The Australian Securities and Investments Commission (ASIC) has teamed up with the Financial Planning Association, the National Insurance Brokers Association and other three industry groups in a bid to change the way financial planners are recruited. It’s a novel attempt by the associations and ASIC to stop “bad apples” from entering the industry.  

The move, which comes off the back of two years of bad publicity for the financial planning sector, has prompted the groups to specifically examine the way references are checked when companies are recruiting new planners.

The panel also includes representatives from the Investment and Financial Services Association, the Securities & Derivatives Industry Association and the Australian Compliance Institute.

Greg Tanzer, ASIC’s Executive Director Consumer Protection and International Relations, says “reliable, candid references” play an important role in reducing the number of dishonest advisers. 

“Australian financial services licensees must operate efficiently, honestly and fairly,” he said. “This includes properly checking that any new staff they employ don’t have a history of negligence or dishonesty in providing financial services.”