Financial advisers working for banks will have up to five years of their work history made available to other banks under a new protocol released by the Australian Bankers’ Association (ABA).
Designed to stamp out unethical behaviour, the protocol will cover reference checking and information sharing regarding a financial adviser’s compliance, risk management and advice quality on Tier 1 financial products and will relate to activities five years prior to any request for information about an adviser.
It will not cover experience, qualifications, competency, and other background checks, such as police checks, qualification checks with the Protocol stating it was “…intended to sit alongside Subscribing Licensees existing processes for reference checking and information sharing in relation to obtaining other information regarding a Financial Adviser”.
“This is an important step by the banking industry to improve the quality of advice…and build trust and confidence in banks”
The ABA stated the Protocol was “…a new, improved way of hiring financial advisers” and was designed to avoid advisers moving between licensees after being dismissed for poor conduct.
“This will better identify financial advisers who have not met the industry’s minimum legal and ethical standards, and help employers make more informed recruitment decisions,” Australian Bankers’ Association Executive Director – Retail Policy Diane Tate said.
“This is an important step by the banking industry to improve the quality of advice, support the professionalisation of the financial advice industry and build trust and confidence in banks,” Tate said.
The protocol will use a series of standardised questions and record keeping practices to check references and share information and will require subscribing licensees to change recruitment practices to comply with the protocol by 1 March 2017.
The ABA stated the list of subscribing licensees included AMP, ANZ Banking Group, Bendigo and Adelaide Bank, Commonwealth Bank, Macquarie Group, National Australia Bank, Suncorp Group, and Westpac and the 30 financial advice groups operating under their control.
“The subscribing licensees to the protocol represent 38% of the entire financial advice market. The more widespread this is, the more effective it will be in making sure individuals with poor conduct records don’t move around the industry,” she said.
