claim to be professionals. If we are to achieve these standards, perhaps we can get rid of the bad regulation?
The Australian Council of Professions defines a professional as:
Someone who adheres to ethical standards and who hold themselves out as, and are accepted by the public as possessing special knowledge and skills in a widely recognised body of learning derived from research, education and training at a high level, and who are prepared to apply this knowledge and exercise these skills in the interest of others.
A code of ethics governs the activities of each Profession. Such codes require behaviour and practice beyond the personal moral obligations of an individual. They define and demand high standards of behaviour in respect to the services provided to the public and in dealing with professional colleagues. Often these codes are enforced by the Profession and are acknowledged and accepted by the community.
This is where we are headed if we are to truly become a profession.
Yep so at the moment the only thing we’ve got is a bunch of individuals that think they’re professional (they might be too) meeting the first element of that definition. As per the second element, let’s remember that the Royal Commissioner said the FPA and the AFA were incapable of being code monitoring bodies, so that means the second part of your definition won’t be able to be achieved because the FPA and the AFA are incapable of being any type of governing body and we’re a long way off becoming self-governing. How’s that working out for you? The final element of that definition is the public perception of you being professional and having that skill set, I can tell you, that is a long way off. So any public social media page talking about planners would put you somewhere between a used carsalesman and a very skilled electrician. As an Adviser with 25 years of experience seeing advisers putting there wallet first, their peers second because they can’t be bothered getting minimum educational standards, or because they signed up with AMP or MLC ripping off clients, I can’t wait to see the end of them. Good Riddance.
A Code of Ethics enforced by the profession isn’t dependent on AFA or FPA. While AFA and FPA have their own codes, they were never effectively enforceable when members at risk of sanction could simply just leave the association. Those codes have become largely obsolete with the introduction of the FASEA Code. In theory, enforcement of the FASEA Code is actually done by the profession, via the FSCP. In practice, enforcement is still heavily controlled by bureaucrats, so there is more regulatory reform work to be done there. But we are well down the path to becoming a profession as per the Australian Council of Professions definition. There is zero dependency on AFA or FPA to achieve this.
We are so far away my friend it’s not funny. The FSCP is a panel put together by the Regulator ASIC. That means I am highly likely to follow the law out of fear not because it’s right. The FSCP are not my peers, nor did I appoint them, or elect them, or have any free choice, or free will to join. Professions have “peers” sitting in judgment of their conduct. We will not have that Profession until peers sit in judgment of our actions and we follow a code designed by participants, not out of fear of fines by some Government appointed panel but my peers say my behaviour is wrong. That is the third and essential element in your definition. We will never become a profession because of that. Merely skilled professionals working in an industry.
Peers don’t have to be directly elected to still be peers. And professional codes don’t have to be designed purely by participants. Input from broader stakeholders can be a good thing. After all, one of the other defining aspects of a profession is a commitment to the broader community.
I agree that FSCP is still too heavily controlled by ASIC, and the code needs refinement (particularly Standard 3). But to conclude that we will “never become a profession” seems unnecessarily pessimistic.
Do you have any practical alternative suggestions if you don’t think professionalism can be achieved via evolution of FSCP and the FASEA Code, and you have already ruled out AFA and FPA?
Yes, your example about the daughter, and the order of checking mirrors sums up the FASEA experience perfectly. However, you’re an idiot for failing to recognize that FASEA is nothing more than a culling exercise and for thinking that someone was looking after you and would recognize an injustice. Because it’s a culling exercise, failing the exam once or twice could naturally be expected. but really, No other industry in Australia would put up with that type of treatment. Every single industry would demand the CEO’s and boards of their so called representative bodies like the FPA, the AFA to step down because they care about their industry and their clients. The Accountants are trying to boot the CEO of their association because of there board won’t publicly name the members that cheated on a KPMG exam, yet what’s it take for the board of the FPA to step down? Advisers just don’t give a rats because they’re too self-centered, they make choices based on their wallets rather than their peers and clients, and that’s why we’ve got FASEA’d and we’re such easy targets. They just don’t care. So I won’t have any sympathy.
