AIOFP backs ‘abandonment’ of adviser exam

The Association of Independently Owned Financial Professionals (AIOFP) said it “supports abandonment” of the financial adviser exam in its submission to Treasury on the consultation paper for adviser education standards.

The consultation paper — which closed off submissions last week — looked at options to “streamline the education requirements for financial advisers” and how the financial adviser exam can be improved, such as reducing the number of questions.

In its submission, the AIOFP said there is “no public benefit in maintaining such a contentious exam”.

“Given the loss of advisers and the current requirements for professional technical and ethical education, the imperative to continue with such a national exam no longer exists,” the AIOFP submission reads.

“Consumers are now better served by a cohort of professional advisers who actively subscribe to minimum competency standards and ethical behaviours.

Should the abandonment of the exam not be an option, the group called for a “significant review” of the current questions and forms, and suggested alternative options such as an “oral exam, role play and paper based”.

The AIOFP did, however, support the proposal to remove the tertiary education requirements for financial advisers who had passed the exam, had 10 years' experience and a clean record of financial practice, and recommended that the period be extended through to 1 January 2026.

“The AIOFP does not consider its proposal to abandon the FASEA exam to be controversial,” the submission concluded.

“The FASEA exam is redundant for new entrants as they are all completing formal education at an AQF 7 level, for this reason a national exam of practitioners is no longer justified.

“The burden of an exam to test competency and knowledge for no additional accreditation or recognition is not present in any other industry or profession.

“When compared to other common law countries, Australia has acted alone in this regard.”

The release of the AIOFP's submission comes after Shadow Minister for Financial Services, Stuart Robert, said the advice industry has failed to correctly address education standards for some time.

Appearing on a recent Momentum Media podcast, Mr Robert called out education standards in particular.

“So I've been doing this journey for a long time and the industry — the advice industry — couldn't get itself together on education. Couldn't agree,” he said.

“Hence, why FASEA was born. Now, FASEA is gone, thank goodness. Because where it landed, I thought was quite poor.

“I'd like to see the industry own its own education requirements, come together like the broking industry did, where the players all got together and all agreed.

To listen to the full podcast with Mr Robert, click here.

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.