ASIC warning to licensees: Be wary of dodgy recruits

by AB07 May 2013
“If you are hiring somebody, you generally need to make sure that they’ve had two years’ trouble-free experience,” he says. “That’s one of the problems that arises when brokers want to swap aggregators, because sometimes the aggregator doesn’t want to give you a letter saying that you’re a good boy.”

This isn’t necessarily because aggregators are trying to make it difficult for brokers to switch, but because they can be held legally liable if the broker is found to have engaged in inappropriate behaviour during their time spent with the previous employer.

“If you write that they’re a good boy and they didn’t turn out to be, somebody might sue you…It’s a bit of a problem in the mortgage industry, because particularly if you're appointing someone as a credit representative, you want to make sure that they’re not going to damage your licence via their conduct.”

Often, the best way to navigate this road block is to all you could do is to, as an employer, ring someone up at the broker’s previous aggregator and ask for an off-the-record, no-liability statement.

And it’s crucial that aggregators do check, says Kell, because in many cases representatives of licensees which have come under ASIC fire will be adequately trained, competent and comply with the financial services law.

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  • by SIDBROKER 7/05/2013 2:04:17 PM

    Why would any broker risk new comers when they are responsible and potentially liable for them.