Nearly every day I get asked to explain the qualifications needed to be a financial planner so I thought I’d shed some light on the issue here.
The Australian Securities and Investments Commission’s (ASIC’s) Regulatory Guideline 146 (RG146) sets out the minimum financial educational standards required to be licensed as a financial planner or financial adviser in Australia.
Tier 1 qualifications are needed when giving advice about any of the following financial products:
- Generic knowledge
- Financial planning
- Managed investments
- Insurance – general, life and broking
- Margin lending
In the case of Tier 2 the training is more general and more easily understood by the general public than Tier 1. It also refers to having the knowledge of the environment in which the financial planner operates and to understanding the context in which the advice is given as rather than providing any specialist advice such as:
- General insurance products – excluding products that insure against personal sickness and accident
- Consumer credit insurance
- Basic deposit products
- Non-cash payment products
Now this may also appear to be relatively straightforward however this is where things start to get a little more complicated. You see ASIC requires advisers to have the necessary skills to carry out their role competently which means completing the appropriate courses to attain those skills, whereas employers may not require certain advice to be given therefore the specialist knowledge is not needed.
QRX bank has decided that their financial planners will not be licensed to provide advice on Derivatives. These means the specialist knowledge for Derivatives will not be part of their licensing requirements and also wont be necessary for any applicants applying for their vacancies.
Similarly, if you’ve completed a financial planning course but it did not cover SMSFs and the employer you’re applying to requires their financial planners to have this specialist knowledge in order to be licensed with them and fully compliant, then your application will be rejected.
That’s why sometimes for one employer you may be considered ‘RG146 compliant’ and for another you won’t.
So what should you do?
- Check any courses you’re looking at very carefully so that you completely understand exactly which specialist areas of advice you’ll attain with that course
- Check any job advertisements very carefully so that you understand exactly the areas of specialist knowledge the employer is looking for to consider your application
- Plan to continue studying and upgrading your financial planning qualifications to ensure that you’ve attained all the possible specialist areas of advice that any employer would be looking for
I hope that helps because it would be horrible to pay for a course that doesn’t have all the components that you need for the job you’re applying for.