Government releases draft law for changes to adviser exam

The government on Thursday released draft legislation under its commitment to ensure the financial adviser exam remains a pillar of the financial adviser professional standards.

The draft legislation includes amendments that will:

• Remove the short answer questions from the exam and increase the number of multiple-choice questions.
• Remove the requirement that only provisional relevant providers and existing advisers can sit the exam.

These amendments concern principles 2 and 5 of the exam, as outlined in the Corporations Determination 2021.

The draft explanatory statement sets out that exams based on multiple choice questions “create efficiencies” by enabling computer marking to replace manual marking.

“This reduces the cost of administering exams and improves response times for exam candidates to receive their results”.

Regarding changes to principle 5, the explanatory material says that “current exam eligibility criteria which restricts access to the exam based on the person having already met the qualifications standard is causing unnecessary delays for new entrants seeking to enter the profession”.

“Removing this restriction provides flexibility for candidates to sit the exam at an appropriate time. For example, potential new entrants could sit the exam while they are completing their studies.

“This also improves timely access to the exam by reducing bottlenecks and potential delays associated with conducting eligibility assessments for each exam candidate prior to each exam”.

The material highlights that all relevant providers are still required to meet the qualifications standard in addition to meeting the exam standard to provide personal advice to retail clients.

“The minister has assessed that these amendments are necessary and desirable to ensure that relevant providers are adequately trained and competent to provide personal advice to retail clients in relation to relevant financial products,” the material states.

The government has invited interested parties to submit their views up until 10 January.