Nobody Puts RG 146 in the Corner

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Topics: RG146 Compliance | Compliance Fundamentals | Responsible Manager Fundamentals

The word on the street is that the RG146 training standard won’t undergo wholesale changes anytime soon. Indications from ASIC are that they will look to revise general advice warning requirements and join calls for general advice to be renamed first.  While ASIC research demonstrates the confusion the term “general advice” causes among consumers, there is little evidence, in fact, of any widespread conduct issues attributable to the training standards in RG146.

Contrary to popular belief, the RG146 qualification is still a compliance requirement for a significant proportion of the financial services industry, as well as being an excellent baseline qualification for anyone entering the sector. Here’s why RG146 should be front and centre of your training program.

What’s in a name?

At the August 2019 ASIC Markets Liaison Group meeting, ASIC Commissioner Cathie Armour mentioned that ASIC was continuing to examine potential for general advice to be retitled, particularly given the increased use of general advice distribution models. Options that have been entertained include product information or general information. Why? Namely in order to maximise consumer understanding and to ensure that consumers are appropriately protected (see ASIC REP 614 Financial advice: Mind the gap and REP 627 Financial advice: What consumers really think).

As far as we can tell, ASIC is likely to await the outcomes of other regulatory tools, such as amending regulatory guidance, exercising product intervention powers, and deploying more robust enforcement approaches before revisiting a dramatic overhaul of RG146 training standards.

Generally speaking

For the general advice world, it is business as usual. RG146 general advice is still a valid and core part of ASIC’s regulatory framework. Anyone who provides general advice in the course of their role – that is, anyone who works for an AFS licensee and provides advice on financial products or services that does not take into account the individual’s situation except for the purposes, say, of generating a quote – must be RG146 compliant.

Similarly, if you provide personal advice in general insurance (Tier 1 or 2) or deposit products and non-cash payment products (Tier 2), RG146 compliance should be your accreditation of choice. To meet training standards at Tier 1 level, industry participants must successfully complete both RG146 Generic Knowledge and study of the specialist knowledge area they intend to provide general advice in.

And for licensees, the responsibility goes beyond simply ensuring staff have completed their Certificate of Attainment. ASIC’s guidance states that licensees must implement policies and procedures to ensure that their staff (and they themselves, if they are natural person licensees) undertake continuing training to maintain and update the knowledge and skills that are appropriate for their activities. Relevant and current CPD activities need to be undertaken to ensure RG146 compliance is maintained.

Building a baseline

Anyone who is new to working in the financial services sector will tell you there’s a LOT of industry-specific knowledge you need to acquire to become truly competent. This valuable knowledge could take months – or years – to acquire ‘on the job’; far better to have a workforce that you can upskill quickly through a well-established training framework. RG146 also provides an ideal baseline for people working in non-advice roles within a financial services business.

We repeatedly hear from clients that while graduates often learn economics, they lack employer-desired levels of knowledge about financial markets and products. This is where RG146 learning can really prove its appropriateness and worth.

Similarly, because of the way RG146 is structured, you can narrow your focus to only those specialist knowledge areas that are pertinent to your role. If you’re a life risk BDM, for example, you may have no need for a detailed understanding of derivatives and managed funds. Far better to invest your time and dollars in building skills that are relevant to your specific niche.

Having the education of your life

Far from being a wallflower, RG146 is still a significant player on the financial services training dance floor. While RG146 categorisations are different to those of its FASEA peer’s, ASIC is no less consistent in its articulation and policing of licensee and adviser competence. Whether you’re looking to meet your ASIC general advice compliance requirements, or want a quality education framework to universally or selectively upskill your employees, Financial Education Professionals’ RG146 program is a versatile and ideal choice.