Almost a third of participants in the latest mandatory compliance exam for stockbrokers have failed, sparking fresh criticism of the test, which quizzed finance professionals on topics such as relationship breakdowns and the emotional state of clients.
A range of financial services advisers have been forced to sit a mandatory exam that tests knowledge of corporate laws and ethics by providing a series of hypothetical situations and multiple-choice questions. The test has been written by the soon-to-be-defunct Financial Adviser Standards and Ethics Authority (FASEA) and must be taken by occupations including accountants, stockbrokers and mortgage lenders that are also licensed to provide financial advice.
FASEA released figures on Tuesday showing 31 per cent of all participants failed the March exam, an improvement from the 33 per cent recorded at the January sitting. The overall pass rate is now 89 per cent, with 83 per cent across stockbroking firms – although FASEA’s data does not differentiate between brokers and advisers at these firms.
The Age and Herald previously revealed stockbrokers at top firms including Shaws, Morgans and Bell Potter, had failed the test en masse because the exam questions cover material irrelevant to their jobs. Bell Potter has said the industry would be “happy to fund” a new exam that is tailored to stockbrokers, but this offer has been rebuffed.
One stockbroker at a top firm with more than two decades’ experience, who could not be named because he was not authorised to speak publicly, was among the cohort who failed the latest sitting and said he was perplexed by some of the questions.
“There were questions in there that really didn’t have any relation to anything I’d even seen in study material, or what I do,” he said. “There was one random question about a couple that had financial stress in their relationship and what percentage of these relationships would fail.
“The answers were [percentages] that all had decimal points,” he said. “I don’t know whether I got it right or wrong. They don’t tell you.”
“What they’re trying to do is jam triangular pegs and round pegs into square holes,” said the broker.
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