In December, the government released draft legislation to amend the financial adviser exam.
The proposed changes would see the removal of short answer questions and an increase in multiple choice questions, as well as removing the requirement that only provisional relevant providers and existing advisers can sit the exam.
The draft explanatory statement said that exams based on multiple choice questions “create efficiencies” by enabling computer marking to replace manual marking.
The explanatory material added 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”.
Following the announcement, the Australian Securities and Investments Commission (ASIC) pushed back the date of the first exam for 2024 to 26 March, in order to allow sufficient time to implement required changes to the exam and ensure all candidates are held to the same standard.
In its response to the draft legislation consultation, the SIAA said it “strongly supports” these changes, which it said would help ease the burden on prospective advisers going through their professional year (PY).
“PY candidates have already incurred significant costs to undertake the mandated education, imposing further significant costs to sit the exam cannot be justified,” the SIAA said.
“Once the proposed changes are implemented, the cost to the exam provider should reduce significantly and this should be passed on to the exam candidates in the form of a lower exam fee.
It added that greater flexibility in exam eligibility criteria would help increase “the pool of potential PY candidates”.
“This will provide flexibility for candidates to sit the exam at a time suitable to them, for example, while they are completing their studies,” the SIAA said.
“It will also open up access to the exam to a larger cohort of people. Firms will be able to encourage back office and middle office staff to sit the exam, thereby increasing the pool of potential PY candidates.”
However, the SIAA has also called for the government to go further in reshaping the way the exam is conducted.
“Candidates should be able to sit the exam at any time and not be restricted to exam blocks,” it said.
“The exam should be available on request or on a rolling basis. This would prevent the current delays in professional year (PY) candidates being able to complete their PY.”
The association also recommended expanding the content of the exam to include a “broader range of scenarios than simply those based on financial planning”, which it said would reflect the “full spectrum of financial advice”.
Questions that have two correct answers requiring the candidate to guess the “most correct” answer should be removed, the SIAA said, adding that the exam should “test the candidates in ways that ensure they know the material rather than trying to trick them”.
Additionally, more tailored feedback should be provided to unsuccessful candidates so that they can improve in their next exam sitting, the SIAA noted.
“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,” it said.
“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.”