Being such a blowhard and calling Old Risky an “idiot” doesn’t give any reader here the impression you are anyone worth listening to about anything. Old Risky is one of the most experienced and very best risk specialists Australia has ever seen, a highly regarded professional (on all levels) and capable of cutting through any steaming pile of BS on these and other electronic pages with laser guided focus. I’ve always found his insight relevant, clearly enunciated and prescient. In other words, someone to be respected and listened to . . . very much unlike your surreptitiously suspect assertions.
His comments reak of “I” “we” and “him” I suspect he is the reason “we” are in the mess we are in and I hope the door dosen’t hit him on the way out. You might hear the words “no longer meets community expectations” I suspect YOU might want to reflect on that.
You can “suspect” to your little heart’s content, ‘Curious’, however it does not justify personal attacks on fellow advisers with whom we should be working together in support through this difficult time. I ‘suspect’ you’ve appeared on these and other pages under various labels as I’ve seen your particular trademark of combination insults to other advisers i.e. your objections re the pronouns you list and your fave “don’t let the door hit on the way out” – a bit tired & overused now, time you updated your toxic repertoire methinks.
Only in financial planning can you specialise before doing generalist training. As has been pointed out many times, the exam covered 3 main areas – corps law, advice construction (incl suitability of advice & client behaviour) & ethics – that should be common to all advice, whether that was holisitic, just insurance or just stockbroking.
To me most advisers expressing dissatisfaction with the calls for extensions, grace periods, cancellation of the exam altogether come from a small group of advisers who for a variety of reasons agree on the need to lift standards for ‘others’, but dont see the need to lift their own standards. They’ve put the exam off until the last minute and then claim all sorts of excuses as to why they never did it earlier – too busy, have kids, then covid, etc etc – and then expect dispensation when plenty of others (the majority) with similar issues have just got in & got it done.
It’s the same with the educational upgrades. Plenty of people whining about lack of recognition of experience, ongoing CPD, etc. When a new adviser has to do a full 24 subject degree and an existing adviser only needs to do a max of 8 subjects in a grad diploma, then there’s 2/3rds of a degree wiped away in recognition of your ‘experience & CPD’. Yet plenty will still delay & whinge and when the already extended 2026 deadline is fast approaching they’ll be after more extensions to cater for their inaction.
It’s ironic that people come to us for our ‘planning’ abilities, yet so many can manage to put in place a plan for their continued employment in this industry/profession. I dont think that’s got anything to do with greed or age-ism…
Hi Once again someone who cares about the client because that is what old advisers are about Most were capable of answering questions on the spot with the client Specially in risk sales they are not worried about what degrees you have but what you can explain and in most cases a confident sale is made then or a second appointment The client is not interested in the endless paperwork given to them and most cases will end up in the bin I have passed on my business to younger professional advisers because of my retirement who have every degree possible and the feed back that is coming back to me is lovely people but please come back If they did not have a computer for reference they were stuffed to explain Now i am not saying that this applies to everyone but a length of time in the industry which now is being lost due to the ongoing B/S is worth gold to the normal public I see now according to a survey from TAL that a need for training in emotional intelligence for claim declinatures is required WOW In my 50plus years i did have one problem because of the fact i knew my F job and i did not have pass worthless exams All the best to the industry You will need it and three cheers to the older brigade
I agree with most of the points you make john and thank you for your time in making them as they’re important ones. I’m a retired risk specialist and share many of your thoughts. I do have one favour to ask though – next time please throw in a bit of punctuation as the lack of full stops in the right places was doing my head in, LOL! Cheers and keep the faith!
From your comment I took it that you have passed the exam. You did what needed to be done in order to pass the exam. Not having done so is not a reflection of the exam or those that passed it successfully, it is however a reflection on those that have not done so. They have had since June 2019 to August 2022, if they have not worked out how to study in that period I don’t want them advising.
