ASIC has warned financial services licensees to ensure their recruitment processes detects representatives who have previously worked for a business ASIC has taken action against.

Under ASIC’s Regulatory Guide 104 Licensing: Meeting the general obligations (RG 104) licensees must:

• ensure migrating representatives are competent and adequately trained. It is important that they are effectively screened and their background checked,
• have adequate supervisory arrangements in place to identify and address deficiencies quickly, and
• have adequate financial, technological and human resources to supervise and monitor new representatives, especially in cases of business growth.

The Future of Financial Advice reforms strengthens ASIC’s licensing and banning powers in relation to all licensees by giving ASIC powers to:

• refuse to issue or to cancel/suspend a licence where the licensee is likely to contravene their obligations instead of needing to establish that they will contravene or have contravened their obligations;
• ban individuals from providing financial services if they are likely to contravene a financial services law; and
• ban individuals from providing financial services if they are not of good fame and character or not adequately trained or competent to provide financial service.