ASIC reaffirms interest in reference check protocols

The corporate regulator has maintained its belief that an industry-wide protocol for reference checking should be introduced to the financial services sector to weed out “bad apples”.

Speaking before the parliamentary joint committee on corporations and financial services on Friday, ASIC deputy chair Peter Kell said poor reference checking on the part of licensees was allowing dodgy advisers to circulate through the industry, causing headaches for the regulator.

“To be blunt, it's been a source of very considerable frustration for ASIC for some time,” he said.

These comments follow similar remarks made by the regulator in March 2017, when ASIC warned it would take action against financial institutions if they failed to provide or obtain “meaningful references” before making new hires.


Mr Kell noted that the Australian Bankers’ Association is presently looking to develop protocols for reference checking, but added that these protocols should be applied to all involved in the delivery of financial services.

“Our view is that that, frankly, should extend across the entire industry,” he said.

partner features

“We've had that discussion with the ABA it shouldn't be some exclusive ABA thing, because that would only get you part of the way there – so that that sort of thing doesn't happen.”

Lee-Martin Seymour, chief executive of reference checking technology firm XREF, told ifa that such protocols should look overseas for inspiration.

“This is actually being discussed in the UK right now, and it’s no different over there,” he said.

Mr Seymour said the UK mandates a time-based approach to referencing, requiring candidates to provide references for their employment over the previous three years.

“There’s no point giving a reference that was worth one year between 2014 and 2015, it’s just not up-to-date and not relevant, so you’ve got to take a sample of history for that candidate, and the best way to do that is to say we need to cover three years of referencing,” he said.

“That might be nine references, it might be two, but you need to qualify your last three years of your professional existence.”


ASIC reaffirms interest in reference check protocols
XREF, ASIC, Peter Kell, reference checking, reference checking protocols, ABA, Australian Bankers' Association, Lee-Martin Seymour,
ifa logo

Subscribe to the ifa bulletin

Receive daily online news,analysis, reports and business strategies
By signing up you agree to our Terms of Use and Privacy Policy

Website Notifications

Get notifications in real time and stay up to date with content that matters to you.