JOHANNESBURG –The Financial Services Board (FSB) has extended the deadline for the first phase of its regulatory exams by six months after poor enrolment and in order to accommodate those who failed.
The original deadline to complete the first phase of the regulatory exams (RE 1) was December 31 2011, but due to the poor response the FSB has extended the deadline to June 30 2012. The deadline for RE 2 product exam deadline however, remains the end of December 2013, while for RE 3 and RE 4 the deadline has been pushed out to September 30 2012 and December 2012 for rewrite.
“FSB acknowledges that difficulties have been experienced since the inception of the examination process,” it said in a communiqué dated July 13.
Asked why the enrolment was poor, Gerry Anderson, the deputy executive officer for financial advisory and intermediary services and market conduct at the FSB said: “I would ascribe that to a later rollout than was expected by the bodies who provide the examination ... The process took longer than estimated ... some of them were only able to make their access later than what was expected.”
According to the FSB, the purpose of the examination is to ensure that there is at least a minimum standard within the industry as far as knowledge about the Financial Advisory and Intermediary Services Act (FAIS) and rendering of financial services are concerned.
Out of the 149 440 candidates expected to write only 17 302 or 11%, had written by the end of June this year. The FSB said a large number of candidates had enrolled to write by end of September 2011.
According to Anderson, the candidates are made up of key individuals and representatives of financial service providers and will include car salesman who elect to sell insurance to clients.
Those who elect not to sell insurance do not have to write, Anderson said. According to the FSB, key individuals in relation to an authorised financial services provider include people who manage and oversee the business and render advisory or intermediary services.
The body has refused to divulge the results stating that it will publish them after 25% of the candidates have written. Anderson said the sample is too small to give an accurate indication of the pass rate. However, it has publicised the success of 81 year old Clive Archer, who got a 74% pass mark.
Some financial advisers and intermediaries say it is rumoured that less than 30% or about 5 000 of those who have written have passed. But Anderson said he would not comment on “perceptions or speculation”.
In an earlier circular dated July 12, the FSB said: “The early statistics suggest that the main cause for candidates failing the examination is lack of proper preparation. Candidates it is believed, tend to underestimate the time that has to be set aside to effectively and sufficiently prepare for the examination. The current upward trend in the success rate of candidates suggests that there is a greater appreciation of the time required for proper preparation.”
In order to further assist candidates with the exams, the FSB said it was in the process of updating the preparation guide to include a complete mapping of the qualifying criteria against the relevant legislation.
Some participants have also requested that the pass mark be reduced to 50% from 65%. The FSB said this will “defeat” the purpose of ensuring that people rendering financial services to clients know what is expected of them under the FAIS Act.
Anderson said the exams were not a disaster as there were a lot of people who told him that they had learnt a lot and as a result the consumer will be better served.
Asked if he was positive that all the candidates would have written by the deadline, he said:
“Everybody with the positive mindset, I would say the greater majority, will write and those who need to rewrite have until September 2012.”
He said it was expected that about 10 000 people a month going forward would write the exam, adding that those who were not successful should prepare and go and write again.
