A deep dive into the adviser exam pass rate

Money Management has taken a closer look at the financial adviser exam and how this year’s exam results have differed from previous ones. 

Yesterday, it was announced the pass rate for the February’s financial adviser exam was 67%, the highest it had been since it moved over to being managed by the Australian Securities and Investments Commission (ASIC).

However, it was notable this was from a much smaller base as only 192 candidates sat the February paper compared to 282 in the previous one.

A significant change had taken place after the July/August exams as advisers who existing providers were eligible for an extension to pass the exam by 1 October. If existing advisers had failed this sitting, they needed to cease providing financial advice to retail clients from October.

After this, they would revert to new financial advisers which required additional educational requirements to the exam.

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This meant many candidates in the November and February exam were sitting it for the first time; 60% in February and 57% in November. 

Joel Ronchi, chief executive of Fourth Line who had worked with many candidates on their advice exam preparation, said candidates sitting the Nov/Feb exam fell into two camps. 

"You either have people who are on their Professional Year or people who had taken themselves off the Financial Advisers Register at the end of 2021 and were now looking to come back to advice.

"It is a generalisation but people who are sitting it for the first time now are generally younger, they are used to doing online exams. So [the pass rate] is not necessarily down to the quality but the user experience of this cohort of candidates."

Pass rate for 2022 adviser exams

Looking ahead to the rest of the year, there was a reduced number of sittings in 2023 as exams would only be held three more times on 11 May, 10 August and 9 November.

It was likely the Financial Advisers Register (FAR) would see several provisional advisers join advice firms this week following the results announcement. After the November exams, some 15 provisional advisers joined firms and there was a net positive change of 20 advisers.
 
Candidate view 

Matt Last, senior associate at Evalesco in Sydney, said he passed this time after two failed attempts previously which he described as a “huge relief”.

A change made this year was the remote proctoring as the exam moved to being held in an online capacity only rather than in-person. 

“My exam started one hour and 15 minutes after the scheduled start with issues encountered with remote proctoring at their end. I know that method was brought in with COVID-19 but I think future tests can be done in a testing centre environment, in person,” he said.

“The feedback provided from my previous failed attempts was very vague and I know that type of feedback has been widely communicated across the industry.”

This was also noted by Ronchi who said he had heard similar experiences from candidates of delays of 40-50 minutes.

"That is a real challenge, people are mentally ready to sit the exam and then they are delayed. It is like waiting at the start of the 100m line for a race."

Last also noted the increased fee to sit the exam which had risen from $595 when it was administered by the Financial Adviser Standards and Ethics Authority (FASEA) to $1,500 under the ASIC, which may be a shock for those candidates who had last sat the exam under FASEA prior to December 2021.

This had been a gradual increase as the price last year was $973. 

Advisers also had to pay $218 if they wanted a question remarked.