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Monday 24 June 2013

13-149MR ASIC consults on enhancements to training standards

ASIC today released a consultation paper proposing enhancements to the training standards for people who provide financial product advice.

Consultation Paper 212 Licensing: Training of financial product advisers – Updates to RG 146 (CP 212) outlines proposed changes to the training standards that are set out in Regulatory Guide 146 Licensing: Training of financial product advisers (RG 146).

ASIC Deputy Chairman Peter Kell said, ‘Training standards play an important role in ensuring that investors and consumers receive quality advice.

‘ASIC is committed to improving the framework for competency of financial advisers. Accordingly, a review of the training standards is necessary to more accurately reflect the knowledge and skills required for advisers to provide quality financial product advice’, Mr Kell said.

CP 212 proposes to retain the current training standards in RG 146 as ‘base level’ standards, and to introduce two further regimes of training. These are proposed to come into effect in 2015 and 2019.

CP 212 proposes increases in the:

  • generic knowledge requirements

  • specialist knowledge requirements for financial planning, securities and superannuation

  • skill requirements for personal advice, and

  • educational level requirements.

CP 212 is also seeking feedback on the time frame for implementation of the proposed new training standards, and the appropriate training standards for personal sickness and accident insurance and consumer credit insurance.

Submissions to CP 212 close on 30 September 2013.

ASIC Training Register

The ASIC Training Register lists individual assessment services and training courses that meet the training standards in RG 146. These assessment services and training courses are taken to be approved by ASIC in writing.

Australian financial services (AFS) licensees are generally required under their licence conditions to ensure that individuals who provide financial product advice on their behalf have either:

  • completed appropriate training courses that have been approved by ASIC in writing, or

  • been individually assessed as competent by an assessor that has been approved by ASIC in writing - see conditions 7(a) and 7(b) in Pro Forma 209 Australian financial services licence conditions (PF 209).

There are limited exceptions and alternatives to these requirements.

On 24 September 2012, we put the ASIC Training Register under review. The register content is valid up until this date. We will separately release a consultation paper on the future of the ASIC Training Register and a possible mechanism to replace it.

Until we have implemented a mechanism to replace the ASIC Training Register, we will not take any action against an AFS licensee for breach of the licence conditions referred to above, provided that the licensee is satisfied that each individual who provides financial product advice on behalf of the licensee has satisfied one of the following:

  • completed training courses before 25 September 2012, which were listed on the ASIC Training Register, at an appropriate level that are relevant to their functions and tasks

  • been individually assessed as competent before 25 September 2012 by an assessor listed on the ASIC Training Register

  • completed training courses, at an appropriate level that are relevant to their functions and tasks, that an authorised assessor (as defined in RG 146) has approved as meeting the relevant training standards in RG 146, or

  • been individually assessed as competent by an authorised assessor (as defined in RG 146).

This no action position is given in accordance with our policy in Regulatory Guide 108 No action letters (RG 108). That is, it is not a legal opinion; it is an expression of regulatory intent and is specific to the facts and circumstances. For further information, see RG 108 and, in particular, RG 108.33.

Background

RG 146 sets out the minimum training standards for financial advisers. Training standards vary depending on whether the adviser provides general or personal advice and on the complexity of the financial products. RG 146 also provides guidance on how advisers can meet these training standards.

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Last updated: 24/06/2013 12:00