Financial advisers must have

Financial advising or planning is an industry that is highly regulated, particularly when it involves giving financial advice to the public. Before any local financial adviser can provide advice that might influence a client’s decision to purchase a financial product, the adviser must meet specific minimum training standards and hold a current Australian Financial Services Licence (AFSL), or be legally authorised as a representative of an AFSL.

Training requirements (RG 146)

In order for an individual to provide financial advice, he or she is required to meet the educational and professional experience requirements in accordance with the Australian Securities and Investments Commission’s (ASIC) Regulatory Guide 146 – Licensing: training of financial product advisers. RG 146 has three major components:

Generic knowledge requirements – being knowledgeable about the environment that a trusted financial planner operates in and understanding the context, which the advice is given.
Specialist knowledge requirements – Specific areas where training may be necessary based on the advice being provided – this could include things like securities, general financial planning, managed investments, superannuation, SMSFs, insurance, and foreign exchange.
Specific skills requirements.

There are many courses listed on the ASIC website that are RG 146 complaint, and a financial adviser is welcome to complete any of them.

Many of the courses listed are an open-entry diploma in financial services or planning and typically involves 4 modules over a specific period of time. Financial advisers also have the option to progress to an Advanced Diploma by completing 4 more modules.

Licence requirements – Australian Financial Services Licence (AFSL)

When following tips to finding a good financial adviser, remember that anyone who provides financial product advice must either hold an Australian Financial Services Licence or be employed by, or an authorised representative of a business that holds an AFSL.

This license authorises holders to:

Provide financial product advice
Deal in financial products
Create a market for a financial product
Operate a registered scheme
Provide traditional trustee company services
Provide a depository or custodial service

AFSL’s are issued by AISC and in order to hold a licence, you must meet certain requirements including:

Three years’ experience and full industry qualifications or
Relevant short industry qualifications, a university degree and three years’ experience or
Five years’ experience and be individually assessed, and
Be able to show that you are financially solvent at all times.

An AFSL can be held either by one person or by a corporation. However, if held by a corporation, a responsible manager has to be appointed, and the manager has to satisfy the educational and experience requirements.

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