Guidance issued on compulsory exam for advisers
As anticipated, FASEA has confirmed some details of its compulsory exam for those accountants and advisers looking to continue in the provision of SMSF advice.
In a statement on its website, the government body said that all advisers authorised prior to 31 December 2018 will be required to pass an exam testing their competency before 1 January 2021, with all new entrants and those returning to the industry after 1 January 2019 being required to complete the exam upon completion of their studies,
The FASEA proposal also outlines five "competency areas" on which the exam will be used to test advisers.
- Corporations Act (emphasis on Chapter 7 – financial services and markets)
- The FASEA Code of Ethics
- Behavioural finance – client and consumer behaviour, engagement and decision making
- Financial advice construction – suitability of advice aligned to different consumer groups
- Applied ethical and professional reasoning and communication
"The guidance also proposes that the exam will have a mix of multiple choice and short answer questions. Advisers will be given up to two opportunities to re-sit the exam," FASEA's statement said.
FASEA has proposed a scaled passing score of 65 per cent. The scaled passing score, FASEA said, is it's view of the minimum level of applied knowledge required for independent practice as a financial adviser.
"Raw scores, the total number of answers that were correct, will be arithmetically converted to a scale that ranges from 0 to 100 that takes into consideration differences in difficulty among different versions of the tests," it said.
"The Standards Authority is undertaking a procurement process with specialist service providers around the development and delivery of the exam and will provide an update on this process in the coming months."
Feedback on any aspect of the proposed examination can be made prior to 5pm on 31 July.
"The Standards Authority would like to advise that the remaining standards will be released in the coming weeks," the statement added.