Treat this credential as a classification problem built on a product-knowledge base. Two separable skills matter: naming what kind of communication you are handling — factual product information, general advice, or personal advice that has drifted from a general script — and knowing the features, risks and costs of the general insurance products in scope, with consumer credit insurance studied as its own category. Start each study block by classifying statements rather than re-reading regulations, then move to full call-style scenarios where you must also decide when to stop and refer outside Tier 2.
Why RG 146 still governs general insurance advice after the professional standards reforms
RG 146 sets minimum training standards for AFS licensees and representatives who provide financial product advice to retail clients. Since the professional standards reforms commenced, it no longer covers relevant providers, but it still applies to advice on general insurance.
The 2017 professional standards reforms raised the education, training and ethical standards required of 'relevant providers' — financial advisers giving personal advice on relevant financial products to retail clients. Relevant financial products are defined to exclude basic banking products, general insurance and consumer credit insurance, so advisers working in those areas are not relevant providers. ASIC considers that, in general, Tier 1 products are now the relevant financial products, while Tier 2 products are what remains: basic banking, general insurance, consumer credit insurance and time-sharing schemes.
The practical consequence is a boundary, not a hierarchy. If your role is general insurance advice, RG 146 remains the applicable training standard. If a conversation drifts toward products outside Tier 2 — an investment, a managed fund, anything beyond the listed categories — higher and different requirements attach to that subject matter. Scenario questions can test exactly this: identify which category the product belongs to first, then decide what may legitimately be said about it. Learn the exclusions that define Tier 2, not just the positive list.
General advice versus personal advice versus factual information: the one test that separates them
General advice is advice that is not personal advice: it is given without considering a client's objectives, financial situation or needs. Purely factual product information is neither category, and separating all three outcomes is the core classification skill.
The classification test turns on whether someone's individual circumstances were taken into account. If an adviser asks about a caller's situation and then tailors a recommendation to what was learned, the advice has become personal, whatever the call script labelled it. This is why scenario questions describe conversations rather than job titles: you read what actually happened in the exchange. Ask of every statement, 'what information about this person was used to shape it?' — the answer determines the category.
The practical trap is treating 'I never asked for their details' as proof of general advice. Advice can become personal through what the adviser volunteers about the client's situation, not only through questions asked. Keep the third category live as well: pure product information — factual descriptions of cover, price or features drawn from the product disclosure statement — carries accuracy expectations but is not advice at all, and does not sit under either advice classification.
Scenario 1: when a recommendation drifts into personal advice mid-call
A retail caller asks whether contents insurance is worth having. The adviser answers generally and gives the required general advice warning. The caller then mentions keeping valuable jewellery at home, and the adviser recommends a specific higher sum insured.
The plausible mistake: the opening statement was genuinely general, addressed to a class of clients without reference to any individual. The drift happens when the adviser uses the volunteered detail to say 'you should raise your contents sum insured to $25,000 because of your jewellery'. At that point the recommendation takes the client's situation into account, so it is personal advice delivered without the process personal advice requires. Labelling the call 'general advice' in a script does not fix the classification.
The better decision: keep the recommendation general — 'people who hold valuable items sometimes choose a higher sum insured; check how the product treats specified items' — with the general advice warning accompanying it. Why it matters: the personal advice process, including a needs analysis and the licensee's procedures for it, attaches once advice becomes personal. Mislabelling the exchange leaves the client without that protection and places the licensee's compliance position at risk.
What Tier 2 knowledge standards expect for general insurance products
Tier 2 standards require genuine knowledge of the products you advise on: features, the risks covered and created, costs, and the consumer needs they meet, together with the regulatory context in which they are sold.
For general insurance, that knowledge means understanding what a product covers and excludes, how premiums are structured, what an excess and a sum insured do, how claims proceed, and where common consumer misunderstandings arise. Generic insurance awareness is not the target: contents, motor, home building, travel and consumer credit insurance each carry distinct features and risk points, and the standards apply product by product. Build a separate knowledge block for each product family you will advise on.
