What does it mean to be RG 146 Compliant?

Topics: Tier 1 RG146 Compliance | Tier 2 RG146 Compliance | RG146 CPD

---

RG146 is ASIC‘s Regulatory Guide 146 for Licensing: Training of financial product advisers.

Once upon a time, RG 146 was the blanket industry standard for training and qualifications. However, following the introduction of new professional standards for financial advisers in 2019, there has been some confusion over the fate of RG 146.

In this article, we aim to clear up some of this confusion and, in the process, showcase just how relevant RG 146 certification continues to be.

Is RG146 still relevant?

Yes, it certainly is. While it has not had a wholesale update since 2012, RG 146 continues to apply to large sections of the financial services sector. What has changed in recent years is that RG 146 is no longer the minimum training standard for people who provide personal advice to retail clients.

Who needs to be RG 146 compliant?

RG 146 compliance applies to people who provide:

• general advice to retail clients
• personal advice on basic banking products, general insurance and/or consumer credit insurance, and
• individuals who provide financial product advice in relation to a time-sharing scheme
• all advice to wholesale clients where licensees voluntarily elect to have advisers undertake RG146.

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 – must be RG146 compliant.

If you provide personal advice on Tier 2 products, you must also be RG146 compliant.

What is the difference between Tier 1 and Tier 2?

There are two groups of requirements that apply to RG 146 compliance:

• A1 – Generic knowledge
• A2 – Specialist knowledge (split into a range of specialist topics)

Depending on the type of product, people may be required to undertake one or both groups of requirements:

Tier 1 products

Tier 1 products are all financial products except those listed under Tier 2.

A person must complete both A1 Generic knowledge and A2 Specialist knowledge about the specific products they provide advice on and the markets in which they operate

Tier 2 products

Tier 2 products are:

• general insurance products except for personal sickness and accident (includes travel insurance)
• consumer credit insurance
• basic deposit products
• non-cash payment products
• FHSA deposit accounts.

A person must complete A2 Specialist knowledge about the specific products they provide advice on and the markets in which they operate. There is no requirement to complete A1 Generic knowledge.

The Tier 1 education level is broadly equivalent to the ‘Diploma’ level under the Australian Qualifications Framework and the Tier 2 education level is broadly equivalent to the ‘Certificate III’ level. ASIC notes that while Tier 2 products carry certain risks, they are relatively straightforward, so do not require the same level of education.

Are there any ongoing RG146 CPD compliance requirements?

Yes, you do need to undertake continuing training to maintain and update the knowledge and skills that are appropriate for your activities. In other words, you are required to complete continuing professional development (CPD) activities each year to maintain your RG146 compliance.

There is no minimum number of hours required for RG 146 CPD, because the learning will vary depending on the person’s activities and level of experience. Instead, licensees should nominate an appropriate number of CPD hours for each individual as part of their training plan.

You only need to have completed A1 Generic knowledge once; you do not need to undertake it again if you elect to study additional specialist knowledge areas (A2).

Do financial advisers have to be RG 146 compliant?

No.

ASIC notes that since 2019, the professional standards reforms that apply to relevant providers (i.e. existing, new or provisional financial advisers) mean that the training standards in RG 146 no longer apply to relevant providers.

RG 146 continues to apply to people who provide:

• general advice,
• personal advice on basic banking products, general insurance and/or consumer credit insurance, and
• individuals who provide financial product advice in relation to a time-sharing scheme.

What other key roles within financial services is RG 146 relevant to?

Customer service officers

Customer service providers or officers do not need to meet the training standards where the only financial product advice they provide is either:

1. derived from a script approved by a person who is RG146 compliant
2. made under the direct supervision of a person who is RG146 compliant.

This is a fine line for licensees. Any deviation from the approved script made by the ‘untrained’ customer service person puts the licensee at risk. The licensee must also have measures in place to ensure the untrained staff do not operate outside the approved advice framework.

Para-planners, trainee advisers

Technically para-planners and trainee advisers do not have to be RG 146 compliant, but certain activities must be reviewed by and/or remain the responsibility of a person who is appropriately trained. This includes collecting information from retail clients about their objectives, financial situation or needs, preparing draft Statements of Advice and assisting in the explanation of financial product advice to retail clients.

Strict and demonstrable compliance measures must be in place to manage what para-planners and trainee advisers say to retail clients and to ensure non-RG146 compliant persons do not provide advice.

Important note: although there is nothing to prevent para-planners and trainee advisers from undertaking RG146 training to meet the compliance requirements of their role, it should be noted that the professional standards reforms apply to “anyone who wants to become a financial adviser”. It may therefore prove more economical for people in these roles to engage in the higher training standards if they intend on becoming a financial adviser in the future.

What other industries might RG 146 compliance be relevant in?

Given how regulated almost all aspects of financial services are, some important position-holders might like to consider attaining it as well – even if it’s just Generic Knowledge:

• Media, advertising and communications roles – many types of disclosure are mandated with prescribed content requirements. Also, several laws prohibit making false and misleading representations in promotional materials
• People and culture – licensees must ensure representatives who provide financial services are adequately trained and competent. Therefore, human resources roles should be knowledgeable about the expertise and skills of their organisation’s representatives from recruitment to ongoing training
• Information and Communications Technology – licensees have general obligations regarding adequate technological resources. As these span operational needs, information security, and record-keeping, IT roles need sufficient understanding of them to consider whether their organisation’s systems enable the business to meet ASIC’s criteria.

Become RG 146 Compliant with Financial Education

In summary, 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 learning for anyone entering the sector or in an ancillary role.

Explore our range RG146 courses today.

---

How Do I Become RG146 Compliant? Check out our practical, back to basics guide to step you through becoming RG146 compliant. Learn more