Assyad David, director at Aged Care Steps

Most financial advisers have paid scant attention to aged care and are ill-equipped to answer questions on it in the FASEA exam, according to Assyat David, co-director at Aged Care Steps.

David, whose firm provides training and accreditation services on aged care financial advice, says the Financial Adviser Standards and Ethics Authority’s practice exam shows their intention to test advisers on their knowledge of the area – something she believes the majority are unprepared for.

She notes that the practice exam’s first question is a case study involving a client seeking advice on behalf of their elderly mother regarding moving into aged care.

“Most advisers are ill-equipped to answer this question because they have routinely placed aged care advice in the ‘too hard’ basket, which means there is a very real risk they will fail the FASEA exam,” David tells Professional Planner.

Existing advisers need to pass the FASEA exam by 1 January 2021, while new entrants to the industry will need to do so between completing their approved degree and commencing the second half of their professional year.

David reckons “around 80 per cent” of advisers will struggle with the exam. She says that Aged Care Steps has had “over 1850” advisers attend the Aged Care Steps accreditation, and while some may have undertaken other training the vast majority would not have had specialist education in aged care.

The reason, she expects, is that aged care is not particularly useful as a distribution channel for products.

“The majority of advisers have chosen to ignore aged care as an area of advice because they have not yet been able to transition from a product sales-based industry to a true advice model,” David says. “Many struggle to implement a business model which is truly fee for service based, which aged care advice is.”

She says advice firms typically have a single representative chosen to act as the subject matter expert, with the remaining advisers “switched off from learning anything about aged care advice”.

“This practice exam shows that now all advisers will need to invest in gaining knowledge of aged care issues to be able to support their clients.”

David explains that the aged care case study in the practice exam goes to the heart of best interests and ethics obligations, which FASEA is keen to test advisers on.

“Often the adviser may be dealing with the child of the person needing care (the client), who is the decision maker,” she says. “However, ethically the adviser needs to act in the best interest of the person going into care (the beneficiary of the advice) – who often they do not meet. There may be a conflict between the best interests of the decision maker and the beneficiary of the advice which the adviser needs to address adequately.”

David says that licensees “have an obligation” to address aged care knowledge and training for their authorised representatives. She also references the ongoing Royal Commission into Aged Care Quality and Safety, which is bringing new awareness to the issues involved. “It’s going to mean there are more and more people looking into aged care,” she says.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning.
4 comments on “Advisers ‘unprepared’ for FASEA aged care questions”
  1. Avatar Greg Sierocinski

    I agree with Kym. This is not an exam of product knowledge. It will be the application of an adviser in situations where conflict can occur from a members requirements and our best interest duty. And how this is interpreted and applied by the adviser. As such it will focus on the application of our ethics and application of the RG’s and Corp Law among the Life Insurance Act, etc for a successful pass. It will not be straightforward like a Uni or TAFE Exam at all.

  2. Avatar Kelly Mitchell

    The issue for our experience is in how difficult it has become to give advice, not so much about ‘Product”. I have completed aged care accreditation but not yet found a lot of clients looking for this advice and actually willing and able to pay – The problem with aged care is unfortunately in the pricing/cost to provide this advice due to the nature and complexity of compliance vs the willingness of clients to pay. With other areas of advice such as super/debt or retirement strategies they are generally bundled with other areas of advice and product so clients see more value in the fees they need to pay.

  3. Avatar Matthew Carlsen

    For years, we have had experts advocating that advisers should ‘find their niche’. Hence, we have investment experts, medical insurance experts, behavioural coaches, Aged Care experts, etc.
    I’ve worked with insurance advisers who have no clue about direct shares. Investment advisers with no clue about retirement strategies, and I’ve been happy to refer my clients seeking Aged Care advice to a local expert.
    If this FASEA exam process is heavily based on technical questions in niche areas, then it is wrong and discriminatory.
    FASEA is unprepared for the FASEA exam.

  4. Sure the 1st question of the FASEA practice exam concerned aged care matters but, the intent was to test the application of the code to the client engagement.
    My impression is there is not going to be a deep technical component in the FASEA exam but, rather, looking at typical examples of client engagement to apply the code against, and importantly, the SoA construction methodology.
    Candidates should immerse themselves in the FASEA support material – there is a load of content that is useful for exam prep on their website.

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