Regulatory Guide 146 (RG 146) on Training of financial product advisers, formerly known as policy statement 146 (PS 146) is an Australian

financial regulation Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled ...

issued by the

Australian Securities and Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...

(ASIC) related to the minimum training required by individuals selling

financial products Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies ...

. When used in the context of describing an individual it means that such an individual has completed relevant training and passed an exam recognised as meeting RG 146 criteria and is then able to provide advice on financial products to the general public in Australia. All individuals must meet the RG146 requirements before they can sell financial products in Australia to the general public, this includes up-to-date ongoing training through a continuous professional development (CPD) program.

History

Policy Statement 146 (PS146) was introduced under the ''Financial Services Reform Act 2001 (FSR Act)''. It prescribes adequate levels of training, competence, and experience for those seen to be giving financial product advice to retail investors. It was part of ASIC's aim to protect so called 'mum & dad' investors. The designation was changed to RG146 by ASIC on 5 July 2007.

Structure

Under RG146 an adviser can be categorised in one of two ways, providing ''General financial advice'' or providing ''Personal financial advice''. General financial advice is categorised as ''Tier 2'', and Personal financial advice is categorised as ''Tier 1''. If an adviser is considering an investors personal financial position (i.e. he/she is aware of the investors personal financial position, personal financial aims and needs, and is recommending a product) when recommending a financial product, then that is Tier 1 advice. However, if an adviser is simply talking about the benefits of a product without any personal reference to any client (i.e. he/she may be marketing a new financial product through the media, or a presentation to a group of different investors) then this is categorised as Tier 2 advice. Generally (there are some exceptions to this rule) a Tier 2 adviser will be in a position to sell large quantities of a financial product downstream to Tier 1 advisers. The Tier 1 advisers will then on-sell the product in smaller quantities to his/her clients who he/she believes would have the most to gain from this particular product. For this reason investment banks generally concentrate on having a retail sales team for financial products consisting exclusively of Tier 2 advisers. By doing so, they reduce the number of transactions (because each transaction is of greater worth) and sell their product down-stream much faster. Tier 1 compliance is harder to gain than Tier 2 as it takes into account individual's positions (which by their nature are diverse). Tier 1 requires two examinations, Tier 2 requires one examination. Tier 1 advice is divided into a number of categories that focus on a specific segment of the financial market, for example: Managed Investments (see

collective investment scheme An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages inc ...

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

derivatives The derivative of a function is the rate of change of the function's output relative to its input value. Derivative may also refer to: In mathematics and economics * Brzozowski derivative in the theory of formal languages * Formal derivative, an ...

life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...

, and

superannuation A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...

. An adviser can either choose to study these individually or in succession as part of the ''Diploma of Financial Services (Financial Planning)''. Whichever the adviser chooses to do they must ensure that they are RG146 compliant for the knowledge area they specialise in. There are many providers of RG146

compliance training Compliance training refers to the process of educating employees on laws, regulations and company policies that apply to their day-to-day job responsibilities. An organization that engages in compliance training typically hopes to accomplish sever ...

in Australia but these have to be registered with ASIC and meet specific criteria.

References

External links

* https://www.asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-146-licensing-training-of-financial-product-advisers/ * {{DEFAULTSORT:Ps146 Financial regulation Professional certification in finance Regulation in Australia Australian Securities and Investments Commission

History

Structure

See also

References

External links