The Financial Adviser Standards and Ethics Authority (FASEA) yesterday released its draft guidance on the Financial Adviser Examination. The examination is an essential component of the educational qualifications that all advisers will need to pass before they can provide personal advice to retail clients.

The Standards Authority proposes that the exam test the practical application of adviser knowledge in the following competency areas:

• 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.

Advisers who are registered as authorised representatives prior to 31 December 2018 will be required to pass the examination before 1 January 2021. From January 2019, new entrants or those returning to the industry are required to pass the exam after they have completed their tertiary degree, and before commencement of their professional year.

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.

FASEA welcomes feedback on any aspect of the proposed examination. Submissions for this proposed guidance will close on 31 July.

FASEA is responsible for setting the education, training and ethical standards of financial advisers licensed under Australian law.