Mr Sheahan said his brokers were struggling with more than just the study load. “I know the emotional side of it with people is that it’s really humiliating. We’ve got people who have been very senior on the stock exchange, going back many years, who have wonderful performance records, wonderful compliance records, saying it’s just humiliating.
“If any fail more than once or twice, they’re not going to do it again.”
Ord Minnett chief executive Karl Morris said he was “lucky” to have passed the exam on his first attempt. But he said many of his colleagues have failed because the content is geared towards financial advisers.
“At the end, I had no idea whether I passed,” Mr Morris said. “I don’t have problem with doing a national exam. I do have an issue that it seems to be too ambiguous and a lot of the questioning is too broad.
“Our occupation is giving advice on direct assets, but also raising capital for the country. That’s what we do.”
The test is run by the soon-to-be-defunct Financial Adviser Standards and Ethics Authority but must be taken by a wide range of occupations in the financial services industry, including accountants, stockbrokers and mortgage lenders who are also licensed to provide advice.
The banking royal commission revealed financial advisers were incentivised by the big banks or wealth companies to peddle in-house products that were not in the best interests of clients. Mr Sheahan said now the entire industry had been penalised.
If they fail, it’s a cliff. They are about to get pushed off the cliff, through no fault of their own.
Stockbrokers and Financial Adviser Association chief executive Judith Fox
“The banks did really good job of deflecting what really happened. They decided to sell off these businesses and leave the headache for everyone else in industry.”
Judith Fox, chief executive of the Stockbrokers and Financial Adviser Association, said around 65 per cent of all stockbrokers failed the November exam because two-thirds of the questions focused on insurance.
“Stockbrokers don’t handle insurance. They refer people on. They’re not authorised to give advice in insurance,” Ms Fox said. “Even in the practice exam, there’s questions about aged care. These are questions that require technical knowledge.”
“It’s throwing stockbrokers into despair, they go how am I meant to pass an exam that’s about things I don’t deal in?” Ms Fox said.
“These are people, with no complaints, with happy, longstanding clients, being asked to sit a financial planners exam. If they fail, it’s a cliff. They are about to get pushed off the cliff, through no fault of their own.”
Mr Fox has lodged a number of complaints with FASEA, calling on the body to create new exams that are tailored to specific professions, but she said these have been routinely ignored.
“We’ve said we think this is discrimination. You can’t ask them to sit an exam that’s about a different service than what they offer,” Ms Fox said. “Investment in equities is totally different from financial planning … It’s been driving us absolutely batty.”
FASEA chief executive Stephen Glenfield said the exam asked participants to apply an ethical lens to range of scenarios and did not require technical knowledge. He rejected calls to create an industry-specific test, but said the next exam results will include more granular feedback after receiving complaints from the industry.
“I do understand it. It is stressful. You do have to pass to continue practicing. We’re trying as best we can to help people understand through webinars and providing practice exams.”
Mr Glenfield said the results had varied from firm to firm, adding the average pass rate was now 89 per cent across all occupations.
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Charlotte is a reporter for The Age.