FASEA's results for the March round of adviser exams have been released, showing a declining pass rate (74% first-time candidates passed compared to the average of 83%) and an increased number of exam participants (2,234 versus the average of 1,399).
Commenting on the results, FASEA CEO Stephen Glenfield said: "FASEA congratulates successful candidates on completing an important component of their education requirements under the Corporations Act. Over 15,200 advisers have sat the exam with 9 in 10 demonstrating they have the skills to apply their knowledge of advice construction, ethics and legal requirements to the practical scenarios tested in the exam."
Glenfield added: "In recognition of their achievement, passing candidates who give consent will have their names added to the successful candidates list on the FASEA website."
As per standard FASEA practice, unsuccessful candidates will receive individual feedback on key areas of underperformance.
Now: would you like to guess what one of those areas of underperformance was in the March exams? It's something we've covered fairly extensively - here, for example, as well as here, here, here, here, here, here, here and here. That’s right: it’s the Code of Ethics and the practical applications thereof.
Given how familiar this story has become, one can assume that either there is a shared and specific lack of understanding of the Code of Ethics amongst unsuccessful candidates or that there are fundamental issues with the Code itself. Considering the volume of guidance FASEA has issued concerning the Code over the past few years, it would seem the latter option is more likely.
This isn’t an original observation: in the articles linked above, the Code has been described by some advisers, association leaders and politicians as "unworkable", "built wrong from the ground up", a "huge challenge" and an impediment to the provision of scaled or limited advice.
Can it be fixed? Are there plans to change it? As per FASEA’s most recent corporate plan, the Code is due for updated guidance early next year and a review in 2024.
Of course, FASEA won’t exist by early next year; standard-setting functions will be under Treasury’s control. And Treasury has indicated that despite being aware of advisers’ concerns, there are no current plans to amend or replace the Code of Ethics. Were this to occur, it would only be after “further [engagement] with industry and understanding any concerns."
Still, there is at least acknowledgement in Government that further change may be required regarding the post-FASEA advice agenda. Speaking at an FSC event, Senator Jane Hume said that FASEA only focused on one piece of the advice "puzzle," adding that "[it] didn’t focus on keeping the costs of doing business low or making advice readily accessible to consumers."
Perhaps the Government’s recently-merged Quality of Advice review will focus on just that. If it does, it would be a prime opportunity to consider what should be done about the adviser code.
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