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.

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“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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Comments

Comments

Will this apply to James Shipton et al?

Will ASIC do the same reference checking for its next Chairman!! PMSL

Tell me, will ASIC be doing the same when it comes to their own HR policies?

Appears with Shipton Crennan and co that they have a whole barrow of rotten apples themselves.

Have been saying for a number of years now that ASIC is corrupt.

Sure Adviser references should be checked.
ASIC how about you check your own dodgy employees.
Those that rort expenses.
Those they pay for conflicted research reports.
Those that make completely false Adviser Churn reports.
Those that make completely false SMSF Costs reports.
ASIC has completely lost its mandate to oversee others. The ASIC mother ship is disgustingly rotten all the way through.
But I’m sure these dodgy ASIC employees will have no problem getting a new plush Govt Bureaucracy or Industry Super job regardless of being crocks.
THE HYPOCRISY IS SO BAD

The problem with a licensee based reference system is that vertically integrated licensees can use it as a lever to force their advisers to sell inhouse products. Vertical integration needs to be banned before introducing a reference system like this. Yet another Hayne fail.

The licensee system is not at fault, I actually believe this adds to the compliance focus and implementation of good governance and procedures. Individual licensing can (not does) lead to poorer compliance outcomes.

You are correct though. How did Hayne not determine that vertical integration is not a crime against humanity is beyond me. Probably because the union funds do it.

I agree with you that it can lead to poorer outcomes, but I would argue that this can be avoided by replacing the (in my opinion, deeply flawed, structurally broken and inherently pointless) AFSL system with a robust alternative.

Something like the SDB, with a clear and usable set of rules and requirements. Universal and consistent compliance guidance. Proper standard setting and enquiry lines. Real oversight, with sharp teeth and a big stick.

Then we can stop worrying about all this noise and just get on with it.

We can dream, I suppose.

Yes please!
No exhorbitant AFSL expenses and one clear and usable set of rules and requirements with clear guidance from the Single Disciplinary Body. Simple and easily understood rules will actually allow a more robust compliance system. The more simplified the system is the easier it will be to detect the small minority that are actually doing the wrong thing before it's too late.

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