FASEA EXAM INSIGHTS #5 Key Knowledge areas to understand BEFORE the exam

This is an ethical advice exam.  One of the key knowledge areas will be to know the interrelationship between the Chapter 7 Part 7.7A Best Interests Duty (BID) and the new Code of Ethics.

At first glance, the Code of Ethics appears to be adding an ethical overlay on top of the Part 7.7A Best Interests Obligations.

However, on a closer reading it does far more than that.   The devil is usually in the detail and this is the case with the Explanatory Statement to the Code of Ethics.

The ethical platform is laid down in Standard 2 in a two-part statement, “You must act with integrity and in the best interests of each of your clients”

It demands that advisers act ethically to the highest professional standards, but it expressly binds advisers to do, or not to do certain actions.

Here is just one of many examples.

This one is found in Paragraph 36 of the explanatory Statement:

“You should take into account your client’s express wishes but these do not override your duty to give advice that is in the client’s best interests.”

This effectively removes a long held belief by some that the client is always right; and that advisers should give demanding or misguided clients what they want, regardless.

Indeed it is an adviser’s job to help clients to achieve the outcomes they want, but not always via the means the client wants.

As all advisers know, clients are sometimes prone to acting on impulse and reacting to peer pressure and greed; and all too often it can override caution and common sense.

This interpretation of the code prevents an over-obliging adviser from taking advantage of an insistent client, and / or appeasing demanding or misguided clients with inappropriate advice that would not be in their best interests.  In other words, it expressly obligates advisers to save clients from themselves.

The Code reinforces advisers as professionals with the training and experience to know the risks, problems and liabilities that can await clients down the track; with a duty to steer them in the right direction.

The following are some example of situations that are likely to be addressed by this statement (this is not an exhaustive list):

  • Agreeing with insistent clients to proceed with a SMSF, knowing that it is inappropriate advice, and without sufficient inquiry into their relevant circumstances
  • Acting for both spouses in separation and divorce proceedings
  • Willingly over-gearing greedy clients into margin lending products when it is clearly inappropriate to their relevant circumstances
  • Recommending over-risky superannuation investments to achieve an over-ambitious  client retirement target where the client clearly doesn’t understand the risks
  • Willingly going along with client wishes and allowing them to getting themselves into trouble as a result of a range of ‘bar-b-que’ advice received from friends and relatives

For other examples of how the new Code of Ethics builds on the Corp Act best Interests Duty, register for one of my adviser exam tutorial programs.

You have the choice of

  1. The 10-week live online version (starting 7th August) or
  2. The DIY Home Pack version. More information at http://garyweigh.com/

FASEA EXAM INSIGHTS #6 ‘Handy tips on how to prepare for your exam’ coming soon.

To catch up missed EXAM INSIGHTS read them at http://garyweigh.com/blog/

FASEA EXAM INSIGHTS #4: A practical approach to preparing for an ethical advice exam

The aim of the adviser exam is to ensure every advice provider has the knowledge and ethical reasoning ability to be able to navigate their way through the obstacle course of incentives, conflicted remuneration, competing priorities and work pressures to achieve great advice outcomes for clients.

Therefore, a very important part of your exam preparation should be to practice recognising Ch7 Corporations Act breaches and Code of Ethics breaches in a wide variety of adviser-client situations.

It starts by being able to identify illegal and unethical behaviour and unfortunately, there is a long unflattering history to call upon.

These behaviours include baseless product switching, over the counter super & insurance selling, SMSF property scams, hawking, inducement, early super release schemes, inappropriate margin lending, and so on.

Whilst many of these practices are being quickly being consigned to history, I am not certain that all advisers recognise the fact that cookie-cutter (one-size-fits-all) advice and client over-servicing, even in small doses, are also on the no go list.  In RG175.255 & RG175.403 respectively, ASIC makes it quite clear neither is permitted.

Doing the right thing relies on an ethical mindset and having advice processes in place that reflect this mindset.  After all, an adviser’s advice process is the engine room where all client recommendations are generated.  If it is flawed, so is the advice.

ASIC provides specific guidance on advice processes in RG175.254 and clearly sets out its expectation that advice providers must have advice processes that ensure compliance with the best interests duty.

Also noteworthy is subsection (d) of this same section, ASIC clearly expects that advice providers focus on providing advice that is not product specific, whether or not it is in combination with product advice.

