FASEA has released exam results from the sixth Financial Advisers Exam held in June 2020.
Result highlights include:
- due to COVID-19 restrictions, the exam was held online from 11 to 16 June
- 84 percent of candidates passed the June exam (compared with 79% in April)
- 2,282 advisers sat the exam compared with 470 advisers sitting the April exam
- the exam is marked to a credit standard and the pass rate varies with each exam
- the exam was subject to ACER’s comprehensive marking approach and was set at a consistent standard to prior exams
- 10,239 advisers have sat 6 adviser exams held to date
- overall, 85% of advisers who sat the exam have passed, representing 40% of advisers on ASIC’s Financial Adviser Register (FAR).
“FASEA is pleased to present the outcomes of the sixth exam and congratulates successful candidates on completing an important component of their education requirements under the Corporations Act during the current extraordinary circumstances. Over 10,000 advisers have sat the exam with close to 9 in10 demonstrating they have the skill to apply their knowledge of advice construction, ethics and legal requirements to the practical scenarios tested in the exam.” FASEA Chief Executive Officer Stephen Glenfield said.
Whilst the average pass mark of 85% across exams held to date demonstrates a strong performance by advisers, analysis of exam data has highlighted areas for improvement, particularly amongst unsuccessful candidates.
Exam question areas advisers have underperformed in are set out below (categorised by curriculum areas).
Financial Advice Regulatory and Legal Requirements:
- Advice documentation (including Financial Services Guide (FSG), Statement/Record of Advice (SOA/ROA), Product Disclosure Statement (PDS) and Fee Disclosure Statement (FDS)) – the exam tests an understanding of when to issue these to clients and what is required to be included (eg. Fees and disclosures).
- Advice Types – understanding the difference between personal advice, general advice and information and how they apply to different client scenarios
- Privacy Act – understanding the difference between personal and sensitive information and whether consent has been appropriately obtained before using information
- Anti-money Laundering (AML) Act – identifying potentially suspicious transactions and required reporting in client advice scenarios
Financial Advice Construction:
- Identification of client biases and how they may influence clients’ financial decisions and/or investment choices
Applied ethical and professional reasoning and communication
- Understanding the application of the Code of Ethics and the Corporations Act to advice scenarios.
Over 1600 advisers have registered for the August exam, to be held in metropolitan and regional locations and online from 13 to 18 August. The Melbourne exams will only be online due to COVID-19 restrictions.
Registration is open for the October exam, to be held from 8 to 13 October and the November exam to be held from 5 to 10 November 2020. Subject to COVID-19 restrictions, the exams will be offered in physical locations as well as online. Over 600 advisers are currently registered for the October exam and over 300 for the November exam.
To assist advisers preparing for the exam FASEA provides preparation resources, including practice questions, online here. Practice questions are regularly updated on the FASEA website or through the advisers exam account. Feedback received from past re-sit participants in the Exam indicated these resources were useful for their Exam preparation.
The FASEA website also provides information on registration (link).
Additional Background
Section 921B (3) of the Corporations Act 2001 requires advisers to pass an exam approved by the standards setting body. The Act requires existing advisers to pass the exam before 1 January 2022. New entrants are required to pass the exam before becoming a Provisional Relevant Provider.
The exam tests three domains of knowledge and skill:
- financial advice regulatory and legal obligations
- applied ethical and professional reasoning and communication: and
- financial advice construction
FASEA, with the support of the Exam administrator (ACER), has successfully offered 6 exam sittings to date on more than 30 exam days and 341 exam sessions. Since June 2019, exams have been offered in capital cities and also in 22 regional locations across Australia (with the April and June 2020 exams being remote only exams due to COVID-19 restrictions).
Candidates are required to demonstrate professional reasoning and apply knowledge acquired to financial advice scenarios at AQF7 level of reasoning.
FASEA is offering six exam sittings in 2020 and 2021. Unsuccessful candidates may re-sit the exam.