ASIC policy on training
The Australian Securities & Investments Commission released its formal Policy Statement on the training of financial product advisers (PS146) on 28 November 2001.
Last updated January 2002.
PS146 replaces Interim Policy Statement 146 (IPS146) of September 1999 and follows on from the ASIC published guidance on the topic which was given in the form of frequently asked questions and answering in support of the then IPS146.
PS146 sets out the minimum training standards for people who provide financial product advice to retail clients.
Compliance is satisfied where an adviser satisfactorily completes training courses which are listed on the ASIC Training Register which are relevant to their professional activities. Alternatively, an experienced adviser (5+ years) can opt to demonstrate their competence through individual assessment by an authorised assessor. Another option is for an organisation to run their own assessed courses or to run a course in partnership with an authorised assessor. The ASIC Training Register contains a list of assessors.
As a general rule, courses taken before 1995 will not count towards compliance, while post-1995 courses will. Pre-1995 training can be included where other continuing requirements have been satisfied.
PS146 sets out some detail on the knowledge and skill expectations for various financial adviser roles and various financial products.
PS146 also provides guidance to providers of training courses and professional and industry organisations about the training standards that ASIC will look for to enable such bodies to get on the ASIC Training Register.
For those familiar with the IPS146, the final form should not present any surprises.
Notwithstanding the two year transitional arrangements which have been legislated in connection with FSR, a large number of advisers will need to comply with PS146 by 30 June 2002. This is consistent with the timing foreshadowed in IPS146.
The 30 June 2002 start date applies to people advising retail clients on securities, interests in managed investments, derivatives entered into or acquired on a financial market, interests in public offer superannuation funds (other than life offer sourced superannuation schemes) and debentures, stocks or bonds issued by government.
People advising on life insurance products and interests in life office sourced superannuation schemes are able to avail themselves of transition to a greater or lesser degree depending on their particular role in the insurance industry. Generally speaking, advisers on life insurance (including brokers and their representatives and life office employees and directors) have to meet the training standards by the later of 30 June 2002 and the time that they or their principal are granted a full financial services licence (AFSL). Insurance agents have more time as they can postpone compliance until the date the agent enters into a new authorising agreement. In addition, qualified licensees and their representatives must comply by the earlier of the time they or their principal applies for a full AFSL and 11 March 2004.
For those advising retail clients on other financial products, compliance need not occur until the end of the two year transition period, being 11 March 2004.
Advisers must not only be sufficiently trained and qualified but licensees are required to implement policies and procedures to ensure continuing training.
As a result of a combination of FSR requirements and ASIC policy, licensees need to consider implementing the following practices before the start date - appointing a training officer, establishing an annual training calendar, record keeping and drafting a compliance statement or protocol. If courses are to be run in house then they have to be accredited by an assessor.
While many licensees will already have programs which largely satisfy the FSR requirements and ASIC, PS146 establishes the benchmarks and sets certain objective standards that all licensees need to comply with.
