Zach Castles

The Financial Services Council will recommend to ASIC that the adviser exam be opened to all licensee staff in order to improve professionalisation and upskilling within teams.

Currently only existing advisers or new entrants in their professional year can register for the exam.

It will also recommend changes to how ASIC supports PY candidates who go on to become financial advisers by enabling all candidates to sit the exam remotely and before Q3 of their PY, allowing proposed candidates to self-register for the exam, and for ASIC to reduce processing times on exam results.

The catalyst cited by the FSC for the proposal is the reduction of adviser numbers which has dropped below 17,000 with predictions it could drop below 15,000 by the end of the year.

FSC policy director for advice Zach Castles tells Professional Planner PY candidates need a better system to ensure the industry continues to get new entrants into the financial advice profession and stem the decline in adviser numbers.

“ASIC should consider providing more flexibility and a better experience for professional year candidates by reducing processing times for reporting on exam results, enabling all candidates to sit the exam remotely and by allowing candidates to sit the exam earlier if they are ready.”

Some support

Profile Financial Services chief executive Lena Ridley says the idea has merit “at the edges”.

“There may be a subtle level of credibility that practitioners may ascribe to licensee staff, such as risk and compliance employees, who have completed the exam, particularly if the requirement to have completed an approved degree also remains.”

She says it may also support career transitions for risk and compliance or client service staff to complete the exam before commencing a PY and a transition into advising.

Diverger managing director Nathan Jacobsen says he is supportive of licensee staff who want to sit the exam if it’s to improve their knowledge.

“Many of my staff have done so, not as part of completing the degree requirements but for that same reason.”

However, he says it works best if it is optional does not become a mandatory requirement.

“Making it mandatory is problematic given the wide diversity of roles in licensee businesses – we are service providers who do more than just compliance.”

Some obstacles

As was the case when FASEA administered the exam, most changes must go through government, but the FSC believes its recommendations can be handled internally by the regulator.

ASIC chair Joe Longo reiterated this point last week at the Stockbrokers and Investment Advisers Conference when asked what changes it could control.

“It’s prescribed by regulations by the minister; we just administer it,” Longo said last Wednesday. “It’s a matter of government to deal with. We don’t have any say over the content. We don’t have any power to modify the impact of effect of the exam.”

When asked about potential changes it could enact former FASEA chief executive Stephen Glenfield routinely told Parliament and media he was following the legislation that governed the authority’s operations.

“We are takers of legislation and we operate within that legislation,” he told Professional Planner in 2019.

The first ASIC adviser exam saw 333 candidates sit with only a third passing, significantly lower than the final FASEA exam which had a pass rate of 52 per cent.

One comment on “Open adviser exam to all licensee staff: FSC”
  1. Avatar
    Martin Le Tessier

    How many licensee staff do you think would be able to pass the exam. It’s enough of a challenge to existing advisers. Most licensees run lean staff numbers and have plenty to do in their own space. Silly idea.

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