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FAIS Regulatory Exams Year-end Statistics Reveal Positive Trends

I came across a presentation on the FSB website which contains information and statistics I have not seen or read anywhere. Some of the dates refer to information as at 17 November last year, so it must be very up to date.

It is merely a PowerPoint presentation without notes, so one needs to be careful about how one interprets it. What are the numbers involved?

• Total number of authorised FSPs in SA: 10 983
   
• Total number of approved Key Individuals: 12 863
   
• Total number of Registered Representatives: 122 546

The majority of KIs and Reps that pass the exam obtain a result between 71 – 80%

The majority of KIs and Reps that fail the exam obtain a result between 51 – 60%

The following observations appear in the presentation:

• There was an increase in the pass rate since roll-out of the exams at an average of over 3% per month for both exams (Rep and KI).
   
• Preparation is critical – a systematic, structured approach is proving to be the most effective.
   
• There was a serious increase in cancellations from small FSPs / individuals since July 2011 and poor registration figures.
   
• Corporates are doing bulk enrolments which will have an impact on availability of seats at examination venues.

Some comments from us on the above:

Cancellations

There is no doubt that a major driver for the increase in the number of cancellations (and postponements) was the announcement that the deadline would be extended by six months.

Whatever motivated candidates to do this, is not important. What is, is that a new commitment has to be made at a later date, and most of the learning done (and production time sacrificed in the process) was in vain.

With big product and broker houses filling up the seats, the possibility of not finding a seat before the deadline increases every day.

Pass Rate

The industry is waiting with bated breath for an announcement on the pass rate. From the figures quoted above, it is evident that simply saying 100 wrote, 50 passed, therefore the pass rate is 50% would be totally inaccurate.

The figures over the last few months would be a far more accurate reflection of the current reality than the method used in the example above. At the outset, the number of people passing was substantially lower than now. We discuss some of the reasons below.

This should be seen as a very positive sign by all those who were scared into paralysis by the prophets of gloom

The substantial improvement in the pass rate from March to November last year can be ascribed to any number of reasons. Our guess would be:

• Better preparation
   
• Familiarity with the format and nature of the REs
   
• Knowing what to expect
   
• Improved study material and aids

In the light of the above, it does appear that waiting has improved your chances of passing. In our view, things will stabilise from here, going forward.

Waiting too long, however, could rob you of the chance of writing, without which, of course, you cannot pass, or continue to practice.

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