Advice / APAC / Global / Industry / Legislation

Is this the sweet spot for advisers and the FASEA exam?

Advisers in relatively large advice practices and advisers with between five and 10 years of experience appear to be finding the cost and time impost of sitting the FASEA exam much easier to bear than other advisers, CoreData research has revealed.

Last week we revealed the first insights into how much time and money the FASEA exam is costing advisers, but also revealed that the changes to the industry’s minimum education standards are strongly supported by the general public.

We indicated that we’d undertake further analysis to see whether an adviser’s experience (measured by years in the industry) or size of the practice they work in (potentially as a proxy for the resources available to support them) has a bearing on the combined time/cost impost.

A deeper analysis of the CoreData Q3 2020 Adviser Pulse Survey results suggests that both measures do have a bearing on the time and money an adviser needs to invest to study for and sit the exam. However, a wide range of experiences have been reported, irrespective of size of practice and years of experience.

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Our analysis shows that about 60 per cent of advisers in practices that have more than 11 advisers say the cost to them of sitting the FASEA exam was less than $1000. Only one in four (25.0 per cent) of advisers in firms with two to 10 advisers, and about one in five (20 per cent) of advisers in single-adviser firms report the exam cost less than $1000.

However, while the majority of advisers in firms with 11 to 20 advisers say the cost was less than $1000, 20 per cent of advisers in such firms say the cost was more than $10,000. And around a quarter (26.4 per cent) of single-adviser firms say the cost was between $2500 and $5000.

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There seems to be something of a sweet spot when it comes to adviser experience, with more than two in five (43.5 per cent) advisers with five to 10 years of experience saying the FASEA exam has cost them less than $1000. Only one in four (24.3 per cent) advisers with 10 years’ experience or more, and a broadly similar proportion (27.3 per cent) of advisers with less than five years’ experience, say the cost has been less than $1000.

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More experienced advisers – those with 10 years of experience or more – are slightly less likely to have sat the FASEA exam already compared to their less-experienced colleagues. More than three-quarters of advisers with less than five years’ experience and with five to 10 years’ experience have sat the exam, while only 57 per cent of advisers with more than 10 years’ experience have been through the process.

The revelation last week that some advisers say the FASEA exam has cost them less than $1000 created disbelief among some New Model Adviser readers, with suggestions that the true cost of studying for and sitting the exam is unlikely to be less than $8000 per adviser, based on an adviser’s assumed hourly charge-out rate of $330 an hour.

Our research indicates that one in 20 (5.5 per cent) of the 182 advisers in the quarterly survey who’ve sat the exam say it cost them between $7500 and $10,000, and 8.8 per cent say it cost more than $10,000.

4 Comments

  1. cs@inyourinterest.com.au' Christoph Schnelle says:

    I spent a weekend reviewing the code and relevant legislative instruments, in particular RG175. That was about 10 hours where I wouldn’t have earned anything and then it was 2/3 of a day to drive to the venue, do the exam and go back but I could combine that with other activities. I didn’t lose any revenue and the experience was part of my training so I did not feel the need to account for it at full charge out hours. That makes less than $1,000 or, at most, a little more.
    Learning what a government-appointed body considers to be ethical or not ethical was and is very valuable and a mandatory part of my knowledge.

    • adam@halesdouglass.com.au' Adam Passwell says:

      Hi Christoph, economics 101 mate, Opportunity Cost. Look it up to see what it really cost you.
      And what is your hourly charge rate for a 1 hour fee for service consult ?

  2. adam@halesdouglass.com.au' Adam Passwell says:

    Hi Simon, Please explain how it costs less than $1,000 for FARSEA’s exam ??
    Exam fee = $540 + GST = $594
    Exam time = 3 hrs + 10 mins x $$Hourly rate = ?? Less than $400 in total
    Plus travel time if not sitting remotely.
    So these experienced Advisers hourly charge rates = less than $130 / hr.
    What a load of survey statistical rubbish.

    Sorry Simon but your research and analysis is farcical.

    Please go and directly speak to and gather real information and ask these 27% of advisers what their hourly rate is = $$ ??? / hr
    And how they can pay for the exam and spend 3 hrs, 10 mins sitting the exam for less than $1K in total.
    And of course that $1K also includes study time and costs, of which they must have spent ZERO study time or costs.
    Please explain how that can possibly cost less than $1K ?????

    CoreData – you guys know as well as anybody that the way survey questions are asked and the statistics produced can be used to prove any point.
    Stats 101 in every Uni degree shows how questions and statistics can be screwed to tell the story you want to tell.
    Please show some Ethics with your research and journalism Simon because your FARSEA stories and minimal adviser costs line is FALSE !!
    It’s very clear the story you want to tell.

    And how much does each FARSEA course cost too Simon, minimum study required per course of 120 hrs x $$ charge rate = $$ ??
    Nice of you to totally omit that very expensive opportunity cost piece of information to suit your story even more about how little FARSEA is costing Advisers.
    Every Adviser must do at lest 1 FARSEA subject plus exam as minimum, regardless of previously study and experience.
    And many more adviser will have to do a lot more than 1 subject.

    ASIC did a wonderful hatchet job with their SMSF costs fact sheet, that has now proven to be completely misleading. Not that ASIC will admit their left wing, Industry Fund loving, hate campaign against SMSF’s but at least they have had to correct the record with real SMSF running costs. But they wont publish an updated SMSF fact sheet because it no longer tells the hatchet job they set out to con people with.
    Simon, your hatchet job of Adviser FARSEA costs needs to be reviewed. Please look to do some real jounro work and research.
    Start by asking yourself how is it possible to do the FARSEA exam, exam fee, study time and costs and actual exam time for less than $1K ??

    Extremely disappointed in Coredata and you Simon.
    Adam Passwell

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