Adding to the importance of getting the advice process engine room right, the new Code of Ethics weighs in on the issue in Standards 7-9, which specifically highlight areas such as money, consent, ‘good faith’ product recommendations and record keeping.

Not only does this suggest the need for regular and honest assessment of adviser advice processes, it also demonstrates that the new Code of Ethics isn’t the only show in town.  The Corporations Act (from which the Regulatory Guides are derived) is alive and well and continues to play a big role in shaping good advice.

So, to identify Licensee and adviser behaviour to be avoided and at the same time prepare for the exam, there are a number of places to look for examples:

  • RG175 Licensing: Financial product advisers—Conduct and disclosure has over 20 helpful examples in section E – “Acting in the client’s best interests and related obligations”
  • RG244 Giving information, general advice and scaled advice has many helpful examples plus a very useful Appendix starting at page 37
  • Explanatory Statement to the Financial Planners and Advisers Code of Ethics 2019, contains examples and case studies
  • ASIC News Centre – Media Releases https://asic.gov.au/about-asic/news-centre/find-a-media-release/ a good source of relevant real life examples that had resulted in licence cancellation and adviser banning and, in some cases, custodial sentences.
  • Royal Commission Final Report is listed on the FASEA extension reading list. Volume 2 of that report contains many real life examples that could be drawn upon (e.g. selling of superannuation through CBA branches p79; Aon Hewitt non-consent super switching p263)

# FASEA EXAM INSIGHTS #5 Key knowledge areas to understand BEFORE the exam coming soon!

To catch up missed EXAM INSIGHTS read them at http://garyweigh.com/blog/

#fasea #adviser #exam

FASEA EXAM INSIGHTS #3: Short Cuts to understand BEFORE taking the exam

Working smart can help put structure and logic into your adviser exam preparation.

So there are two parts to preparing for the adviser exam.  They are acquiring knowledge and applying knowledge.



There is such a lot of reading to go through so it makes sense to prioritise.  So try applying the 80/20 rule as follows:


These are the really important bits that you need to know inside out.  At the minimum these include:

  • Financial Planners and Advisers Code of Ethics AND Explanatory Statement
  • Disclosure and conduct obligations
  • Best Interests Obligations
  • TPB basics for tax financial advisers PLUS the Code of Professional Conduct
  • AML / CTF basics and resources for financial planners
  • Privacy as it applies to financial advice situations


At the minimum, you should have a good general knowledge of everything else on the FASEA suggested reading list.  Your level of understanding needs to be good enough so that if you see it in an exam question, at least you will recognise it and be able to make some educated decisions.

Tip: Reading the Corporations Act will get you a good night’s sleep but the way to absorb the important stuff is to use the Regulatory Guides where possible.  These guides exist where ASIC deems the subject matter to be important. RG121, RG175, RG244 and RG246 should be your best friends. And like best friends do, they provide helpful summaries of the important bits and many very useful examples. 




Sitting in workshops and presentations is helpful but doing is learning!

In my 10-part program, I have created over 240 practice questions in multiple choice true-false and open-ended formats where you can test and apply your knowledge and check your answers.  You will get to practice on every topic.

And just when you think you have exhausted yourself, I have another multi-question mock exam for you to attempt.  This will be made available to you prior to sitting your adviser exam.

# FASEA EXAM INSIGHTS #4 A practical approach to an ethical advice exam coming soon!

To catch up missed EXAM INSIGHTS read them at http://garyweigh.com/blog/


FASEA EXAM INSIGHTS #2 “Understanding how the adviser exam is generated!”

What became obvious in the first FASEA adviser exam sitting is that the content of the exam over the duration of the June exam period changed.

Exams written in different venues on different days were similar but different.  The reason for this is the way in which exam questions are generated.

The adviser exam process was contracted out to Australian Council for Educational Research (ACER) and there is a very good reason that the adviser exam is sat via dedicated computer rather than via printed exam papers.

It allows questions to be easily generated digitally from a ‘question bank’ via an algorithm directly onto the screen in front of each adviser.

Typically, exam question banks of this nature consist of a variety of questions in a number of ‘degree of difficulty’ categories.

It is therefore possible that each adviser sitting an exam on the same day could be presented with a different exam.  However, these exams contain open ended questions that may require human intervention to assess, so these may be some practical limits.

Notwithstanding, there is not a lot to be gained by trying to share the contents of any given exam because the questions are always changing, albeit subtly.  And, as the question bank grows, there will be many more options for individualising exams.

