Developed around the financial services royal commission’s recommendations, the ASIC protocol aims to improve reference checking in the financial advice sector.
Along with the protocol, ASIC has also released guidance documents to assist AFS and credit licensees comply with the new reference checking requirements.
“The ASIC protocol sets out obligations for licensees to undertake a reference check and share information on an individual seeking to be employed or authorised as a financial adviser or mortgage broker,” ASIC said in a statement on Tuesday.
“The reforms will promote better information sharing about the performance history of financial advisers and mortgage brokers — focusing on compliance, conduct and risk management.”
The news comes after the corporate regulator released IDR reporting documents set to be tested in a pilot involving financial firms later this year.
The pilot versions of the dictionary and glossary were developed through two rounds of public consultation and aim to ”align as closely as possible with the reporting approach of the Australian Financial Complaints Authority”.
Key changes made in response to the consultation include to remove free text fields and mandatory reporting of demographic information and to allow flexibility to including multiple products and or services and issues per complaint.
Is there any other industry where the Government tells them what they should do when recruiting? If ASIC was better at their job, we wouldn’t need to do this.
Most licensees are either clueless or just greedy when it comes to adviser vetting. I once joined a non aligned group and at our first gathering told the MD afterwards I thought one of the advisers was dodgy, only to be told no, they were a very successful adviser/accountant and I was just jealous. A year later they were found to have stolen client SMSF money and the licensee was wound up. Very little was disclosed to the group until the bitter end as we all started jumping ship. You can almost always tell who is going to get everyone else into trouble, if you have been around long enough..
So, if the Manager (Executive) of your AFSL is not a licensed person, that is they’re not on the FAR, which is bad enough, they will not be subject to this reference check.
Think about that for just a second.
And of course, they don’t need to sit the exam.
All the comments I have read are very relevant as a licensee I have advisors that have all been checked out and I make advisors sign a contract to stop them moving from licensee to licensee I see it all the time but I don’t want them they try to build up their clients by moving from different licensee all the time
You might want to actually have an understanding of contract law.
“Contracts of employment — they commonly include provisions restraining employees from
carrying on their trade or profession in competition with their employer either while in
employment or after termination of their contract of employment. Courts are reluctant to enforce
such provisions because of the unequal bargaining position of the parties, as the employer is in a
more dominant position.”
The employee always has that to fall back on with similar unfair contract terms.
Well, I’m stuffed.
People, get the chip off your shoulder. reference checking for advisers needed to be better structured for years. Incompetent advisers have been moving from licensee to licensee for years and always stayed one step ahead of the chop. Perhaps that’s a needed skill. ASIC in not trying to ruin all licensed advisers out of business. It’s trying to improve the industry because it failed under self regulation
Not much point doing this when ASIC is hell bent on running all licenced advisers out of business, there will be no one to reference check. But I wish them good luck trying to control the unlicenced advice from wealth coaches and tik tok influencers, or is this above their pay grade?
Tik Tok influencers and wealth coaches are not licensed and therefore ASIC don’t worry about them, it’s what I’m building my future business model on. Basically I can do whatever I want and no one cares.
Actually according to yesterday’s article about MyBudget they were pinned by ASIC for providing “unlicensed advice” and ASIC went as far as working with them to assist their business model.
This is funny
If you are adding any value to a client and you look anything like being successful, without doing anything wrong by your clients, you can be 100% sure ASIC will stop you eventually. ASIC is only interested in feathering the nests of its industry superfund mates and will clearly do everything it can to remove any decent hardworking adviser, despite whatever capacity it is they offer that service and value.
probably the most accurate comment on these pages in years
It is like cops will only keep an eye on licensed drivers and not worry about those who don’t have one. Brilliant, this is genius. Good work ASIC