David Sharpe

This month it was announced that the pass rate for the most recent financial adviser exam sitting was 52 per cent. From that we can glean that somewhere between 400 and 500 advisers will come off the register over the next month. If you are in this group, this letter is to you.

I want to share with you all a story of a Financial Planning Association member with whom I spoke recently. Devastated by the result in the recent exam, it meant that after decades servicing his clients, as of this month, he is no longer able to be his clients’ planner. In his 60s with the passion to keep going, having already completed the required additional education (including exams) his passion has been taken from him.

I mention this because when I was a whipper snapper, still wet behind the ears as a planner, he would welcome me into his office and share generously his knowledge. I will never forget that and I write this hoping he will know how much he was valued.

I know that for many experienced planners the repeated stumble at the exam comes with a devastating blow to your confidence and sense of being, as well as to your business.

Your exam results don’t define you. Your exam results don’t measure the longstanding relationships you have had with your clients. They after all are our most important assessors and they have valued your counsel, often for decades.

I would encourage you to stay involved in our great profession. I know that might be difficult as we often build our identity around the fact that we are planners. However an exam result doesn’t mean you don’t have value to add to the profession or consumers. There are many important roles that can benefit from your skills and experience and might not involve providing personal advice.

For those reading that might be thinking to themselves, great those 500 obviously shouldn’t be planners if they can’t pass the exam. I ask you all to reflect when you sat the exam, did you come bouncing out certain that you had passed? My experience talking to planners all around the country is that most had a level of uncertainty and fear and the overriding emotion when getting positive news was relief, rather than re-affirming a fait accompli.

I had one longstanding FPA member call me in tears a couple of years ago after the second sitting of the exam, confiding to me that she is a capable planner but the exam, her first in many years, made her question herself and her ability. She did pass, but for her it wasn’t an experience that positively reaffirmed her sense of self worth as a planner.

I am sure most will also acknowledge that our clients don’t all learn from us the same way. Some prefer a document to read, some like images and others prefer spoken word. So it is with assessments. For some planners, the existing format doesn’t allow them to appropriately demonstrate their knowledge and much to the disappointment and continued advocacy of the FPA, the current legislation doesn’t allow any flexibility.

Whilst we all acknowledge the importance of high professional standards for advice, we must also acknowledge the pain and devastation felt by some of our colleagues for whom serving their clients honestly and professionally has been their life’s passion.

Lastly, for those coming off the register I would like to offer to you the services of FPA Wellbeing, whether you are a member or not. I don’t pretend to be able to fully grasp how you are feeling, but please reach out to the professionals at the end of the phone or at least to a trusted colleague.

Regardless of your choices from here, I hope that you find comfort in knowing how important your work has been in advising and guiding your clients and helping them achieve financial wellbeing. I’m proud to call you colleagues and I’m grateful to you for the support and mentoring you’ve provided to many young planners over the years. I hope we can find a way this profession can continue to benefit from your skills and passion into the future.

David Sharpe is chair of the FPA.

9 comments on “An open letter to the 500”
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    Tony Simmons

    This article is a real heart breaker. I feel fortunate that I sat the third sitting of this exam in December 2019 and more fortunate that I passed it the first time. As mentioned I wasn’t at all confident that I had passed it afterwards.
    Those 500 experienced advisers now are added to the thousands that have fallen off the AFR since this education process began.
    The outcome is that advice is available to fewer people and the cost of advice increases accordingly.
    I often say..how did we ever get to this point?

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    Very well said David. Agree wholeheartedly with your thoughts here. Compassion and respect.

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    Chris Walsh Financial

    Thank you for this article, It has a tendency to take away that feeling of being a hopeless failure. I have been directly and indirectly associated with this industry for over forty years, I started collecting premiums at the door for MLC in January 1981. I have failed the exam three times, I’m almost seventy one years of age, and have absolutely no idea on how some of my clients will survive with my support. Some of them are hopeless but I love them just the same. Surely the working mans Government will come up with some sort of meaningful solution. This situation is just so unfair by examining people on industry items that they done use and never will use. The exam was created in a manner so as to fail many advisers and remove from the industry, that strategy has worked. Well done

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    Brett Newbound

    I am very sorry for all of those that have failed the FASEA exam. However, after 3 years, 2 extensions, and unlimited attempts it is going to be hard to sell this as unfair to the public.

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    The exam was challenging, there is no doubt about that, but once you stand back and look at it, the only new area was the ethical standards.
    The exam tested the legislative and regulatory framework required of advice businesses and although most operate effectively within that framework, it seems they are removed from the ‘coal face’ of that in their business. In other words, they are relying on their compliance areas to ensure they have the correct processes and policies. A good starting point in exam prep was to really read the internal policies and then move to the ASIC RGs and then familarise yourself with the layout of Chapter 7 in the Corps Act (so that you could utilise that resource if necessary in the exam).
    The other major part was client advice and you would hope that advisers gunned that. I appreciate that specialists struggled with specifics in case studies, however that challenge could be mounted by interposing the known specialisation into the case study to then be able to look at what was being asked and answer it from a regulatory, ethical and client perspective. Technical answers were not really required.
    If you stand back from the Code, you see a re-iteration of existing law, but it requires a behavioural response, rather than a black letter law ‘tick-a-box’ compliance approach. Exam prep required some training/refresher in the the main ethical theories and ethical decision making frameworks, but not completion of the Bridging course. For those unsuccessful in their first exam attempt, perhaps the Bridging course completion may have assisted but I suspect the weaknesses were more in the regulatory framework section.
    The Code was an exam resource so there was a prompt to help you weave it into your answers.
    Agree exams performance is considered a hallmark of ability and can produce self doubt, especially in the highly competitive world of professional services, but we need all participants to have a single standard. Now the existing advisers are through their uplift, perhaps the exam should be re-visited as it will be only new entrants contesting it in the future. However, I would caution that any re-work of the exam is done in conjunction with feedback from the professional year candidates that have completed the exam. They are the cohort the standards were designed for and I suspect, the exam might be fit for that purpose.

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    Jeremy Wright

    For the crime of failing one test that has little bearing on all the good that you have done over decades, you will be removed from your long held position of trust and service, to be thrown onto the scrap heap.

    This is what Australia has become. The headlines are crying out for people who are willing to work, of which very few are answering the call, causing more small Businesses to wonder why they bother.

    Then, to really kick you when you are down, it is now open season on experienced Advisers who want to work, though finding it hard to pass a test set by people who have the smug satisfaction of their self importance, with little common sense or ability to make a simple task, work.

    What assembly of fools came up with the notion that it is more important to ignore what you have actually done over many years, which is to provide great service, while successfully complying with the rules and doing many hours of ongoing study each year, then make a grand statement that your honesty and integrity and dare I say it “ETHICS,” can only be determined by a theory based test.

    Australia has gone mad. We were a nation of getting things done.

    Now we are seen as a Nanny state, controlled by bureaucrats who have never lived in the real world.

    Look at the price of “Idealism.”

    Look at what has happened in the real world as a result of this insane focus on theory based knowledge being the key to the door.

    Common sense must prevail, or we will all continue to pay the price.

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    Great summary of the Exam outcome for so many experienced advisers David. It’s just a shame that we have allowed this process to continue when many could foresee how it would impact our profession & the business owners who have created the whole structure for financial advice over the past 30 – 40 years. It was very disappointing to read some of the comments from our “apparently” professional colleagues when referencing the challenges that many of the experienced planners were confronting through the exam process. Your thoughts & sentiments are appreciated.

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    Mark McLennan

    Well written David – I totally agree with your sentiments.

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