Study this credential as an applied classification exam. Before product content, learn to decide for any fact pattern: which tier the product belongs to, whether the advice is general or personal, and which knowledge areas and conduct obligations that combination triggers.
Why RG 146 still has a live role after the professional standards reforms
Since 1 January 2019, professional standards reforms have applied to advisers giving personal advice on relevant financial products, but RG 146 training standards continue to apply to the other advice contexts ASIC's guide lists.
ASIC's RG 146, issued in July 2012, sets minimum training standards for advisers and the licensees who authorise them. Following the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017, ASIC considers that RG 146 no longer applies to 'relevant providers' — those giving personal advice on relevant financial products to retail clients. The ongoing scope is therefore narrower than the guide's full original coverage, and knowing exactly which contexts remain is examinable knowledge in itself.
Per the guide, RG 146 continues to apply to people who provide general advice, personal advice on basic banking products, general insurance and/or consumer credit insurance, and individuals giving advice on time-sharing schemes. When you read a case study, make your first question: is this fact pattern inside or outside RG 146's ongoing scope? That habit turns scope from background trivia into a decision skill you apply on every question.
Tier 1 versus Tier 2: the classification that drives every other question
Tier 1 products are, in ASIC's general view, relevant financial products; Tier 2 products are basic banking products, general insurance, consumer credit insurance and time-sharing schemes. Classify before you analyse anything else.
The two tiers carry different training expectations, so a misclassification at the start of a scenario contaminates every later judgement. Note the wording carefully: ASIC states that 'in general' Tier 1 products are relevant financial products. Listed securities, managed investments, derivatives and foreign exchange sit on the Tier 1 side within this program's scope, while the Tier 2 list in the guide is short and closed.
Use that closed Tier 2 list as your shortcut: if a product is not basic banking, general insurance, consumer credit insurance or a time-sharing scheme, treat it as Tier 1 unless evidence in the question says otherwise. Memorising four Tier 2 categories is faster and more reliable than memorising the open-ended Tier 1 universe. The table below turns this into a working reference for scenario work.
| Product or service | Tier | Notes for scenario work |
|---|---|---|
| Listed securities | Tier 1 | Distinct knowledge area; check whether the advice given is general or personal |
| Managed investments | Tier 1 | Knowledge area paired with securities in Tier 1 standards |
| Derivatives and foreign exchange | Tier 1 | Separate knowledge area with its own product mechanics and risk profile |
| Basic banking products | Tier 2 | Personal advice here remains within RG 146's ongoing scope |
| General insurance | Tier 2 | Personal advice here remains within RG 146's ongoing scope |
| Consumer credit insurance | Tier 2 | Personal advice here remains within RG 146's ongoing scope |
| Time-sharing schemes | Tier 2 | Advice on these stays within RG 146's ongoing scope |
General versus personal advice: the trigger that changes your obligations
Advice becomes personal when it considers one client's objectives, financial situation or needs. That classification, not the presence or absence of paperwork, decides which conduct duties and competence requirements apply.
Worked scenario: a client tells an adviser, 'I'm 55 and want to retire at 65 — is the Meridian Balanced Fund right for me?' The adviser replies, 'Yes, that timeframe suits that fund,' without a fact find or statement of advice. The plausible mistake is treating the reply as general advice because no formal document was produced. The better reading is that the statement considered the client's stated objectives and situation, so it is personal advice on a managed investment.
This matters because classification changes the obligations attached to the interaction, independent of how casual it was. Practise by reading short transcripts and marking the exact sentence where the client's circumstances enter the advice. If the recommendation is conditioned on those circumstances, you are in personal advice territory, and the applied-compliance toolkit — suitability reasoning, conflict management, and record-keeping expectations — must be brought to bear on your answer.
Securities and managed investments: applying product knowledge, not reciting it
Tier 1 knowledge for securities and managed investments is examined through application: matching product features, risks and costs to a client scenario and identifying what obligations the resulting advice creates.
