Following the release on 20 March 2018 of proposed guidance on education pathways for all advisers and the code of ethics, the Financial Adviser Standards and Ethics Authority (FASEA) released their proposed guidance on the financial adviser examination (Exam) on 11 July 2018.

More recently on 24 July 2018, FASEA released guidance for feedback covering continuing professional development (CPD) and the Professional Year.

This article provides a summary for financial services professionals on this proposed guidance. Refer to the earlier article Adviser education pathways and Code of Ethics for more details on the education pathways and code of ethics.

The key details of the proposed requirements for the Exam, CPD and the Professional Year are outlined below.

The Exam

The financial adviser examination is intended to ensure consistent, minimum professional standards of education and competency apply to financial advisers nationally. The draft guidance establishes the key parameters of the Exam, as set out in the table below:


The Exam covers:

  • 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

Percentage of assessment:


Exam format
  • A total of 75 questions at AQF7 level (i.e. Bachelor degree level), split between a maximum of 70 multiple-choice questions and a minimum of 5 written response questions.
  • The duration of the Exam is expected to be between three and four hours
  • A scaled passing score of 65%, with a pass mark of 75% for the FASEA Code of Ethics and a 50% pass mark for the other areas
  • A maximum of two resits, with a defined period between each resit. Additional resit may be applied in exceptional circumstances (e.g. illness)
Delivery mode
  • Face to face locations in all capital cities, with the option of digitally overseen delivery for remote areas or for those individuals who cannot travel to the physical location
  • Closed book exam
  • Existing advisers – monthly from mid 2019 until December 2020 in capital cities and less frequently in regional centres. The examination will be piloted in the first half of 2019
  • New entrants – at least four times per year
Special considerations
  • Individuals with a disability or other special needs will be able to request assistance to allow them to sit the Exam
  • Special consideration is available to individuals who are unable to sit or complete an exam due to exceptional circumstance beyond their control. This must be supported by convincing evidence of the exceptional circumstances such as medical certificates.
Learning / study
  • FASEA may publish a recommended reading list, however, FASEA does not intend to provide examination preparation courses. 

Existing advisers who were authorised before 1 January 2019 will be required to pass the Exam before 1 January 2021.

From 1 January 2019, new entrants, or those advisers returning to the industry after 5 years without practicing, will be required to pass the Exam after they have completed their tertiary degree, and before the commencement of their Professional Year.


The CPD requirements apply to all advisers, with the exception of provisional advisers who are in the process of Professional Year. Professional Year requirements will be explained later in this article.

Total CPD hours
  • A minimum of 50 hours per annum, 70% of which must be approved by the adviser’s licensee
  • Types of CPD may include:
    • Formal relevant education provided by an Education Provider, including FASEA approved bridging courses and approved degree studies, to a maximum of 25 CPD hours per year
    • Non-formal education, including education to obtain a relevant professional designation, or education in specific financial advice areas or products
    • Other CPD, including PD days, sessions, workshops and professional or technical reading. Professional or technical reading is capped to a maximum of 7.5 hours
CPD composition

CPD categories:

  • Technical competence 
  • Client care and practice
  • Regulatory compliance and consumer protection
  • Professionalism and ethics
  • Other Advisers/Licensee selected CPD 

Minimum standard per year:

5 CPD hours
5 CPD hours
10 CPD hours
10 CPD hours
20 CPD hours 

CPD framework
  • Advisers and their licensee are encouraged to maintain a Professional Development Plan (PDP)
  • Licensees must maintain and publish a CPD policy
  • CPD records of each year must be kept for a minimum 6 years

Professional Year – applicable to new entrants only

A new entrant must undertake a minimum of 12 months of full time equivalent relevant work and training (i.e. a Professional Year) before they can provide personal advice to retail clients without supervision. During the Professional Year new entrants will be registered as Provisional Relevant Providers, and must be supervised by one or more existing advisers who have at least two years of advising experience (Supervisor).

Responsibilities of the key parties

Roles Responsibilities
New entrant (Provisional Relevant Provider)
  • Meet the work and training requirements
  • Not hinder the Supervisor
  • Record appropriate evidence of relevant activities undertaken in a logbook, and collect evidence of having satisfied the work and training standard
  • Ensure the appropriate supervision is provided to the Provisional Relevant Provider
  • Approve, in writing, the Statement of Advice provided to the client and is taken to have provided the advice
  • Ensure that the client is provided with disclosures about the Provisional Relevant Provider’s role and expertise
  • Review and validate evidence of the Provisional Relevant Provider having satisfied the work and training standard
Financial services licensee
  • Provide the appropriate resources and opportunity to ensure that the work and training standard has been met, demonstrated through the collection and recording of evidence

What does the Professional Year comprise?

The 12 months of work and training will be equivalent to 1,800 hours, split between:

  • 800 hours of education and training, including relevant formal education such as a FASEA bridging course unit or a professional designation; and
  • 1,000 hours of work and supervised experience.

The Professional Year will encompass practical learning of four core technical competencies, namely technical competence, client care and practice, regulatory compliance and consumer protection, and professionalism and ethics. A quarterly approach to the supervised practical learning has been proposed:

Quarter 1: Client observations and support Supervisor/Experienced Adviser

Quarter 2: Supervised client engagement and advice preparation

Quarter 3 and 4: Indirect supervision of client engagement and advice preparation

Exit criteria

FASEA suggested the following exit criteria to evidence that a Provisional Relevant Provider has completed the Professional Year Program.

Roles Criteria
Provisional Relevant Provider
  • Evidence that they have met all the requirements  as specified in the Professional Year Program across the four quarters
  • Have completed Professional Year logbook
  • Have presented two or three ethical dilemmas, the approach used and outcome
  • Have a career development plan
  • Evidence the training programs undertaken (800 hours)
  • Review and validate evidence of the Provisional Relevant Provider having satisfied the Professional Year Program
  • Attest to the Provisional Provider having completed the Professional Year Program and obtained competence to move to full adviser status
Financial services licensee
  • Conduct an audit on five client files
  • Review that the Provisional Relevant Provider has completed all relevant work and training requirements

Further information

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