(adapted from an article by Gareth Stokes)
It is not often the Financial Services Board (FSB) and Financial Intermediaries Association (FIA) sing from the same hymn sheet. But where the 30 June 2012 deadline (extended from 31 December 2011) for regulatory exams is concerned they seem to be 100% in agreement. With less than 30 days to the deadline both the regulator and financial adviser representative body have warned that the new date is set in stone. “Time is running out for those Financial Services Providers who have not yet completed the RE Level 1 (Key individual for category I, II, IIA, III and IV) and/or RE Level 5 (Representatives of Categories I, II, IIA, III and IV excluding representatives for subcategories and 1.19) examinations,” warned the FSB. “No further extensions are being considered and it is critical that those individuals that have not yet written the examinations do so without delay.”
The FIA urged any late starters to register before 8th June 2012, to give the examination bodies 15 working days to prepare, as the actual last day of writing the exam is Friday 28th June 2012. Joe Kotzé, National Manager: Compliance at the FIA said that financial advisers must sit the exam before the June deadline in order [in the event they fail] to participate in the exam rewrite to be held in September 2012. “Those who qualify to rewrite the exam after June must also note that the final date for registering is the 6th of September in order to write on the 28th of September 2012,” he said.
The Regulatory examination statistics
After reading the respective press releases we decided to ask each of the bodies for up to date examination statistics. Surely, we mused, their ‘set in stone’ proclamation centres on actual examination statistics. How many intermediaries have taken the examination – how many of these individuals have passed – and how many still need to sit?? The FIA referred us back to the FSB… But their best ‘guess’ on the current situation, contained in their 12 April press release, is that about 60 per cent of representatives and 68 per cent of key individuals have successfully passed to date… It seems a tough ask for the remaining 40% (or so) of exam candidates to sit the exam over the next 54 working days.
Get ready for a last minute rush
Licensed FSPs will hopefully have a more accurate picture of their RE compliance. “Individual FSPs will be monitored and the FSB will communicate with them directly to update them on their individual examination status,” said Stefanie Mackenzie, Manager: FAIS Registrations. “It is the responsibility of each FSP to ensure compliance with the examination requirements.”
There are, however, concerns that many individuals have yet to sit the exam. “It is with a degree of concern that the FIA takes note of intermediaries who have so far done little to prepare for and take these exams, despite the fact that the first deadline was the end of 2011,” observed Kotzé. He offered some advice for the thousands who will flood the examination halls over the next few weeks.
Examination advice for late starters
Structured preparation is the only answer for the RE Level 1 and Level 5 exams. The following step-by-step guide should ensure success:
1) Study the regulatory exam preparation guidelines provided by the FSB.
2) Guidelines from page 15 onwards contain all the qualifying criteria from which the exam questions are compiled.
3) Next to each qualifying criterion, there is a reference to the sections in the legislation that are relevant to that specific criterion. Study the text of the legislation.
4) In the exam questions and answers, the text of the legislation often appears as is and it then becomes easy to identify the correct answers.
5) Read through the legislation a few times and note words such as ‘must’ and ‘may’. Focus on time periods in which action must be taken on certain compliance obligations. Learn the definitions of advice, intermediary services, what is not regarded as advice or intermediary services, financial services and financial products.
6) Focus specifically on the following tasks in the qualifying criteria from which the most questions are formulated:
a) Representatives – tasks 1, 2, 3 and 7.
b) Key Individuals – tasks 1, 6, 8, 9, 10, 12 and 13.
7) Use other study material to refresh your memory and for practical examples of regulation.
8) Attend a workshop to round off the preparation.
