Accounting body lobbies for extension to adviser exam
One of the major accounting bodies has called on the government to extend the deadline for the mandatory exam for advisers, with the exam not expected to be available until mid-2019.
In a submission to the Financial Adviser Standards and Ethics Authority (FASEA) regarding the legislative instrument for the relevant providers exam, CPA Australia said that it was concerned that exam candidates had insufficient guidance to help them to successfully prepare for the exam.
“However, we are concerned that the proposed knowledge and skills areas are broad and the proposed learning outcomes may not provide candidates with sufficient guidance that defines the expected learning outcomes to help them successfully prepare for the examination,” the submission said.
CPA Australia also stated in the submission that it was concerned about the different time frames between the exam and the bridging units.
“The exam must be successfully completed by 1 January 2021, while the bridging units must be completed by 1 January 2024. Therefore, it is likely [that] existing financial advisers will not have completed their required bridging units, including the Ethics unit, before sitting the exam,” it stated.
“This is even more likely given the examination will not be expected to be available until mid-2019 and the required bridging units are also still being finalised and therefore not available for existing advisers to commence their required studies.”
The submission noted that during the consultation on Corporations Amendment (Professional Standards of Financial Advisers) Act 2017, it was deemed that two years would be an appropriate time frame for an existing provider to successfully complete the examination.
However, with the exam not expected to be available till halfway through this year, the proposed time frame is potentially now only 18 months for existing providers within capital cities and potentially less than 12 months for existing providers where it is unreasonable for them to travel to an exam location or they are unable to travel to the exam location.
The submission also pointed out that while candidates will be able to sit the examination multiple times if they are unsuccessful, it is also proposed that a candidate cannot re-sit an examination within three months.
“This further reduces the time frame for a candidate to successfully complete the examination, should they be unsuccessful in their first or second attempt,” it said.
“Consideration should also be given to the fact that many experienced financial advisers may not have undertaken formal examinations in a number of years, which may result in higher levels anxiety and pressure when sitting the exam. This may lead to higher initial fail rates, requiring additional re-sits.”
CPA Australia therefore recommended that the date for existing advisers to complete the examination be extended beyond 1 January 2021, to ensure that all existing providers have two years to complete the examination as intended under the act.
The submission also urged FASEA to develop and publish an exam blueprint to ensure that candidates can appropriately prepare by having a clear understanding of the knowledge and skills that may be tested in the exam and at what taxonomy skill level.
“This should be complemented by practice exam questions, both selected response and case study, to ensure that candidates understand the style and form of possible questions in the examination,” it said.
“Consideration could also be given to providing feedback to candidates who are unsuccessful. This could be broken down by knowledge area to help candidates understand which content areas they may have been unsuccessful in to better prepare for their next attempt.”
While the 31 December 2020 deadline for the exam has been legislated, Kaplan Professional head of operations Sally Greener previously commented that it’s possible that the date could still be changed.
“It’s a huge undertaking to have it available as of January for new entrants and mid-2019 for existing advisers. The logistics of it are huge. We’re not getting any indication that the deadline will change, though,” she said in December last year.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.