How to recruit advisers the right way

An application for approval should be made by completing the FCA Long Form A. Certified persons and other staff should complete an internal application if they are applying to be an adviser.

Firms could adopt sections 4 and 5 from the FCA’s Long Form A for this purpose. 

Reference checks 

In order for your firm to carry out its fitness and properness obligations for an SMF role and a certified role, references must be obtained from previous employers going back at least six years.  

When the previous employer is an authorised firm, a regulatory reference must be obtained.

Where the individual has not been working within the financial services industry during the past six years, a reference request should be issued to other relevant parties, ie benefit agencies, school/college/university/accountant or solicitor.  

This is in order to establish the information supplied by the individual is accurate and assess any general issues relating to fitness and propriety and disciplinary matters.

If the candidate has been trading as a sole trader (an unincorporated firm) during the period, there is no requirement to obtain a reference, as that would be asking them to provide a reference for themselves.  

Likewise, if the individual was trading as a sole director in a directly regulated firm and the firm has since closed down, there is little point obtaining a regulatory reference, however, you should establish the reasons for the firm de-authorising and closing down.

In both these instances, you should establish who their accountant and solicitor was during the period in question, and issue a reference request to them.

This differs from a normal regulatory reference and should be tailored accordingly. If you find the individual did not have an accountant or solicitor, I’d suggest you ask the individual to supply you with evidence of the business’s activities, this could be, for example, its compliance records or business bank statements.

When the individual is not a certified person or a senior manager, the regulatory reference is not a requirement, however, obtaining a reference would still be highly recommended. I’d therefore recommend adopting the same reference and time period for all advisers.

Individuals that have attended school, college or university within the past five years should be double-checked, to ensure the information supplied by the individual is correct.

I’d therefore suggest you issue a request to the appropriate educational body, asking for confirmation that the person attended there between the dates supplied on the individual’s application form.

A conviction for a criminal offence does not automatically mean an individual would fail a fit and proper assessment.