‘FASEA exam disadvantages experienced advisers’

Speaking on a recent episode of the ifa Show, Tony Machin shared his exam experience, noting that despite inching close to retirement, he was determined to leave the industry on his own accord. 

“It was important to me that I left the industry on my terms,” Mr Machin said on his decision to take the exam.

“I wasn’t going to have a public servant say that I could do this business or act for the clients like I have been doing for 36 years.”

With low pass rates inflicting anxiety on many, Mr Machin revealed that FASEA’s questions greatly disadvantage advisers with years of experience in the industry, despite their real-world experience. 

“The November exam last year, there were nine blokes my age or around my age, from 51 to 67. Minimum of 25 years’ experience in the industry, they all failed the November exams,” Mr Machin recalled. 

“But there was a 25-year-old, first-year adviser doing his first year, he passed. So, that proved to me that experience, what we would do, is irrelevant to passing the exam.”

According to him, the exam has a much greater focus on regulatory information that on real-world client relations. 

Quoting fellow adviser David Glynn, Mr Machin said when undertaking the exam “you’ve got to understand that they don’t care what experience you’ve got”. 

He added: “They don’t care what you would do.

“The FASEA people want you to say what they want you to hear.

“Whether it’s good or bad, it’s [the FASEA exam] a box ticking for the politicians and the public service to say, ‘Yes, well, we made them do this, they’re professional’.”

His advice for advisers preparing to sit the exam is to spend a lot of time practising and getting a robust understanding of what regulations FASEA is asking about in each scenario posed.

“They’re not questioning what your advice is or if it’s right or wrong,” he said.

“They just want to know, do you know this Corporations Act? Do you know the anti-money laundering? And if you get that, that’s what they’re looking for.”

Despite his frustrations with the exam, Mr Machin is optimistic for the future, noting that young people would take the places of those pushed out by compliance requirements while the need for financial advice grows. 

“There’s more need for insurance, there’s more need for advice,” he said.

“There’s so much opportunity for younger people in this, they just don’t understand it at the moment, is that there’ll be no one (else) left in the industry soon.”

As technology’s role in the industry continues to become more significant, the advantage younger advisers have will only grow in his opinion.

“For someone who’s got computer skills and got the systems, that’ll be all computerised,” he continued.

“Young people can fly through that, and they’ll do well.”

The full interview with Mr Machin can be found here or on your preferred podcast platform under the ifa Show.