Important next steps for existing financial advisers who have not passed the exam and their licensees

  • Financial advisers who are eligible for the exam extension but have not passed the exam, have an opportunity before 30 September 2022 to limit the consequences of the fact they have not passed the exam.
  • Financial advisers who have not passed the exam and have had their authorisation to provide personal advice ceased by 30 September 2022 will only need to pass the exam to be eligible for re-authorisation.
  • Financial advisers who have not had their authorisation ceased by 30 September will not only need to pass the exam but will also need to complete a professional year and obtain an approved degree before they can be re-authorised.
  • ASIC recommends that affected financial advisers speak to their licensees as soon as possible to ensure their authorisation to provide personal advice is ceased on or before 30 September, and the Financial Advisers Register (FAR) is updated to reflect this.

Financial advisers who are existing providers were required to have passed the financial adviser exam by 1 January 2022 (unless they were eligible for the exam extension until 1 October 2022) in order to continue to provide personal advice to retail clients on relevant financial products (personal advice).

Financial advisers who were not eligible for the extension and did not pass the exam by 1 January 2022 are no longer authorised to provide personal advice.

If you are eligible for the exam extension but have not passed the exam in any of the 3 exam cycles held in 2022, you won’t be able to provide personal advice from 1 October 2022.

Next steps for financial advisers who are currently operating under the exam extension

For financial advisers who are eligible for the exam extension, but have not passed the exam in 2022, there is an opportunity for you to take steps with your Australian financial service (AFS) licensee to limit the effect of this outcome.

If your licensee ceases your authorisation on or before 30 September 2022, you will still need to pass the exam before you can become re-authorised and re-commence providing personal advice. However, you will not need to complete a professional year and you will have until 1 January 2026 to obtain an approved degree.

If your licensee does not cease your authorisation on or before 30 September 2022, it will cease by operation of the law and you will no longer be able to provide personal advice. To become re-authorised and re-commence providing personal advice you will need to complete a professional year and obtain an approved degree in addition to passing the exam.

For more information, see ASIC’s Financial Advisers’ Quick Reference Guide.

Next Steps for AFS licensees who authorise financial advisers

ASIC strongly encourages AFS licensees to:

  • review your records to identify any financial advisers you authorise who have not passed the exam;
  • discuss the consequences of not having passed the exam with the affected advisers, including that they cannot provide personal advice from 1 October 2022; and
  • carefully consider the timing of ceasing the authorisation of affected advisers and comply with your obligations to notify ASIC that these advisers are no longer authorised to provide personal advice.

Generally, licensees are required to notify ASIC within 30 business days of certain changes for financial advisers you authorise, including if you cease their authorisation to provide personal advice.

For more information about updating the FAR please see our guidance on ceasing a financial adviser on FAR.

It is critical that the FAR is maintained to ensure that the public can reference accurate and up-to-date records when making decisions about whether to engage an adviser.  Under the Corporations Act 2001, AFS licensees are responsible for ensuring that details about their financial advisers on the FAR are correct. This includes updating the status of financial advisers who have not passed the financial adviser exam by the required date to ‘ceased’.

ASIC is Australia’s corporate, markets and financial services regulator.

Last updated: 01/09/2022 12:00