Advisers in relatively large advice practices and advisers with between five and 10 years of experience appear to be finding the cost and time impost of sitting the FASEA exam much easier to bear than other advisers, CoreData research has revealed.
Last week we revealed the first insights into how much time and money the FASEA exam is costing advisers, but also revealed that the changes to the industry’s minimum education standards are strongly supported by the general public.
We indicated that we’d undertake further analysis to see whether an adviser’s experience (measured by years in the industry) or size of the practice they work in (potentially as a proxy for the resources available to support them) has a bearing on the combined time/cost impost.
A deeper analysis of the CoreData Q3 2020 Adviser Pulse Survey results suggests that both measures do have a bearing on the time and money an adviser needs to invest to study for and sit the exam. However, a wide range of experiences have been reported, irrespective of size of practice and years of experience.
Our analysis shows that about 60 per cent of advisers in practices that have more than 11 advisers say the cost to them of sitting the FASEA exam was less than $1000. Only one in four (25.0 per cent) of advisers in firms with two to 10 advisers, and about one in five (20 per cent) of advisers in single-adviser firms report the exam cost less than $1000.
However, while the majority of advisers in firms with 11 to 20 advisers say the cost was less than $1000, 20 per cent of advisers in such firms say the cost was more than $10,000. And around a quarter (26.4 per cent) of single-adviser firms say the cost was between $2500 and $5000.
There seems to be something of a sweet spot when it comes to adviser experience, with more than two in five (43.5 per cent) advisers with five to 10 years of experience saying the FASEA exam has cost them less than $1000. Only one in four (24.3 per cent) advisers with 10 years’ experience or more, and a broadly similar proportion (27.3 per cent) of advisers with less than five years’ experience, say the cost has been less than $1000.
More experienced advisers – those with 10 years of experience or more – are slightly less likely to have sat the FASEA exam already compared to their less-experienced colleagues. More than three-quarters of advisers with less than five years’ experience and with five to 10 years’ experience have sat the exam, while only 57 per cent of advisers with more than 10 years’ experience have been through the process.
The revelation last week that some advisers say the FASEA exam has cost them less than $1000 created disbelief among some New Model Adviser readers, with suggestions that the true cost of studying for and sitting the exam is unlikely to be less than $8000 per adviser, based on an adviser’s assumed hourly charge-out rate of $330 an hour.
Our research indicates that one in 20 (5.5 per cent) of the 182 advisers in the quarterly survey who’ve sat the exam say it cost them between $7500 and $10,000, and 8.8 per cent say it cost more than $10,000.
