If you are currently working as a financial adviser, or looking to become one, you should be aware by now that all advisers will need to pass an examination conducted by the Financial Adviser Standards and Ethics Authority Limited (‘FASEA’) in order to continue or begin practising as a financial adviser. Some advisers have taken the Financial Adviser Exam already and others are looking to schedule theirs soon.
Here are some details you might like to know before taking the exam:
The exam will test the practical application of advisers’ knowledge on:
The exam lasts 3.5 hours including reading time of at least 15 minutes (so in reality you only have 3 hours and 15 minutes to answer the questions). It consists of multiple choice or true/false selected response questions and short answer questions and is “open book” for statutory materials. The open book materials are made available to you in digital format – you can’t take your own reference material in.
There are a minimum of 70 questions, split between at least 64 multiple choice questions (including true/false) and at least six short answer questions. All questions are likely to relate to a case study scenario presented to test your application of the relevant principles.
There will be no deductions for incorrect answers, so you should attempt to answer every question. The questions will be changed between each round of exams, so if you need to re-sit the exam you will receive a different question set at each subsequent sitting.
Exams will be marked to a credit level and candidates will receive a “pass” or “fail” result only, with no actual score provided.
Currently, you can only take the exam in capital cities and major regional areas. From 2020 it is expected to be made available digitally for those unable to take the exam at one of the designated locations.
The exam is a required component of the education standard that all advisers are required to pass to provide personal financial advice to retail clients in respect of retail financial products.
If you are an existing advisers (i.e. you were on the ASIC Financial Adviser Register (‘FAR’) at some point in 2016, 2017 or 2018), you have until 1 January 2021 to pass the Financial Adviser Exam. It is not advisable to leave your first attempt until the last scheduled sitting in December 2020.
If you don’t qualify as an existing adviser, you must also complete the Financial Adviser Exam. However, you can only do this part-way through your Professional Year (which cannot be commenced until all the education requirements of your FASEA approved degree have been fulfilled).
Everyone has their own way of preparing and studying, but here are some options to consider to help you prepare.
FASEA has recently released details for the 579 adviser who sat the first offering of the exam in June 2019. According to FASEA, over 90% of these advisers were successful in achieving the required credit level to pass the exam.
The next sitting of the exam will be between 19 – 23 September 2019, followed by another round from 5 – 9 December 2019. Registrations are currently open for both of these dates. Subsequent sittings will be conducted in February, April, June, August, October and December 2020. You should not sit the exam until you are confident in your ability to pass, however, you also need to remember that you must wait at least three months from sitting the exam before you can register for the next sitting.
And remember, if you are an existing adviser and don’t pass the Financial Adviser Exam by 1 January 2021, you will be removed from the FAR and can only be reinstated by fulfilling the requirements of a new adviser. All concessions for an existing adviser will be lost.