The Australian Securities and Investments Commission (ASIC) is cracking down on renegade brokers and financial advisers switching jobs despite dubious employment records.

ASIC has collaborated with Standards Australia and the industry to produce two new handbooks to help employers check the background of prospective employees.

The handbooks - "Employment Screening" and "Reference Checking in the Financial Services Industry" - contain information and guidance on security checking, police records, privacy issues, reference verification and probity checks.

ASIC Executive Director Consumer Protection and International Greg Tanzer told Sunrise Exchange News the handbooks are a response to industry concerns about people who manage to stay in the industry despite a poor compliance record and change jobs without their compliance record counting against them.

Mr Tanzer says the approach is based on industry self-help and there are no plans at the moment to develop a centralised database or black list of non-compliant individuals.

The handbooks contain practical advice for brokers and advisers, such as asking prospective employees to give their consent in writing for information to be sought from former employers, ensuring that details of breaches and compliance history issues are specific and factual, and making offers of employment conditional on satisfactory reference checks.

"It's all about setting reasonable boundaries," he said.

Mr Tanzer says the approach is part of the drive towards professionalism.

"This is consistent with the creation of a truly professional financial services industry."

ASIC Chairman Tony D'Aloisio says brokers' reputations are at stake.

"We have seen that the reputation of any firm can be painstakingly built over a number of years but seriously damaged overnight by an irresponsible adviser.

"As the saying goes, ‘One bad apple can ruin the whole barrel', which is why, together with industry, ASIC is encouraging all employers to share this type of information so that dubious or dishonest conduct does not go undetected and so that we maintain consumer confidence in the financial services industry."

Mr D'Aloisio says the guidelines are fully compliant with privacy legislation.

"We have been careful to design the guide to encourage sharing of information between affected parties consistent, of course, with applicable laws including the National Privacy Principles."