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.
Anyone giving financial product advice under an Australian Financial Services Licence must satisfy ASIC’s training standards which are explained in Regulatory Guide 146 Licensing: Training of financial product advisers (RG146).
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)
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 (The exemptions referenced apply to, for example, accountants, but that is being repealed on 1 July 2016).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 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.
3. HOW CAN I BEST COMPLY WITH RG146?
Selecting the right course and compliance solution depends upon a number of factors, including:
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Whether you are providing advice on 'Tier 1' or 'Tier 2' products
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Your role/educational background
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Whether you'll be providing 'personal advice' or 'general advice'.
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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 give us a call and speak to one of our consultant specialising in compliance today.