Know more about RG146 / PS146 in Australia

This information page provides useful definitions relevant in the financial services industry. It will help clarify the terms for industry participants and for those keen to join the industry.

Policy Statement 146 (PS146)

Policy Statement 146 (PS146) was introduced under the Financial Services Reform Act 2001 (FSR Act). PS146 prescribes adequate levels of training, competence, and experience for those seen to be giving financial product advice to retail investors. It is a clear example of how ASIC works to protect so called 'mum & dad' investors.

Under PS146 an adviser can be categorised in one of two ways. Firstly, there is the category of providing General financial advice. Secondly there is the category of providing Personal financial advice. General financial advice is categorised as Tier 2, and Personal financial advice is categorised as Tier 1.

RG146 / PS146 training

If you are planning to work in the Australian Financial Services Industry, you are required to be compliant with the RG146 / PS146 policy from ASIC. This means anyone who provides personal or general advice about financial products to their client's require this training.

RG146 / PS146 courses

ASIC requires participants in the industry to fulfil courses that cover the relevant RG146 / PS146 areas.

ASIC Compliance

The Australian Securities and Investments Commission (ASIC) provided guidance to financial service providers about its compliance response to proposed law reform refinements, and new regulations to the Corporations Act 2001.

The particular proposals and regulations are:

• the Federal Government's Refinements to Financial Services Regulation (FSR) proposals paper, issued on 2 May 2005 (the Refinements paper); and
• the enhanced fee disclosure regulations (the Corporations Amendment Regulations 2005) that were made on 10 March 2005, and which include the fee template requirements.www.asic.gov.au

Who Needs RG146 / PS146 Training?

If you are planning to work in the Australian Financial Services Industry, you'll definitely require to be compliant with the RG146 / PS146 policy from ASIC. This means anyone who provides personal or general advice about financial products to their clients require this training.

Personal advice is when a financial planner has considered the financial situation, needs, and goals of the person in question, or where the provider can be expected to have considered these matters. That doesn't mean that personal advice is just given to one person, however. If you give this kind of advice to a group of people in a similar situation, you're still giving personal advice.

General advice also deals with financial products, but isn't targeted. It can be given to an individual or a group, and may come in the form of a presentation, flier, circular, newsletter, or a number of others. That means that passing out a leaflet with advice about financial products requires you to have RG146/PS146 training.

RG146 / PS146 stands for Policy Statement 146, part of the Financial Services Reform Act of 2001 which is available at ASIC for the general public to read. The first three subsections of the document relate to the training standards for finance professionals in Australia.

Section one lays out the minimum training standards for those who provide advice on financial products to their retail clients. Section two states who the standards apply to, and section three states how to meet those standards. Satisfactorily completing the appropriate training courses is the general way. These courses are listed on the ASIC Training Register that applies to your advisory activities.

You can take these courses through a number of different organizations, which provide a diploma of financial services. This diploma accredits you in the RG146/PS146 standard. Look for a Registered Training Organization, or RTO. To provide limited advice in a single area, it may be possible to simply take a few courses. However, for the majority of people who are operating in the realm of financial services, the full Diploma of Financial Planning is appropriate. Modules for this diploma include Investment, Insurance, Superannuation, Financial Advice and others.

There are a number of different ways to take these courses. You can sign up for traditional face to face teaching, distance learning, and even online courses to receive your RG146 / PS146 training. This makes it easy for anyone to get the appropriate training without making major changes to their schedule or lifestyle. Distance courses can also be a lot less expensive, making it affordable to keep up to date.

If you're part of the Financial Services industry and you don't have the correct training for RG146/PS146, investigate your options. Chances are that you can easily find an RTO to give you the training you need, without a lot of hassle.

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How to Choose a Financial Planner

It is a very hard step to choose a financial planner who can help provide you sound financial advice without just trying to sell you all sort of financial products.

Check their credentials

A financial planner should be compliant with the RG146 / PS146 ASIC regulatory guide. They should at least have a diploma of financial planning and have a speciality in Superannuation, Investments etc. depending on your needs.

Choose a financial planner who belongs to a member of either the FPA or the AFA

The FPA and AFA are the organizational bodies which manages the code of ethics and rules of professional conduct, over and above what is required by law for a financial planner in Australia. Financial planners who belong to these organizations must also undertake continuing professional development.

Refer to the FPA or AFA site to look for a certified financial planner.

This service helps you identify financial planners in your local area.

Ask an associate for a referral

People who have good experiences with a financial planner would not have any issues referring that financial planner on to you.

Talk to a CFP professional

CFP certification is the global symbol of achievement in financial planning. The CFP Mark is awarded to individuals who have gone beyond the competency, ethics and professional practice standards required of other FPA practitioner members. Each year CFP professionals must renew their right to use the Mark.

Look for someone who can manage your confidential information

You would be sharing a lot of confidential information with your financial planner. There is a need to establish a trust relationship.

Once your financial planner listens to what your base requirements and current status in your financial status is, he or she will provide a Statement of Advice which gives you a recommended strategy for achieving your target.

For your first appointment

There's no need for you to go into too much detail for the first meeting you're your financial planner. However, what you want to be prepared for is to provide him or her with all relevant information about your income, debts, what you own, and your future financial expectations. You should also ask questions about the financial planner's qualifications, experience, area of specialisation and what they expect to be able to do for you. Charges are also a key differentiating factor.

There are certain financial products which allow the planner to receive an ongoing commission even after they sell the product to you. Therefore, this has to be made clear upfront.

Read, read and read up!

Search on the internet and understand all perspectives from blogs before committing to a financial planner. Try not to be pushed up against the wall. Some financial planners tell you that you need to act before it's too late! Well, it's never too late so take your time.