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RG146 COMPLIANCE

What Is RG146?

RG146 stands for Regulatory Guide 146. Created by ASIC, it is a financial regulation for anyone providing financial advice. It is documented and explained in ASIC's Regulatory Guide 146 Licensing: Training of financial product advisers .

Regulatory Guide 146 (RG146) was originally known as Policy Statement 146 (PS146), but was renamed by ASIC on 5 July 2007 when ASIC renamed all policy statements as regulatory guides.

PS146 was first introduced in 28 November 2001 under Financial Services Reform Act 2001 (FSR Act).

Fourteen years later, Regulatory Guide 146 has gone through many revisions and updates by ASIC — 22 January 2003, 31 August 2005, 22 November 2007, 20 August 2008 and 7 December 2009. The most recent version was issued in July 2012 (but published in September 2012) in Regulatory Guide 146 Licensing: Training of financial product advisers.


1. What is the purpose of RG146?

The Australian Securities & Investments Commission (ASIC) states in RG146.1 that the purpose of RG146 (and setting/enforcing minimum standards for training of advisers) is to:

(a) protect consumers of financial advice by ensuring that those who provide the advice are competent to do so.

Furthermore, they also state, the secondary purpose is to:

(b) help licensees comply with their legal obligations to ensure that they and their representatives are adequately trained and competent to provide the services covered by their AFS licence. Under the Corporations Act, licensees must adequately train and supervise their representatives, and must themselves be competent;

Source: Australian Securities and Investments Commission (July 2012), Regulatory Guide 146: Licensing: Training of financial product advisers (PDF), Australian Securities and Investments Commission, p. 4, archived from the original (PDF).

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2. Why do I need RG146 training?

ASIC specifies in RG146.4 that "all natural persons who provide financial product advice to retail clients must meet the training standards (unless they fall within certain limited exemptions)." (The exemptions referenced apply to, for example, accountants, but that is being repealed on 1 July 2016).

They also make clear that it is a legal obligation to comply with Regulatory Guide 146 as a whole. Furthermore, ASIC have been demonstrating and flexing their muscle a lot.

In the six months leading up to Decemeber 2014, ASIC took enforcement action against 94 cases of white collar crime, leading to 173 criminial charges. Actual penalties awarded in some cases were as much as six years imprisonment and fines as high as $310,000.

In the the following six months between January 2015 and leading up to June 2015, ASIC took enforcement action against 323 cases of white collar crime which is a 46% increase in enforcement action compared with the six months prior.

In the past, they have successfully awarded both criminal and civil prosecution for individuals giving unlicensed financial advice which is known as unlicensed conduct.

In short, if you're providing anything that is considered financial advice or could be construed as financial advice in the future, it is prudent risk management and self preservation to make sure you are compliant with Regulatory Guide 146 and all Australian Financial Services laws and regulations.

Many of these cases could have been easily prevented with the correct training, correct licensing and by acting in an ethical and responsible manner.

Source(s): [1] Australian Securities and Investments Commission (5 August 2015), REP 444 ASIC enforcement outcomes: January to June 2015 (PDF), Australian Securities and Investments Commission, archived from the original (PDF).

[2] Australian Securities and Investments Commission (30 January 2015), REP 421 ASIC enforcement outcomes: July to December 2014 (PDF), Australian Securities and Investments Commission, archived from the original (PDF).

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3. What constitutes 'financial product advice'?

In Corporations Act 2001 s766B(1), ASIC defines 'financial product advice' as:

A recommendation or a statement of opinion, or a report of either of those things, that:
  • is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
  • could reasonably be regarded as being intended to have such an influence

In other words, the definition is quite broad. If you're in what could be considered a 'grey area' - there's no harm in complying with the regulatory guide and it's a small price to pay relative to the potential legal penalties and risks.

Source: Australian Securities and Investments Commission (July 2012), Regulatory Guide 146: Licensing: Training of financial product advisers (PDF), Australian Securities and Investments Commission, p. 59, archived from the original (PDF).

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4. How can I best comply with RG146?

Selecting the right course and compliance solution depends upon a number of factors, including:

  • Whether you are providing advice on 'Tier 1' or 'Tier 2' products
  • Your role/educational background
  • Whether you'll be providing 'personal advice' or 'general advice'.
  • What types of financial advice you'll be providing (i.e.: will you be discussing Life Insurance exclusively? Will you be advising people on their SMSFs? Both?).

Feel free to browse through our Regulatory Guide 146 compliance course options below:

Short Courses Diploma-Level

... alternatively, give us a call on 1300 306 146 and speak to one of our course advisers specialising in compliance today.

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