Just over 50% pass last financial adviser exam ahead of October ‘cliff’ date

A total of 328 candidates (52 per cent) have passed the July and August financial adviser exam of the 628 who participated, ASIC confirmed on Thursday (1 September).

The corporate regulator confirmed that 76 per cent of the candidates were resitting the exam for at least the second time.

Of those who have passed:

• Over 15,800 are recorded as current financial advisers on ASIC’s Financial Adviser Register (FAR), representing 95 per cent of current advisers on the FAR.
• Over 2,500 are ceased advisers on the FAR and may be re-authorised in the future. 
• Over 700 were new to the industry.
• Over 3,300 unsuccessful candidates have re-sat the exam, with 74 per cent passing at a re-sit.

The latest sitting was the last opportunity for advisers who are operating under the nine-month exam extension to pass the exam. From 1 October 2022, all financial advisers must have passed the exam to continue to provide personal advice.

ASIC has confirmed anyone eligible for the extension who has not passed in any of the three cycles this year will not be able to provide personal advice from 1 October.

“For financial advisers who are eligible for the exam extension, but have not passed the exam in 2022, there is an opportunity for you to take steps with your Australian financial service (AFS) licensee to limit the effect of this outcome,” ASIC said in a statement.

“If your licensee ceases your authorisation on or before 30 September 2022, you will still need to pass the exam before you can become re-authorised and re-commence providing personal advice. However, you will not need to complete a professional year and you will have until 1 January 2026 to obtain an approved degree.

“If your licensee does not cease your authorisation on or before 30 September 2022, it will cease by operation of the law and you will no longer be able to provide personal advice. To become re-authorised and re-commence providing personal advice, you will need to complete a professional year and obtain an approved degree in addition to passing the exam.”

The results come after just over 40 per cent of candidates passed the May sitting.

Earlier this month, the Association of Independently Owned Financial Professionals’ (AIOFP) executive director, Peter Johnston told ifa that the industry group was "naturally disappointed" that financial services Minister Stephen Jones did not defer the exam until after the 1 October "cliff" date to restructure it in the recently-released consultation paper on education standards and the adviser exam.

However, Mr Johnston recently told ifa that the AIOFP had “not given up” on seeking an extension past 1 October.

"With the ridiculous past degree issue countered by the 10-year rule — thanks to Minister Jones — the big current issue is the exam October 1st ‘cliff’ date. The less-than-four-week time frame between when the results of the ‘last chance’ exam are released by ASIC and the ‘cliff date’ is totally unreasonable for unsuccessful advisers to sell/transition their business," Mr Johnston said.

"If the exam format changes post October 1st for new entrants, why can’t current advisers that failed be given the same opportunity?"

In the consultation paper, Mr Jones also addressed the 30 September deadline for existing advisers to pass the exam and continue to provide financial advice, saying that following the deadline, he will ask Treasury to explore how the exam can be improved, such as reducing the number of questions.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.