Nearly half of registered advisers have passed a mandatory exam with more than 14 months of the transition period remaining, a Senate Estimates Economics Legislation Committee hearing was told last week.

Financial Adviser Standards and Ethics Authority (FASEA) CEO Stephen Glenfield told the hearing the overall pass rate for the 10,000 who made the grade as of August was 89%.

He says the proportion of registered advisers who have passed the FASEA exam is approaching 50%, a sign of commitment from planners to meet the higher education standards set by the government.

Federal parliament approved a Bill last June giving advisers a one-year extension until January 1 2022 to pass the exam, and a two-year extension until January 1 2026 to meet FASEA education requirements.

“FASEA’s role is to legislate standards that assist the transition of the provision of financial advice to a profession and thereby hopefully increase consumer confidence and trust in obtaining financial advice,” Mr Glenfield told the hearing.

“This work aligned to the willingness of advisers to meet raised standards appears to be bearing fruit.

“We are seeing thousands of advisers demonstrating their commitment to higher standards and to remaining in the industry by both sitting the exam and enrolling for additional study.”

Adviser peak bodies have previously warned the profession is seeing an exodus of advisers because of the tougher education requirements, but Mr Glenfield says he “doesn’t have evidence [of it] either way”.

“What I would say is there is another year and a bit of transition on the exams, so you don’t have to pass the exams for another year,” he told insuranceNEWS.com.au.

“So to me, if you’re going to see an exodus from the exams it’s likely to be at the end of the transition.

“The only advice I would give to advisers thinking about whether they are sitting or not is…[the exam] tests your practical knowledge of things that you as an adviser will know so I encourage you to have a go. I also encourage you to prepare for it.”

Meanwhile, the consultation with stakeholders over FASEA’s draft guide for the Code of Ethics that came into effect this year closes today.

The draft guide provides an explanation of the intent and application of the code’s values and standards.

“We’ve received ongoing feedback from the industry and others [asking] ‘how do I interpret it’,” Mr Glenfield told insuranceNEWS.com.au. “So we’ve spoken widely and listened and what we are trying to put out is a guide that helps people interpret it.

“The consultation may well bring out more that we need to discuss and we’re committed to doing that.”

Click here for the draft guide.