Study for this credential by building a product-classification framework first. RG 146 divides advice into Tier 1 and Tier 2 products, and Tier 2 covers basic banking products, general insurance, consumer credit insurance and time-sharing schemes. Once every practice item is labelled by product category and advice type, the underlying knowledge, obligations and scenario answers follow predictably.
The Tier 1 / Tier 2 boundary: the framework that organises everything else
RG 146 refers to 'Tier 1 products' and 'Tier 2 products', and this split determines which training standards and which body of knowledge apply. Build this classification before anything else.
ASIC's Regulatory Guide 146 sets minimum training standards for advisers who provide financial product advice to retail clients, and it explicitly refers to 'Tier 1 products' and 'Tier 2 products'. Following the professional standards reforms that commenced in 2017, ASIC considers in general that Tier 1 products are the relevant financial products defined in the Corporations Act, while Tier 2 products are those that are not relevant financial products. That statutory hook matters, because it gives you a rule rather than a list to memorise.
Practically, the definition of relevant financial products in section 910A of the Corporations Act excludes basic banking products, general insurance and consumer credit insurance, so those three categories sit on the Tier 2 side. RG 146 separately identifies advice on time-sharing schemes as an area to which its training standards continue to apply, and ASIC's general view folds time-sharing schemes into the Tier 2 group alongside the three statutory exclusions. When you study the combined program, attach every topic — ethics, client engagement, compliance — to one side of this line. A superannuation scenario and a transaction account scenario test different regimes, even if the client conversation sounds similar.
- Tier 2 = products that are not relevant financial products: basic banking products, general insurance and consumer credit insurance (excluded by the Corporations Act definition), plus time-sharing schemes (listed by RG 146)
- Tier 1 = relevant financial products under the Corporations Act, in ASIC's general view
- RG 146 continues to apply to general advice, to personal advice on Tier 2 products, and to advice on time-sharing schemes
General advice vs personal advice: why the same product triggers different treatment
General advice is information about a product without considering the client's objectives, situation or needs; personal advice takes those into account. RG 146 covers both, but the obligations and scenario answers differ.
The distinction rests on whether the advice has been constructed taking into account one or more of the client's objectives, financial situation and needs. A branch conversation that explains how a savings account works is general in character; a conversation that starts from 'I have $20,000 and I want it safe until March' and ends with a recommendation is personal. RG 146 applies to advisers providing both general advice and personal advice on Tier 2 products, so this is not a way to escape the standards — it is a way to know which standards and which conduct expectations you are working under.
In the combined program's applied scenarios, train yourself to make the advice-type call explicitly before answering. Ask: has the client given me their situation or objectives? Have I considered them in forming the recommendation? If either answer is yes, treat it as personal advice and reason through the fuller advice process — client engagement, needs analysis, suitability of the product to the stated situation — rather than reciting product features. Making that two-question check automatic is one of the highest-value habits for scenario questions.
- Test 1: Did the client disclose objectives, situation or needs?
- Test 2: Was the advice formed taking those into account?
- Either answer 'yes' points toward personal advice reasoning; both 'no' points toward general advice
The four Tier 2 categories and where their edges sit
Tier 2 is not one lump: basic banking products, general insurance, consumer credit insurance and time-sharing schemes each carry distinct features and distinct knowledge requirements. Learn the edges between them.
Basic banking products cover the everyday deposit and payment side of banking — the transaction, savings and payment accounts a retail client uses. General insurance covers protection against defined contingencies, such as motor or home cover. Consumer credit insurance is the category people most often mislabel: it is insurance tied to a credit contract, covering things like loan repayments if the borrower dies, becomes disabled or loses income. Time-sharing schemes are the fourth category, a different kind of arrangement entirely from the other three.
The reason the edges matter is that a combined accreditation program can present a product that superficially resembles another category. Payment cover sold alongside a car loan is consumer credit insurance even though it is called 'protection', while comprehensive motor cover on the same car is general insurance. In each case, identify the credit link and the trigger event first, then classify. Once classified, you know which product features, disclosure concepts and suitability questions the scenario is really testing — which is why classification should come before feature memorisation in your study order.
- Basic banking: deposit and transaction accounts for retail clients
- General insurance: cover against contingencies such as motor or home damage
- Consumer credit insurance: cover linked to a credit contract's repayments
- Time-sharing schemes: a separate RG 146-listed category from the other three
Worked scenario 1: the 'payment protection' product that fools the label
A product's marketing name does not determine its classification; its legal character does. Misreading a consumer credit insurance product as general insurance changes the entire analysis in a scenario question.
Scenario: a client arranging a $30,000 car loan is offered 'Loan Protection Cover' that pays the repayments if they die, are disabled or lose their job. A common mistake is to see the word 'protection', assume general insurance, and analyse it as motor-style cover — talking about excesses, claim events and policy renewal. That analysis answers the wrong question, because the product is defined by its link to the credit contract and the repayment events it insures, which places it in consumer credit insurance.
The better decision is to classify first: identify the credit link, note the insured events (death, disability, involuntary loss of income affecting repayments), and reason about the product within the consumer credit insurance category — cost relative to the loan, whether the cover matches the client's stated situation, and the fact that this is a Tier 2 product under RG 146. The classification changes which features are relevant, which suitability questions matter, and what a compliant conversation looks like. Practise this by writing the classification in one line before you answer any insurance-flavoured scenario.
