Forewarned is forearmed!
Financial advisors who have to write the level 1 regulatory examination by 31 December 2011 are well advised to read the preparation guide published by the Financial Services Board carefully to ensure they are thoroughly prepared.
The Financial Services Board (FSB) notes that reckless speculation by some individuals is causing unnecessary concerns regarding the regulatory examination, and that it has received numerous suggestions and complaints about a wide variety of matters pertaining to the examinations.
Uniform standards
The FSB is the custodian of the regulatory examinations. While four examination bodies have been appointed to assist with the development of the regulatory exam questions and the delivery on a national basis, the exams are being developed and delivered under the direction and management of the FSB. As such, any concerns should be addressed to the regulator.
One of the functions performed by the FSB is to ensure that uniform standards apply across the board. One examination body cannot, for example, select a range of easy questions from the databank to ensure a better pass rate. The FSB maintains the whole database of questions, and each examination body “draws” questions electronically in a random manner from this database.
The questions in each and every examination also have to conform to a number of criteria, which are discussed below.
Complexity Level What it measures
Knowledge Test the recall of factual knowledge
Comprehension Test the understanding and interpretation of factual knowledge and
concepts
Application Test the ability to apply factual knowledge to real life situations
Analysis Test the ability to analyse factual knowledge presented in a
situationand decide on the best action to take
There is a fixed formula according to which these complixity levels are applied to the different examinations, as portrayed in the table below.
Complexity Level Key Individual Representative
Knowledge 22 15
Comprehension 32 20
Application 16 10
Analysis 10 5
Key individuals can therefore score 67.5% and representatives 70%, should they get all the knowledge and comprehensionc questions right.
Format of the questions
Modern examination techniques are employed in the formulation of the questions. The following excerpt from the FSB preparation guide explains what to expect in the paper:
Each question has four options, and you must select the correct option. Questions can be posed in the following styles:
• A direct closed ended question: the question must be answered by choosing the correct option.
• An incomplete sentence: the sentence must be completed correctly by choosing the correct option.
• The negative question: the negative option needs to be chosen.
Applicants must be aware that these type of questions will be asked and therefore must read questions carefully.
• The most/best/least format: applicants must choose most applicable option to the question.
• Roman numeral format: A closed ended question where applicants must choose more than one correct option from a list of options.
• Sequencing: the options should be listed in the correct sequence.
Recent changes
Two changes to the original conditions were announced last year. Firstly, the time allowed for completion of these examinations have been extended by thirty minutes each - a key individual now has two and a half hours, and a representative two hours. Secondly, the original pass mark of 70% has been reduced to 65%.
Trial examinations
Trial examinations, whether for level 1 or 2 examinations, are highly recommended to help advisors prepare for the examinations. These trial examinations will provide invaluable exposure simulating the real examination conditions and should not be missed.
