Teach English in Jiuzhoulu Jiedao - Hebi Shi

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I wonder what would be recommended for student's who do very well on their placement exams but do not do well in the level that the exam places them into? I have had students that flounder in advanced classes, after having aced the advance language placement exam. Is it a good idea (especially for the student's confidence level) to change a student to a less advanced class? Is the exam to blame? Perhaps the exams do not reflect the curriculum in an advanced class? These are situations that I have found over and over in language classes. Would be an interesting topic (for me) to discuss with other language teachers. Thanks!