ASIC outlines adviser reference checking protocols
“Rolling bad apples” in the financial planning and credit industries will be the subject of new reference checking protocols being proposed by the Australian Securities and Investments Commission (ASIC).
ASIC has issued a consultation paper outlining its approach and seeking submissions from stakeholders by 29 January ahead of having the new regime in place by 1 October, next year.
ASIC is proposing that licensees will be required as a specific obligation under their licence to comply with the new protocol and to check references and share information about individuals.
“Specifically, a licensee must comply with the obligation in relation to: (a) a former, current or prospective representative of a licensee (e.g. a representative of a licensee that is seeking employment with another licensee as a financial adviser or mortgage broker); and (b) a licensee who is an individual (i.e. a current licensee who is seeking to work for another licensee as a financial adviser or mortgage broker representative),” the ASIC proposal says.
It said the ASIC protocol would apply to a prospective representative where there were reasonable grounds to suspect that, if they were successful in obtaining the job they sought, they would provide: (a) personal advice to retail clients about relevant financial products as a representative of an AFS licensee; or (b) credit assistance in relation to credit contracts secured by mortgages over residential property as a mortgage broker representative of a credit licensee.
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