Scott, Re-read Old Risky’s comment where he referenced the example of the 17 year old learning to drive. Just re-read that part at the end of his comment, slowly. Then let us know if it is the system making it difficult or the students. Get back to us on that, eh?!
You have some serious problems if you can’t recognize an exam designed to cull rather than test and adapt. Re-read my comments where I said it’s quite normal for someone to fail that style of the exam once or twice. and note my comments that you have to be an “idiot” if you can’t realise that someone is out to cull you. Three years to prepare that is more than enough time. Old Risky should have changed that to say the daughter had 10 years have a go. Yes ASIC wants you and I eliminated adapt. The problem with Risk Advisers is they’ve spent all their life being brainwashed and on the pay by corporations thinking “they’ve got their back” and mysteriously AMP that spent 40 years raping customers turns and does a number of them too and they think why is all this FASEA mess happening to me. Can I suggest you watch the Movie “A few good men” where the soliders are ordered to do something but don’t have the emotional intelligent to recognize they’re doing wrong. You and old risky remind of that solider where at end they’ve recognized they’ve been doing wrong because like I said your behavior “no longer meets community expectations”. Always fun talking to Advisers that operated at minimum levels for 40 years.
More personal attacks. It doesn’t do anything but belittle you. This is not the time to attack fellow advisers, anyone with “emotional intelligence” can appreciate that. If I was you I’d feel ashamed at my behavior on these and other pages I’ve witnessed you on recently. Please don’t come here unless you have something positive to contribute as this negativity against fellow advisers is the very last thing advisers need right now. Take your hate elsewhere please, or, better still do some work on yourself to eradicate it completely. You’ll be better for it.
Thank you Oldie, Such a well considered and informative response, as usual. You put many things in perspective so much better than my sometimes rambling and fragmented attempts 🙂 I find your comments instructive and frequently responsible for filling in many gaps in understanding around complex matters. Thanks again!
Disappointing to read the comments of some of the people who have passed the micky mouse exam. Let’s not worry about your brothers and sisters. Empathy is a prime requisite in our business and it appears that some of our people have none. Therefore if you think passing the exam assures you a bright future ,think again. Many good advisers have disappeared and worse still left their clients as orphans. All because of a carefully designed culling exercise.
Well said Dusty!
This is where the “rubber hits the road”.
If the FASEA exam is a “mickey mouse” exam then why can’t the 900 who have had multiple attempts pass this exam? Most advisers had no idea of what the questions might be and they passed first time. These 900 have seem the exam as many as 3 or 4 times. Do I feel sorry for them? Absolutely. It is devastating to lose a career that you have been engaged in for many years. Devastating to consider that clients who have been relying on you for advice may have to find another adviser (if they can). Please pass your exam!
But…and heres the main point of this “lack of sympathy” perspective which I believe is more of a case of “patience” having worn thin. We have shockingly bad regulations that make advice extremely expensive and slow to deliver with all the hoops and regulations we have to jump through currently. We are NOT seen as a profession by the community despite possibly behaving like professionals. We have done the study, done the CPD, held ourselves to higher standards and accountability but the community and regulator (ASIC) does not see us as a profession as yet. So, we remain too expensive for many to access advice due to these bad (over) regulations. Many Australians who need and seek out advice cannot get it or cannot afford it. Advice seems to be only for those who have a high net worth.
Many potential entrants to the burgeoning profession are dissuaded by existing ‘professionals’ from entering the carreer because of the bad regulations. I wouldn’t want my children in our ‘industry’ as it stands.
This is where the advantages of being a profession come in. The regulator (may) begin to recognise us as a profession. The regulation of our industry then becomes more “principles-based” and can become self-regulated like the ‘other’ professions in Australia. For this to happen, our standards, our ethics, practice and skills must become widely accepted and acknowledged. We cannot do this if we are not regarded as a profession. We will be unable to remove the bad regulation until we can self regulate. Hence. advisers remaining in the industry/profession will continue to suffer mental stress and burnout. Potential clients will still be unable to access advice at a reasonable cost and distrust of financial advisers will remain.