Consumer credit insurance deserves its own study block because it is a distinct Tier 2 product category, not a sub-type of general insurance to skim. It attaches to credit contracts and behaves differently from property or motor cover, so its features and consumer concerns should be studied separately rather than assumed. One caution while studying: Australian insurance disclosure rules have been reformed in recent years, so confirm current duty wording with your licensee's guidance instead of relying on older notes or summaries.
Scenario 2: the tier boundary — recognising when to stop and refer
A client with a home and contents policy asks whether they should sell some shares to fund a renovation. Advising on the shares is outside Tier 2 subject matter, because shares are relevant financial products and therefore Tier 1 territory.
The plausible mistake: the adviser, comfortable discussing money in general, answers 'selling the shares makes sense given the capital gains involved'. That is advice about a Tier 1 product from someone whose authority and training sit in Tier 2. The error is assuming competence in one product category extends to whatever the conversation touches. Training standards attach to product categories, so the limits of what you may discuss follow the products covered by your authority, not your general confidence.
The better decision: 'I can help with your insurance questions; for a decision about selling investments you need an adviser who can give personal advice on those products.' Why it matters: the referral preserves the boundary the training framework exists to enforce. Scenarios built this way reward reading the product rather than the adviser's job title — ask which product is actually being advised on, check whether it is a relevant financial product, and only then decide what the adviser may say.
Decision table and a statement drill with a self-check rubric
Use a three-way table — product information, general advice, personal advice — then practise by writing and classifying your own statements. The rubric tells you what correct work looks like before you check any answer key.
Exercise: write six statements about one product — two factual, two general, two personal — then classify each before checking. Expected observations: factual statements contain only details derivable from the product disclosure statement with no recommendation; general statements recommend for a class of people without naming an individual's situation; personal statements explicitly use the client's circumstances in the recommendation. A missed item is more instructive than a correct one, so re-read the statement aloud and ask what circumstance was taken into account.
Rubric for self-marking: score one point per statement classified correctly before consulting notes. Six out of six: move to mixed call scenarios. Four to five: re-run the general-versus-personal test on the missed items and identify the trigger that changed the classification. Three or below: rebuild the three categories from the table before more drills. Reaching six consistently is a study milestone showing the classification test has clicked, not a prediction of exam results.
| Communication type | Defining feature | Individual circumstances used? | Classification signal |
|---|---|---|---|
| Product information | Factual description of cover, price or features drawn from the product disclosure statement | No | No recommendation is made; every detail is verifiable against the product disclosure statement |
| General advice | A recommendation made without considering the person's objectives, financial situation or needs | No | A recommendation exists, but nothing in it reflects the individual client |
| Personal advice | A recommendation shaped by what is known about this client's objectives, financial situation or needs | Yes | The recommendation would differ if the client's circumstances differed |
| Outside Tier 2 subject matter | Advice about a product such as an investment, which is a relevant financial product | Depends on the advice type | Stop and refer; Tier 2 authority does not cover the product at all |
An adaptable preparation sequence and readiness checks
Run four stages: classification drills, product knowledge blocks per family, mixed scenarios with referral decisions, then a combined review scored against your rubric. Finish only when the readiness checks below pass without notes.
Stage one: build the three communication categories and drill statements to six out of six. Stage two: study each product family separately — features, exclusions, excesses, premiums, claims, consumer misunderstandings — including consumer credit insurance as its own block. Stage three: work full call-style scenarios where you classify the communication and decide whether to continue or refer. Stage four: mix all three earlier stages in one review session, re-scoring with the rubric. Adapt the pacing to your own schedule; the order matters more than the timing.
Readiness checks are demonstrations you can perform on paper rather than promises of any result. Each maps back to a stage, so a failed check points to the block that needs another pass instead of a full re-read. Work through them cold, without notes, and treat any hesitation as a signal to revisit the underlying material.
- State the Tier 2 product categories and the exclusions that define them from memory.
- Classify a fresh set of six statements without notes and score six on the rubric.
- Describe the features, risks and costs of each product family you will advise on, with consumer credit insurance treated separately.
- Give, in your own words, the referral line you would use when a conversation moves outside Tier 2 subject matter.
- Explain what makes a statement personal advice even when no questions were asked of the client.
References and further reading
Use these references to explore the concepts and check the latest information from the relevant organizations.