2.7 — Reference checking and information sharing

All AFSL holders should be required, as a condition of their licence, to give effect to reference checking and informationsharing protocols for financial advisers, to the same effect as now provided by the ABA in its ‘Financial Advice — Recruitment and Termination Reference Checking and Information Sharing Protocol’.

Government Response

The Government agrees to mandate the reference checking and informationsharing protocol for financial advisers for all Australian Financial Services Licence (AFSL) holders.

This recommendation will build on the Government’s work to date to remove advisers who have engaged in misconduct from the industry, particularly, through the establishment of the Financial Advisers Register and the reforms to increase the educational, training and ethical standards of financial advisers. Facilitating licensees to undertake reference checks will make it even more difficult for advisers who engage in misconduct to find alternative employment in the industry.