The Numbers
Registration, sitting and success numbers for the required FASEA exam continue to be interesting. Currently, the industry has around 530 advisers who have successfully passed the FASEA exam and meet the new standards. On top of this, 1697 advisers have sat the September exams and are awaiting their results which will be provided in mid-November. If a 90% pass rate (the same as for the first sittings) is assumed, this will mean a further 1530, or 2060 in total, will have demonstrated adherence to the first set of FASEA standards.
Not surprisingly, the numbers lining up for the December exams indicate an increase on the first two sittings. Over 2500 have already registered, and others have until 8th November to do so. It’s probable that around 4,000 advisers will be preparing for and completing FASEA exams between the 5th and 9th of December this year.
Again, if a 90% pass rate is assumed, the total number of advisers who have cleared the FASEA exam hurdle will reach around the 5,700 mark.
However, this still represents less than 25% of advisers on ASIC’s licenced financial adviser register.
The unknown, in all of this, is the remaining 75% and how many of this group will register, sit and pass the exam before the deadline. Over 3,000 advisers have already left the industry in 2019, and if a substantial number of those yet to sit the exam (circa 17,000), don’t pass the FASEA exam, the industry will be a shadow of its former self.
The Deadline
Probably fuelled by the above numbers and trends, the government announced an extension to the original 01/01/2021 deadline for the exam. This announcement was initially met with an overwhelming ‘hooray’! Since then, the realities of proposed legislation and parliamentary process have created uncertainty and conjecture. The relevant legislation would need to pass both houses of parliament before the deadline extensions became law, and this will take some time.
And, some observers are suggesting that the opposition and independents may get some political mileage by blocking the changes.
For the 75% waiting in the wings, it may be wise not to count on an exam deadline extension.
The Trends
As well as the looming overall exodus of adviser numbers from the industry, there is an increasing move by remaining advisers from the institutionally owned licensees like AMP and the big four banks. These planners are taking up homes at privately owned licences.
There is also an emerging school of thought amongst advisers around restructuring their operations and businesses. Those advisers who want to continue to work, but are averse to tackling exams and then taking on further educational studies, are considering their options and the ways they can continue to work with and add value to new and existing clients.
Some are exploring a change in their role, moving away from advice and positioning themselves as financial mentors and cash flow coaches. Whilst extreme care needs to be taken this can move them outside of the AFSL and FASEA regulatory space, allowing the new breed of advisers to provide product advice, leaving them to oversee operations and refer clients based on their knowledge and experience.
Training Assistance
In conjunction with industry experts, elevateB has developed a self-paced, online, interactive learning program that addresses the areas of knowledge and skills covered in the FASEA exam. Understanding these will elevate your industry standing and help you pass the exam. For more information on the FASEA Exam preparation program, click here.
elevateB also delivers a certified training program that develops the processes and skills for use in cash flow coaching. Certified cash flow coaches help everyday Australians be more financially prudent and savvy. If you think a change in your role and becoming a cash flow coach is worth considering, click here.