Sadly, and I mean this sincerely, I do feel for the 900 who are standing in the way of millions of australians being able to afford and access professional financial advice. Good luck for your up-coming exam, I’m hoping that you all pass.
Michelle Levy (QAR) has already stated that she wants to see “Principles-based” regulation rather than carve outs for accountants and others who can’t pass the exam. This should be seen as a positive step in our evolution into becoming a profession. Let’s not screw this up given 15,000 of us have signed on for and passed the “mickey-mouse” exam . To the 900, the other 15,000 do want you to pass the exam, so that we can move together towards a future with better regulation and higher levels of accepted professionalism. Lets agree that it’s not okay that 73% of financial advisers are experiencing high levels of burnout from stress; 67% experiencing levels of depression; and 61% having poor sleep due to stress. Better regulations will ultimately alleviate this and make our profession something we can all be proud of, and that the community we serve can trust and embrace.
The FARCE-IA exam is indeed a crock – a true “Mickey Mouse” exam. It was ill-conceived, badly written and poorly executed. It did nothing to prove ‘ethics’ and that was supposed to be the premise upopn which it was born. Nothing about the whole sordid situation was consistent. Not the reasons to have it, not the people who pushed it (for self-absorbed reasons), not the structure of the exam and certainly not the way it was forced on us and not the way it was marked without feedback. In short, the exam was a travesty and comedy or errors by ANY objective and independent measure.
The exam proved that those who passed were good at exams and have a good memory – end of story. Anyone who says it fulfilled it’s intended purpose of being some sort of ethics exam is sorely and sadly misguided.
You state in your comment, regarding ‘professionalism’, “Potential clients will still be unable to access advice at a reasonable cost and distrust of financial advisers will remain”. Well, how’s the market’;s general perception of lawyers coming along? Lawyers are, by your so-called definition ‘professionals’. I’m sure you’d agree they rate worse than used car salesman. I’ve dealt with a few in my time and I can tell you that some of them are as slimy as eels. There are of course good ones, ethical ones, just as there are indeed good and ethical used car salesman. We are, however, talking about general perceptions and as recognized ‘professionals’ the lawyers as a group are at the bottom of the harbour. So, I have no second thoughts that in the mind of the public, having our square ‘ticked off’ as professional in the regulator’s book will not make us such OR improve our image or trust-ability noticeably in the perception of the public. Just look at the lawyers . . .
I’ve no doubt your heart is in the right place Mr. Anti-bad Regulation, however on these points of your assertions you need to review.
Thank you Old Risky for your post. My husband just failed the FASEA exam and will have his license taken away from 1/10. After reading through all the posts I wanted to add another perspective. My husband is an older Planner (60) working for a large Superannuation firm. He loves his job, is respected by staff and Clients and has always passed his audits and kept up with compliance. His Company have an option for Clients to leave reviews and my husband has received the most 5 star reviews with comments stating that he explained and assisted them better than any Planner they’d ever spoken to. Naturally I’m biased and I’m not a Financial Planner but I simply cannot understand how this exam can decide that my husband is not good enough to do his job when clearly he’s doing a great job. Furthermore, it seems unfair that he has never been given the opportunity to see his marked exam and learn from his failed attempts. I hear the posts from the accusers saying if he can’t pass the FASEA he doesn’t deserve to be in the Industry – from your perspective I’m sure you are right. My perspective is one of bewilderment and sadness for an honest, hard working man who simply wasn’t academic enough to pass this very difficult and challenging exam. He will be missed by Clients and all the staff (especially the young ones) who constantly go to him for advice (I was told this by one of the staff).
Hi Debbie
Thank you for your perspective.
I know it might not sound like much but your husband is going to make a great mentor for the younger staff.
Sadly, he is one of many who have become collateral in this move from industry to professionalism.
It does seem like there might be some scope for him though if Michelle Levy’s Quality of Advice review gets implemented. I’m sure he’s aware of this. Don’t give up hope just yet.
Thank you for your kind response 🙂