July  2012/CashAdvance.com.au, Want to be a part of the future of financial advice in Australia? Become a Certified Financial Planner (CFP).

In Australia, financial planning has now become a highly regulated industry especially where it will involve giving of financial advice to the public.

Practitioners who are tasked to offer advice that could have an influence on a client’s decision to purchase a financial product are required by the Australian Securities & Investments Commission (ASIC) to comply with the minimum training requirements and hold an Australian Financial Services License (AFSL) or be authorized as a representative of an AFSL holder (unless covered by an exemption).

There are two main steps involved in order to become a financial planner in Australia. First is meeting the training requirements of Regulation Guideline 146 and second is the selecting of a license holder with whom to be affiliated.

Regulation Guideline 146

The Regulatory Guideline 146 on training of financial product advisers (RG 146), formerly known as policy statement 146 (PS 146), is an Australian financial regulation that requires those who are interested to be giving financial product advice to retail investors to meet both initial and ongoing adequate relevant levels of training standards,  competence, and experience as defined by ASIC. There is no specific qualification in financial planning, but you are required to choose a course that is listed on the ASIC Training Register.

Under RG 146 an adviser can be categorized in one of two ways, namely: a category for those providing Personal financial advice called Tier 1 and the category for those providing General financial advice called Tier 2.

Under Tier 1 RG 146, the minimum requirements can be complied by either choosing to study these individually or in succession as part of the Diploma of Financial Services (Financial Planning). Consequently, most AFS licensees are required to be seeking the Diploma of Financial Services (Financial Planning) as a minimum.

Tier 1 compliance is said to be harder to gain than Tier 2 as it takes into account the individual’s positions, which by their nature are diverse. Tier 1 requires two examinations while Tier 2 requires only one examination.

Licensing

Once your training is successfully completed, you still cannot provide financial planning advice without being licensed by the ASIC. The term ‘licensed’ refers to AFSL holders and representatives or authorized representatives of license holders.

A new entrant to the financial services industry is generally required to meet an experience requirement before obtaining a license. They are required to operate under an existing AFS license holder as either an authorized representative or a representative.