- Mistake: classifying by marketing name instead of legal character
- Better: find the credit-contract link, then the insured events, then classify as consumer credit insurance
- Why it matters: the whole feature and suitability analysis follows from the category
Worked scenario 2: the open-ended branch question that drifts into personal advice
An open-ended question like 'what should I do with my money?' can convert an information conversation into personal advice. Scenarios test whether you notice the conversion point and change your process accordingly.
Scenario: a client with $20,000 in a transaction account asks a staff member, 'What should I do with this? I need it for a house deposit next year.' The mistake is to answer with a product recommendation drawn from a general script — naming a particular savings account as the answer. The client has supplied both a goal (house deposit) and a timeframe (next year), and a recommendation formed from that is personal advice in character, even about a basic banking product. RG 146 applies to personal advice on basic banking products, so the Tier 2 label does not simplify the advice process away.
The better decision is to recognise the conversion point and either (a) keep to factual, general information about the features of available account types without a formed recommendation, or (b) engage the full personal advice process: confirm the objective and timeframe, consider the client's situation, and match a product to those stated needs. In scenario answers, state explicitly which path you are taking and why. The lesson generalises: the Tier 2 product category limits the product universe, but the advice type determines the process, and the two must be assessed separately in every question.
- Client gives a goal and timeframe → conversation may have become personal advice
- Choose deliberately: factual general information, or the full advice process
- Say which path you chose and why in the scenario answer
Classification drill: a practice exercise with a self-check rubric
Run a timed drill that forces a two-part label — product category and advice type — on every item. Score yourself against a rubric so the classification reflex becomes observable rather than assumed.
Exercise: write ten product names on cards — for example, a transaction account, comprehensive home insurance, cover sold with a personal loan, a managed investment scheme, a time-sharing arrangement, a savings account, funeral-style general cover, mortgage repayment insurance, a term deposit, and income cover unrelated to any loan. Shuffle them. For each card, within fifteen seconds, write a two-part label: the category (Tier 1, basic banking, general insurance, consumer credit insurance, or time-sharing scheme) and, given a one-sentence client statement you add yourself, whether the conversation is general or personal advice. Repeat the drill on three separate study days.
Self-check rubric: for each item, one mark for the correct product category and one mark for a justified advice-type call. When you mark the drill, write one line explaining each category answer — the statutory or RG 146 reason, not the intuition. Expected observations by the third run: the Tier 1 items (managed investments, non-loan-linked income cover) are classified without hesitation; the consumer credit insurance items are identified by finding the credit link before reading the name; and your advice-type justifications shift from 'it felt personal' to citing the disclosed objectives or needs in the client statement. Any item you cannot justify in one line is a topic to revisit, not a mistake to erase.
- Ten cards, two-part label per card, three runs across different days
- One mark per correct category, one per justified advice-type call
- A missing one-line justification flags the topic for review
A preparation sequence and readiness checks for the combined program
Sequence your preparation in four passes: framework, categories, scenarios, integration. Finish only when you can classify and justify under time pressure, not when reading feels familiar.
Suggested sequence: Pass one (framework) — read RG 146's scope and the Tier 1/Tier 2 split, and rewrite the four Tier 2 categories in your own words with one example each. Pass two (categories) — study basic banking products, general insurance, consumer credit insurance and time-sharing schemes separately, building a one-page feature sheet per category. Pass three (scenarios) — work applied case questions where you must classify first, then reason about client engagement, ethics and compliance within that classification. Pass four (integration) — run the classification drill under time limits mixed with full scenario answers, and revisit any category that still needs intuition rather than a stated rule. Administrative details such as enrolment and scheduling sit with your training provider; ASIC's published guidance is the reference for the regulatory content itself.
Readiness checks before you finish: you can state which advice RG 146 continues to apply to after the professional standards reforms; you can classify a mixed set of ten products with a written justification for each; you can identify the point in a dialogue where general information becomes personal advice; and you can explain why a Tier 2 label does not remove the advice-process obligations for personal advice on basic banking products. Use practice sets and review support such as the free practice materials linked below to test these under question conditions rather than from notes.
- Pass 1: RG 146 scope and the Tier 1/Tier 2 split in your own words
- Pass 2: one-page feature sheet per Tier 2 category
- Pass 3: scenario work that starts with classification
- Pass 4: timed drill plus full scenario answers, reviewing weak categories
| Dimension | Tier 1 (relevant financial products) | Tier 2 (not relevant financial products) |
|---|---|---|
| Product examples | Managed investments, superannuation and other products not excluded by the Corporations Act definition | Basic banking products, general insurance, consumer credit insurance, and time-sharing schemes (an RG 146-listed Tier 2 area) |
| RG 146 application | Professional standards reforms apply to relevant providers giving personal advice on these products; RG 146 training standards no longer apply to them | RG 146 continues to apply — to general advice, and personal advice on these products |
| Typical scenario trap | Treating a Tier 2 product as needing Tier 1-style analysis | Assuming the Tier 2 label removes advice-process obligations for personal advice |
| Classification cue | Not in the s 910A excluded categories and not a time-sharing scheme | Basic banking, general insurance or consumer credit insurance (s 910A exclusions), or a time-sharing scheme (RG 146-listed) |
References and further reading
Use these references to explore the concepts and check the latest information from the relevant organizations.