How Do I Become RG146 Compliant?

Tier 1 RG146 Compliance | Tier 2 RG146 Compliance | RG146 CPD

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So, you’ve decided to get a job in financial services. Congratulations! The financial industry provides fantastic career opportunities across a range of areas, so there is pretty much something for everyone.

When you start to explore the various roles available in financial services, you may see the term ‘RG146 compliance’ in the listed job pre-requisites. Seems straightforward enough, but when you start to look into it, you may find the terminology and requirements confusing, particularly if you’ve never worked in financial services before.

So, here’s our practical, back to basics guide to step you through becoming RG146 compliant.

What is RG146?

It stands for Regulatory Guide 146 – Licensing: training of financial product advisers, which is issued by the Australian Securities and Investments Commission (ASIC), which regulates the provision of financial services in Australia.

Don’t let the term ‘regulatory guide’ confuse you – RG146 sets out the minimum training standards that are needed to work in particular roles in financial services. So, being RG146 compliant essentially means that you have achieved those training standards. In other words, to ‘achieve an RG146 certification’ you must undertake the relevant minimum standard of training for your particular role, and pass the required assessment.

The ‘licensing’ of the title refers to the need for certain businesses to hold an Australian Financial Services (AFS) licence. The AFS licence framework protects consumers from harm by setting minimum standards of operation for businesses that provide financial products and services, including financial advice. Making sure that all the people operating under an AFS licence have the appropriate level of training is one of the licence conditions. So, depending on the business you work for, and the role you perform, your licensee might need you to undertake some form of training to ensure they are compliant with their obligations.

Authorisation is the responsibility of your Australian Financial Services Licensee.

RG 146.30 Licensees are responsible for ensuring that their advisers meet the training standards.

Who does RG 146 compliance apply to?

RG 146 continues to apply for certain groups, namely licensees and advisers who:

• Provide general advice in Securities, Derivatives, Managed Investments, Foreign Exchange, Superannuation or Life Insurance
• Provide general or personal advice to retail clients in General Insurance, Insurance Broking, and/or Deposit Products & Non-Cash Payment Products
• Are already listed on the Financial Advisers Register and wish to study RG146 specialist knowledge as CPD
• Need to complete a relevant short industry course under Responsible Manager Nomination Option 3
• Provide advice to wholesale clients (optional under RG146.35).

RG 146.35 The training standards may also serve as a guide, with appropriate adaptation, for licensees whose representatives provide financial services other than retail financial product advice (e.g. in relation to dealing or wholesale financial product advice).

What RG146 knowledge areas should I gain compliance in?

That depends on

• Your Licensees authorisations
• What financial products you provide advice in
• Your role.

You must be accredited to provide advice in all knowledge areas you intend to advise on. We recommend consulting your licensee if you are unsure or would like to discuss with them your desire to advise on additional knowledge areas.

RG 146.49 Advisers on Tier 1 products are required to have generic knowledge relevant to the products they advise on and the markets in which they operate:
RG 146.50 All advisers are required to have specialist knowledge about the specific products they advise on and the markets in which they operate.

Do I need Tier 1 or Tier 2 RG146?

That depends on

• Your Licensees authorisations
• What financial products you provide advice in
• Your role.

ASIC has divided RG146 products into Tier 1 and Tier 2. Tier 2 products are generally simpler and better understood than Tier 1 products and are therefore subject to lighter training standards. In practical terms, advisers on Tier 1 products are required to have Generic Knowledge plus a specialist knowledge about the specific products they advise on and the markets in which they operate.

This differs from ASIC’s syllabus for Tier 2 products, which covers only specialist knowledge requirements that are relevant to the adviser’s tasks and specific industry and product/s. Note that not all licensed financial products are in the RG 146 framework. For details of what financial products are in scope and whether they are Tier 1 or Tier 2, refer to RG 146.

Remember, licensees still have a general obligation to ensure that their advisers have the necessary skills to be competent to provide advice (s912A(f) of the Corporations Act).

What if I am not an adviser or authorised representative?

An RG146 certification is also a great way to build up your industry knowledge, regardless of whether you plan on providing general advice directly to customers.

We recommend RG146 for:

• Trading/dealing desk heads
• Middle office representatives
• Responsible managers and other oversight roles
• Registered financial advisers who want to increase their range of specialist knowledge
• People working with wholesale clients
• People who want a good grounding in financial services but are unsure of their area of specialisation.

Steps to becoming Tier 1 RG146 Compliant

1. Check with your licensee what specialist area you need to be accredited for
2. You may just want to start with Generic Knowledge
3. Find the right course and simply purchase online. You can add multiple courses to your cart.

You can enrol your team online or contact us for your team training solution.

Do I need to update and maintain my RG146 Compliance?

Absolutely.

RG 146.121 Licensees have an obligation to maintain their competence to provide the financial services authorised under their AFS licence: see s912A(1)(e). They must also ensure that their representatives are adequately trained and competent to provide those financial services: see s912A(1)(f).

As part of meeting these obligations, licensees need to establish policies and procedures on continuing training that will address how they and their advisers will:
(a) maintain knowledge and skills that are appropriate for their activities and responsibilities, and are consistent with the training standards;
(b) update their knowledge and skills, especially in areas where there is continual change (e.g. legislation, regulatory policies and standards, economic and financial developments, new products and new market practices); and
(c) develop new knowledge and skills to assist with their current role or roles contemplated in the near future.

How do I update and maintain my RG146 Compliance?

Our RG146 CPD solution offers financial participants and organisations a complete online solution to satisfy ASIC’s RG146 general advice ongoing education requirements. Our Online learning platform enables you to effectively manage, record and report your CPD obligations.

(RG146.123) Continuing training is essential to ensure advisers maintain their competence. This is particularly so because of rapidly changing markets and regulatory requirements.

Who can I talk to about my RG146 training solution?

Talk with us to develop your team training program to comply with your financial licence obligations.