The question bank will continue to grow because examiners have plenty of question fodder, given the chequered history of the financial services industry over the past decade or so.

There’s no shortage of dodgy schemes, deception, fraud, other illegal activities, spectacular collapses, licence cancellations, adviser banning and incarcerations that can be used to construct scenarios and questions.

Whilst a positive result in this exam is very achievable, it should not be taken for granted.  The only way to approach it is to put in some serious reading time to gain a good general knowledge across all areas of the curriculum.

However, who said that advisers can’t work smart as well as hard in the exam preparation.  Working smart will be the subject of the next article.


# FASEA EXAM INSIGHTS #2 (Short Cuts to understand BEFORE taking the exam) coming soon!

To catch up missed EXAM INSIGHTS read them at http://garyweigh.com/blog/

FASEA EXAM INSIGHTS #1 June Exam Wrap-up

This is the first of a 6-part series of insights into the FASEA adviser exam.

Some 600 advisers sat the first round of FASEA exams this month. Even though the specific content of future exams will continue to change across and within the next 8 sittings or so, there are some valuable takeaways that can be applied to every exam.

Firstly it is important to understand the significance of the exam curriculum published by FASEA.

  • Financial advice regulatory and legal obligations
  • Applied ethical and professional reasoning and communication
  • Financial Advice Construction

I interpret this as:

  • Know the rules that existed pre-FASEA (i.e. Ch7 Corporations Act, Privacy Act, AML / CTF, TASA)
  • Know the new Financial Planners and Advisers Code of Ethics 2019 plus Explanatory Statement) really well; and be able to recognise breaches and potential breaches in any personal advice situation
  • Know how to construct personal advice lawfully and ethically that is genuinely in the best interests of the client by any definition

In your exam preparation, the first step is probably the most challenging.  That is, knowing the pre-FASEA rules.

A large part of it is contained in ‘Vol 4 & Vol 5’ of the Corporations Act (ref. FASEA reading list).  The reading list reference looks innocent enough but there is a lot of it.

Even though every adviser was expected to have known all of this for the past few years, my experience to date is that most don’t.  And then there’s the other legislation mentioned above.

Many advisers have missed the fact that the Tax Agents Services Act 2009 also contains its own Code of Professional Conduct which binds every adviser by way of membership of the TPB. There is a lot of examinable information relating to tax financial advisers on the TPB site.

Expect a question on privacy because it is paramount for clients. Know the requirements for inter-office transmission of personal information, as well as local and overseas outsourced services (e.g. para planning, investment and audit services) plus third party referral situations.

Because financial advisers are ideally placed to detect suspicious individuals, organisations, beneficiaries and financial transactions, focus on suspicious matters that must be reported to Austrac. It is not only about money laundering and terrorism financing issues. It also includes tax evasion, superannuation and Centrelink fraud.

The new Financial Planners and Advisers Code of Ethics 2019 is FASEA’s pride and joy. It will feature prominently in every exam so know both the code and the Explanatory Statement inside out.  The latter contains some helpful examples in the Appendix.

It is also vital to understand where and how the Code of Ethics extends adviser obligations in the Corporations Act.  And don’t forget to read FPS003 Professional Year Policy and FPS004 CPD Policy.  They too will feature in an exam..

When looking for ‘applied ethics’ examples, focus on the long and unflattering history of the financial advice industry.  Consider the structure of the industry, where advisers and planners are employed, and the various pressures that advisers work under in different employment environments.

Focus on where the law has changed in response to society pressure and government policy e.g. conflicted & banned remuneration, fee for service and product switching.  More to come later!

Finally, some words of warning for financial advisers who specialise in one area only, e.g. risk insurance advisers.  This is an exam for all advisers.

This means exam scenarios, from which several questions will subsequently flow, are likely to cover a multitude of situations.  Whilst it is doubtful that the exams will be over-technical, it will help to understand the basics and terminologies of all relevant advice disciplines.

# FASEA EXAM INSIGHTS #2   “Understanding how the adviser exam is generated” coming soon!

National Adviser Exam – Don’t Stand in the Shadow of the 2021 Deadline

I have been receiving feedback recently that many advisers are considering deferring the exam until next year; apparently, a strategic ‘wait until the dust settles’ approach.

