The Financial Adviser Exam Explained: ASIC's Requirement for New Advisers in Australia

Australia's path to becoming a licensed financial adviser has gone through several rounds of reform over the past decade, and the current requirement — commonly referred to simply as "the financial adviser exam" — is administered under ASIC's oversight rather than by the now-disbanded Financial Adviser Standards and Ethics Authority (FASEA) that originally introduced it. Here is how the exam fits into becoming a financial adviser today.

Who has to sit it

Under section 921B of the Corporations Act, "relevant providers" — the formal term for financial advisers giving personal advice to retail clients — and people training to become one must pass the financial adviser exam. For trainee advisers specifically, passing the exam is a required milestone before they can become authorised as a provisional relevant provider and before they begin the third quarter of their mandated professional year.

Exam format

The exam runs for 3.5 hours, including 15 minutes of reading time, and uses selected-response questions rather than long-form written answers. Notably, it is open-book in the sense that candidates are permitted to reference statutory materials during the exam itself, which shifts the emphasis toward being able to correctly apply and locate relevant provisions under exam conditions rather than purely memorising them.

What it actually tests

The exam is built around three broad competency areas: regulatory knowledge, covering Chapter 7 of the Corporations Act, anti-money laundering obligations, privacy law and tax agent regulation; advice construction, covering how to build suitable advice for different types of consumers while accounting for behavioural factors that affect how clients make financial decisions; and ethics and communication, focused specifically on applying the Financial Planners and Advisers Code of Ethics 2019 to realistic scenarios.

How it fits into the wider adviser pathway

The exam itself is only one part of the education and training standards new advisers must meet. It sits alongside a relevant degree or equivalent qualification requirement and the professional year, a structured, supervised training period with an Australian Financial Services (AFS) licensee, during which trainees progress through defined quarters of supervised practice. Passing the exam before the professional year's third quarter is a hard gate — trainees cannot progress in their supervised training without it.

Administration and support

The exam is administered by ACER (the Australian Council for Educational Research), and candidates with exam-specific questions are directed to contact ACER directly. This is a change from the exam's origins under FASEA, which was disbanded in 2022 with its standard-setting functions moved to Treasury and ongoing administration handled through ASIC and ACER.

How this compares internationally

Australia's model — a single standardised competency exam gating entry into a broader supervised professional year — is structurally distinct from the US approach, where the Series 65 licenses investment adviser representatives without an equivalent mandatory supervised professional year, and from the UK's QFA-style qualification model used in Ireland. For finance professionals comparing broader international credentials, ACCA remains a separate, globally portable accounting qualification rather than a financial advice licence.

Preparing for the exam

Because the exam draws on the Corporations Act, the Code of Ethics and applied advice-construction scenarios rather than a narrow syllabus, most candidates prepare using structured courses offered by education providers such as Kaplan Professional, rather than relying purely on statutory materials during the exam itself. Given that the exam is open-book for statutory references, preparation tends to focus heavily on being able to quickly locate and correctly apply the right provision under time pressure, rather than pure memorisation.

The wider professional standards framework

The exam sits within a broader set of professional standards introduced over the past several years covering education, training, ethics and ongoing competence for financial advisers, all ultimately overseen by ASIC following FASEA's disbandment in 2022. New entrants should treat the exam as one gate among several — alongside relevant degree-equivalent study and the supervised professional year — rather than the sole requirement for becoming a licensed adviser.

Licensees also track exam results as part of their own compliance obligations, since employing an unauthorised trainee past the relevant professional year milestone without a pass can create compliance exposure for the licensee itself, not just the individual trainee.

Frequently asked questions

Can experienced advisers skip the exam? Existing advisers who met earlier transitional arrangements had specific historical deadlines to pass the exam; new entrants to the profession must pass it as part of becoming a provisional relevant provider, with no general exemption based on experience alone.

Is the exam open-book? Candidates may reference statutory materials during the exam, though the test still requires strong working knowledge to apply those materials correctly and quickly under time pressure.

What happens if I fail? Candidates can resit the exam, though repeated attempts affect how quickly a trainee can progress through their professional year, since passing is a prerequisite for continuing past its third quarter.

ASIC's own financial adviser exam guidance page, updated periodically as arrangements evolve, is the definitive reference for candidates and their licensees.