‘Daunting’ and ‘intense’: Preparing for the adviser exam

Each quarter, the Australian Securities and Investments Commission (ASIC) holds a financial adviser exam, an unavoidable step laid out in the Corporations Act for anyone wishing to provide financial advice in Australia who doesn’t meet the experience pathway.

Previously administered by the Financial Adviser Standards and Ethics Authority (FASEA), ASIC took over the exam as of 1 January 2022. Two years later, ASIC officially changed the exam, removing the short-answer questions to make it multiple choice only.

The latest sitting was on 6 March, during which 241 candidates undertook the exam, of which 73 per cent passed.

Among them was Jessie-Lee Curtis, a student at Deakin University currently undertaking a bachelor of commerce in accounting and financial planning, also an assistant accountant at Brewster Walsh & Associates and a single parent.

When it comes to preparing for the exam, ASIC does provide an extensive array of resources, however, Curtis told ifa that one of the most valuable sources of knowledge was simply talking to others.

“I just started talking to as many people as I could that had sat the exam just to get their ideas, what worked for them … What they would do differently, the approach they took, all those sorts of things,” Curtis said.

Through speaking to a fellow member of the Emerging Professionals Committee (EPC), Curtis then found a series of webinars of the Financial Advice Association Australia (FAAA) website ranging from tips and guidance for the exam to a Q&A panel with advisers who had recently sat the exam.

While these proved an invaluable resource, she also opted to undertake TAL’s Financial Adviser Exam Masterclass, which Curtis said was the most valuable preparation she did and only cost $55.

The masterclass is a self-paced course covering exam logistics, financial advice regulatory and legal obligations, applied ethical and professional reasoning, and financial advice construction requirements with information delivered through videos, seminars and activities.

“Before I did the TAL masterclass I actually completed half of the ASIC practice exam because I just wanted to get a gauge for where my knowledge base was at. I was getting about 60 per cent,” she said.

“I sat the exam at the end and my results were coming back at about 80 per cent so there was definitely an improvement in my knowledge base after doing the TAL masterclass. I think that it really did put me in good stead.”

Although she was already $1,500 out of pocket for the actual exam, Curtis said it was worth it because she “didn’t want to walk away from the exam knowing that I really could have done a lot better, I could have prepared myself better”.

“I really wanted to walk out of that exam knowing that, regardless of the results I get, that I had done everything I could to put myself in good stead,” she added.

Speaking with ifa, Hannah Elliott, an associate adviser at Stellar Wealth planning to sit the exam in June, similarly said that the TAL masterclass was “recommended the most to me” when asking others for advice on how to prepare.

However, the biggest downside for Elliott was that she felt it was too short.

“It’s good but it is only six hours in its entirety. It’s not like a two-week course or anything, it’s just six hours. So, once you’re done, I guess you just repeat it over and over again to try and drill it in,” Elliott said.

“I feel like I would have happily paid more money if it was, you know, two weeks or something like that, to really feel secure.”

Currently in Q2 of her Professional Year, Elliott just graduated from Griffith University with a bachelor of applied financial advice in March. However, she said, “I’m not celebrating anything until I get past the exam. There’s no point.”

Admitting that she is “not a confident exam taker”, Elliot is now throwing herself into her preparation.

Notably, while many likely operate under the assumption that you are required to wait until you have completed your studies or even until you have already begun your professional year (PY), Curtis decided to get a jump on the exam, despite having another seven months left of her degree.

Although this does come with the drawback of being on the hook for the cost of the exam, rather than an employer, Curtis said she wanted to do it now to make herself more desirable to future employers and take advantage of the study mindset, while also clearing the path forward for her future career progression.

“You need to pass the exam in order to move into your third quarter of the professional year. So, for those advisers that leave it until then to do it, potentially they’re risking, if you fail, then you can’t progress into your third quarter until you sit it again and until you pass it,” she said.

“So, potentially you’re delaying yourself another three months and you’re sort of in a holding pattern or you’re at a standstill as far as your progression until you pass that exam.”

Now having passed the exam, Curtis will be able to smoothly transition from Q2 to Q3 of the PY once she reaches that stage.

Time for the exam

When it comes to actually sitting the exam, Curtis said that everyone had a different approach and suggestions.

The most important thing though, she said, was to “make sure that you answer every question to give you the best possible chance”.

However, the hardest part of the exam, according to Curtis, was often the actual wording of the questions.

“You’ve almost got to be a professional question reader to do the exam. The wording was often, you kind of came away from it and you weren’t 100 per cent sure what it was asking you exactly. You kind of had to read the questions over and over,” she said.

“Or it would ask you what is the incorrect response, whereas your brain automatically goes to the correct response. It’s a bit of a trick question in that way because, automatically, you skim the answers and you go to the one that’s right.”

On top of this was the psychological pressure of sitting the exam.

From navigating technological hiccups that caused time delays to the anxiety of having a proctor watching the whole process, and even the inability to quietly read questions aloud to oneself, Curtis described the exam process as “daunting” and “quite intense”.

Beyond the financial considerations, she said that after going through the knowledge and mental preparation, when sitting the exam, it feels like there is “a lot at stake”.

However, while three-quarters of exam takers passed the latest exam, for those that didn’t, some have argued that the feedback received from ASIC is insufficient to help them better prepare for their next attempt with little explanation as to where they went wrong.

Notably, this issue, among others, was raised by the Stockbrokers and Investment Advisers Association (SIAA) more than a year ago but has yet to be solved.

“This is particularly important in light of the incapacity of the PY candidate to progress until they have passed the exam. Currently, exam feedback is not individual but generic,” SIAA said at the time.

“All it does is repeat the curriculum item relating to the question that the candidate has failed. It does not tell them why they failed that question or what particular matters they should study to pass the question at the next sitting.”

Other industry groups, such as the Financial Advice Association Australia, have also called for a reduction in the cost of the exam as the cost to run it should be considerably lower now that it is in multiple choice and thus less time consuming to mark; however, this too remains an unresolved issue.

The next adviser exams are scheduled for 5 June, 7 August and 6 November.