The document, seen by ifa, outlines how the adviser exam should play out including the exam format, duration, style and the materials allowed in the exam, as well as the mark advisers would have to achieve in order to pass.
In an email to members last week, the FPA released all the documents relevant to its recent 2017 National Roadshow. Among the documents was its proposal for FASEA on the compulsory adviser exam, which existing advisers must pass by January 2021.
In the proposal, titled the Degree and Degree Equivalence White Paper, the FPA has suggested that the exam be set as a multiple choice exam to drive efficiency in facilitating the test and marking it.
Because there is no limit on the number of times an adviser can sit the exam there should also be a large bank of questions to use randomly in each exam to avoid repeatedly issuing identical exam papers, the FPA said.
Further, the exam should use real-world case studies to frame the series of questions and should be three hours long plus reading time.
For financial planners in particular, where knowledge of many different technical areas, constantly changing laws and benefits, and a significantly large selection of implementation solutions all need to be applied to a client’s goals and financial situations, the ability to find and apply knowledge rather than just have a good memory are critical, and this is why the exam should be open book, the FPA said.
In order to pass the exam advisers would have to achieve a mark of 70 per cent, the FPA suggested.
However, results should be provided to advisers on a ‘competent’ or ‘not competent’ basis rather than revealing the actual mark an adviser has achieved.
“The exam component of the framework is there to ensure competency rather than rank financial planners across the whole profession,” the FPA said.
Once the exam framework is established it should be tested on retired financial planners, the FPA said.
In June, the FPA released its proposal for how existing advisers should transition over to the new professional standards, while on Friday the AFA revealed it is undertaking research for its own proposal to the government.
Clarification: This article has been amended to clarify that the FPA’s proposal is a draft document, which the professional association has not distributed publicly.
[quote=Anonymous]Surely that is something that can be reported to the FPA or the AFSL (and threaten FOS involvement). Have had a very similar situation and the lack of basic
understanding by lazy planners is astounding.[/quote]
Been reported mate but nothing ever gets done. It’s about as frustrating as it is surprising that everyone else seems to this is ok.
Does anyone else only read the comments and not the article?
Breaking news,, here are a selection of Questions.. Question 1) If an adviser gets $60,000 from AMP this is called a conflict of interest….true/false. Question 2) If the FPA get $60,000 from AMP and the CEO calls himself independent is any of this a conflict of interest. True or False… Question 3.. short answer) If the FPA get’s $60,000 from AMP and approaches the Labor Government to remove Opt in, how successful will there lobbying be? Please note that the cost of administrating this exam is $250 per adviser but for AMP and CBA etc advisers it will be $200.
ASIC fees increasing, exam introduced at a cost, FPA membership $, AFA membership $, FOS fee $, cost to issue FDS, cost to manage opt-in, reduced commission on life, expanded clawback, investigations back ASIC, APRA and ACCC – the end result – fewer people being able afford advice.
and… many small advisers will find it increasingly difficult to operate and leave the industry, just as intended.
Three hours exam. Yikes… Hopefully it will be a fully hand-written exam. Love to see the kiddies, appreciate the joy of “”writing in an exam””. Some people won’t even know what a Pen is. Some keyboard warriors wrists will be aching 30 minutes into it. but seriously, Having some experience with academia, the science actually tells us as that a once off hour exam is not a good way to learn or test knowledge.
The kiddies probably have a lot more experience at you writing 3 hour exams having recently finished University or other qualifications.
It’s good to hear what AMP and the big banks want, given it’s coming from the FPA.
Let me guess, it will be a fee of $199 per exam? Surprise surprise, the FPA is again making money from strategies they have started. It’s no wonder they can afford overpaid executives with their snouts in the trough slurping away as usual.
Every staff member at the FPA should be made to pass this exam with a 100% mark.
How did this industry allow this ridiculous regime to hoodwink the masses into allowing this to happen. What a joke.
when the rules are written by those most set to benefit this is what you get
The exam will prove nothing . Advising is an art and not a science. A waste of everyone’s time
Couldn’t agree more. It takes a lot of practice to become a good adviser.
Lets make the politicians write the draft exam instead of retired FP’s (unless there are questions on fishing and golf!!). Once 75% of politicians have passed then they are qualified to pass the relevant legislation.
Knowing the FPA, risk only advisers, licenced to advise ONLY on risk in and out of super, will probably be required to sit an exam on derivatives, share trading and loads of other esoteric subjects. What a joke !!
Why is the FPA wasting members time and money dreaming up plans for another exam? They already have a perfectly suitable exam, which is the final unit of CFP. They should be offering the CFP exam to FASEA, in exchange for an exemption for all those real CFPs who have already passed it.
But does it?? Would a planner be creating advice purely from memory or would they be using their available resources to create the advice. I don’t know of any planners that would go into an external office without technical resources to create an SoA!! Wouldn’t it be obvious to have a planner create advice on the case studies in the exam the same way they’d be creating advice for real life clients??
Surely going to be external classroom, closed book isn’t it???
Allowing someone to do it in their own office just defeats the purpose.
In a round-about way you have hit the nail on the head. We need to make sure the purpose of this exam is clearly defined. If the purpose is to eliminate a large portion of advisers who can’t memorise large swathes of information; even if they provide competent, professional advice in their client’s best interest when they are in their office, with all the normal resources at hand; then yes it should be external and closed book. On the other-hand, if the purpose is to test adviser knowledge and competence in a real-world sense, then what the FPA is suggesting is spot on.
I see where you are coming from and I agree to an extent…
However, late last week I received a referral because someone’s previous adviser set up a separate TTR pension account outside of their SMSF because they didn’t understand that you could set up a platform within the SMSF and pay a TTR pension from there. Rollover already done, minimum pension required to be paid from new super funds in order to get funds back to SMSF to fix it. Didnt communicate with accountant as was scared they wouldn’t get the business, Accountant rightly kicked up a fuss when this was done. You should see the original SOA, it makes me sick and confirms a clear lack of understanding of basic financial planning.
A classroom based, closed book exam would get rid of said practitioners IMO. It doesn’t even need to be that hard, just cover the basics that everyone ‘should’ know (but some clearly don’t).
Don’t even need a ‘platform’….
Yep, but they didn’t know how to charge a fee from something that isn’t platform, that’s their ‘offering’. The lack of understanding is bewildering.
End result – client has a SMSF they are still paying the same fixed fees for with minimal funds left in there, paying a buy/sell spread due to moving funds out and a separate platform that could have been done exactly the same within the SMSF.
Anyone who doesn’t think we need to lift the bar has rocks in their head. Surely most of us are sick and tired or having the same job title as these people.
Surely that is something that can be reported to the FPA or the AFSL (and threaten FOS involvement). Have had a very similar situation and the lack of basic understanding by lazy planners is astounding.