Build a product-feature map rather than a definition list. For managed investments, note the trust structure, how units are issued and redeemed, the fee types investors can incur, and which underlying asset classes drive risk. For listed securities, connect dividend rights, liquidity and price risk to client objectives. Much of the finance is familiar from the CFA curriculum; your gap work is mapping each feature onto the Australian disclosure and advice context that case questions use.
Then drill with paired cases. Give one client a capital-stability objective and another a growth objective with a long horizon. For each, name the product features that make a given managed fund appropriate or inappropriate, and the features that would trigger further enquiry before recommending. If you can only state definitions, you have learned the subject but not yet the task the case questions actually set.
Derivatives and foreign exchange: extending advice into higher-risk products
Derivatives and FX form their own Tier 1 knowledge area. Scenario work should connect contract mechanics — options, forwards, swaps — to suitability reasoning and authorised scope for retail clients.
Worked scenario: a retail client holding shares asks for a specific recommendation to protect the position against a market fall, and the adviser suggests buying protective put options. The plausible mistake is assuming securities knowledge covers the answer because the underlying asset is a share. The better reading: the recommendation involves a derivative, a distinct knowledge area with its own mechanics and risk profile, so the adviser should confirm the advice sits within their competence and authorised product scope before proceeding — or refer the client onward.
Study each instrument at decision level: what a put obligates the buyer to pay and what it secures, what a forward fixes and what it forecloses, how leverage in FX contracts magnifies both gains and losses. Then attach a suitability test to each: which client objective would justify the position, and which downside must be explained before proceeding. Keep every example on paper — the exam assesses your reasoning, not live trading.
Ethics and compliance case analysis: from issue-spotting to a defensible conclusion
Applied compliance questions reward a repeatable structure: identify the issue, state the governing requirement, apply it to the facts, and conclude with the action a compliant adviser would take.
Worked scenario: an adviser recommends an in-house managed fund that generates additional remuneration for the licensee, although a comparable external fund charges lower fees. The plausible mistake is concluding the recommendation is acceptable because performance is similar. The better analysis names the conflict of interest, connects it to the expectations around acting in the client's interests and managing conflicts under the licensee's arrangements, and concludes with disclosure or a better-justified recommendation.
Practise writing this as a four-to-six sentence structure: issue, rule, application, conclusion. Self-check by asking whether a reader could reconstruct your reasoning from your answer alone. Vague phrases such as 'the adviser should be careful' carry little weight; a named issue, a traced requirement, and a concrete next step are what the structure demands and what you should be able to produce under time pressure.
A classification drill and an adaptable four-week preparation sequence
Run a daily eight-card drill classifying product tier, advice type and triggered obligations, then follow a sequence that moves from scope mapping to timed written case analysis.
Exercise: write eight short client situations on cards, mixing products from both tiers and both advice types. For each card record three decisions — Tier 1 or Tier 2; general or personal advice; which knowledge area and obligations the combination triggers. Expected observations: Tier 2 cards should be near-instant because the list is closed, and hesitation usually signals you are reasoning from product type instead of the classification test. Re-read any card aloud where your three answers do not cohere with each other.
Self-check rubric — learning milestones, not pass predictions: 8/8 correct with written reasons means move to timed case write-ups; 6-7 means rebuild the tier table and retest; 5 or fewer means spend two days on scope and classification only. A four-week sequence you can adapt: week 1, map RG 146's scope and tiers from the guide itself; week 2, inventory your product knowledge per Tier 1 area and mark Australian-context gaps; week 3, daily card drills plus one written case analysis per day; week 4, timed cases and a full drill retest.
- Readiness check 1: you can classify any supplied product as Tier 1 or Tier 2 without hesitation.
- Readiness check 2: you can mark the exact sentence where general advice becomes personal advice in a transcript.
- Readiness check 3: you can name the knowledge area a given recommendation requires before analysing its merits.
- Readiness check 4: you can write a four-sentence, issue-rule-application-conclusion case answer inside a timed session.
References and further reading
Use these references to explore the concepts and check the latest information from the relevant organizations.