If you wait until next year, you will have the added pressure of ‘standing in the shadow of the guillotine’; being the figurative instrument that will sever you from your business or employment on 1 January 2021 if you don’t pass the exam.

My advice is to start your pre-exam study program and sit in September or December this year. At worst, a resit may be required early next year. Either way, you won’t subject yourself to the unnecessary stress of such a harsh and ever-looming deadline.

At the completion of my first tutorial program, there is consensus that that none of the topics in the FASEA exam curriculum is particularly difficult, but most advisers were surprised at the large amount of ground there was to cover.

Two advisers in my current program are sitting the June exam (the rest in September). Both advisers positively embraced the program, prioritised time, and were diligent in their reading and preparation. If they stay calm in the exam and manage their time well, they will succeed.

FASEA Adviser Exam – From Misery to Confidence

After week 7 of my first 10-week Adviser Exam Online Tutorial Program, I have two advisers who have already enrolled in next month’s FASEA exam sitting.

Originally we were targeting September which would allow everyone to first sit the Kaplan fully supervised practice exam. And that will still be the case for the majority.

The change of dynamics in this group has been very pleasing. Seven weeks ago it was the gloomy silence of shared misery and now I sometimes have to use the Zoom mute button to get a word in.

Once these guys and girls got back into a weekly routine of reading, practice questions and group discussion, they have really grown in confidence.

Read their testimonials at http://garyweigh.com/testimonials/

The National Adviser Exam just got Technical

With an extension reading list that looks like an advert for a university bookshop clearance sale, FASEA released its adviser exam timetable late last week.

Also in the release is a set of exam practice questions. Whilst it is valuable insight into the way exam questions might be presented, there are some concerns for specialist risk insurance advisers.

Among the questions are references to estate planning issues and Centrelink rules. This suggests that there may be a sprinkling of technical-related content in the exam.

Whilst all advisers should have a handle on powers of attorney and the need for a will, risk insurance advisers might want to brush up on the basics in other technical areas.

The Peril of Delaying the National Adviser Exam

FASEA indicates that National Adviser Exams will be scheduled quarterly in 2019 commencing mid-June; and then bi-monthly in 2020.
So that suggests 8-9 exam opportunities before the 1st Jan 2021 deadline for all existing advisers to pass this exam.  It sounds like a lot but it’s an illusion.
According to the feedback I receive from risk and wealth BDMs, the majority of advisers are adopting a strategy of wait and see.  So most won’t sit the first FASEA in mid-June; and what a bad idea it would be to leave it till the last exam to start.  Realistically that leaves 6-7 remaining opportunities at best to sit the exam.
But here is the problem!
If you fail your first attempt you won’t be allowed to register again for another 3 months. Bear in mind that there will be a time gap between ‘register’ and ‘sit’.  That means you will miss at least the next scheduled exam opportunity before you can register and then resit.
So realistically there will only be 3-4 exam opportunities available to most advisers. If you ignore it and delay until next year the pressure will start to intensify as 2020 rapidly goes by.
Whether you use my tutorial program service or not, I strongly suggest that you start studying and revising now and aim for the September exam. Then if you need a resit, it is likely you’ll do it in Feb next year.
Getting this exam out of the way, done and dusted by next February would be a whole lot better than starting at that time.
Having an early pass mark means peace of mind that you get to stay in the financial advice industry and keep your business or well-paid job as a result.
The peril of delay is that the longer you delay the greater the risk to your means of future income.

National Adviser Exam – 4 Things Stood Out

When I first read the FASEA National Adviser Exam Policy, four things stood out.

1. It looks very much like an examination of the process of providing advice within the bounds of the law and relevant codes, regardless of technical specialty.

2. The length of the exam is quite long at 3.5 hours including 15 minutes reading time. I cannot recall ever having sat an examination of that length, even at post-graduate level. Be prepared, it’s a long time to maintain focus under exam conditions.

3. The exam format is reminiscent of a first year University exam where 300 or so first year students are seated in a large exam centre surrounded by invigilators. Whilst it will be a familiar experience for those who have previously attended University, it may be daunting to advisers who have not, particularly older advisers.

4. The pass mark is set at credit level (e.g. 65%), not 50%, which is not unusual for professional accreditation

On the positive side of course, the subject matter of the exam should be very familiar to most. However, advisers should not to take this exam for granted because the devil is likely to be in the detail of the legislation, regulatory guides and the relevant codes of ethics and conduct.