Securities and Investments Compliance

The History of RG146 – PS146 Compliance

Financial planning has not always been regulated in the manner that it is today where Rg 146/Ps146 compliance is necessary for financial planers to give advice as a proper authority holder. Previously the authority to decide who could give advice was made by the license holder. The license holder was also entitled to decide what training was necessary. As the educational requirements were an internal decision made by the license holder the Diploma of Financial Planning became popular to legitimise the educational environment especially as a qualification for new financial planners who previously had been selling insurance. This Diploma was not part of the Australian Training Register but was accepted in the industry.

Frauds and a low quality of service at that time prompted the Australian Security Commission (Now the Australian Securities and Investment Commission) to move towards a stricter regulation of the education in the industry. Policy statement 146 or PS146 became the guideline. Educational providers were required to become Ps146 compliant as financial planners were not allowed to give advice unless they undertook education that was Ps146 compliant.

The Diploma of Financial Planning undertook a PS146 compliance an upgrade and become listed on the PS 146 training register even though the course was still not part of the nationally registered environment. As education was gaining importance in the financial planning area the Diploma of Financial Services (Financial Planning) was developed as part of the Australian framework.

The next step in the progression of educational standards was the upgrade by ASIC of their educational requirements from a policy statement (PS146) to a regulatory guide (RG146). The details did not change in this upgrade. An examination of the details of the PS146 now RG146 educational requirements is quite interesting. They are broken down into various areas which can be undertaken separately which would allow an adviser to give advice in the specific area if coupled with either the educational requirements to give general or personal advice (or both). The various areas include insurance and insurance broking, securities, managed investments, securities and derivatives. Not all educational providers provide all the areas and yet they can give the impression that they do. Insurance broking for instance is an area not covered by many of the providers. It is recommended that you ask specifically about whether your potential educational provider has all elements including insurance broking in their course.

Author: Lenny Hayes

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