The short answer is yes, a criminal record can affect a person’s FAIS fit and proper status. However, it does not automatically mean that the person is permanently excluded from working in the financial services industry.
The Financial Advisory and Intermediary Services Act, commonly known as FAIS, requires Financial Services Providers, key individuals and representatives to meet ongoing fit and proper requirements. These include honesty, integrity and good standing, competence, operational ability and, where applicable, financial soundness.
When a criminal record is identified, the key question is therefore not simply, “Does this person have a record?” The more meaningful question is, “What does the offence tell us about this person’s suitability for the specific responsibilities they will hold?”
Not every offence carries the same risk
The financial services sector is built on trust. Employees and representatives may handle clients’ money, personal information and financial advice. For this reason, offences involving fraud, theft, forgery, corruption, dishonesty, money laundering or a breach of trust are likely to raise serious concerns.
An offence that is directly linked to the duties of the position will generally carry more weight than one with no meaningful connection to the role. For example, a fraud-related conviction may be highly relevant when assessing someone who will advise clients, process financial transactions or access sensitive account information.
Violent offences, serious regulatory breaches or repeated unlawful behaviour may also call a person’s judgement, reliability or good standing into question. Each matter must be considered on its own facts.
A criminal record is not always an automatic disqualification
The Determination of Fit and Proper Requirements requires a proper assessment rather than a tick-box decision. Relevant considerations include the seriousness and circumstances of the conduct, its relevance to the person’s duties, and the time that has passed.
An isolated offence committed many years ago may not carry the same risk as a recent conviction or repeated conduct. Evidence of rehabilitation and responsible conduct may also be relevant. The outcome must be reasonable and supported by the facts.
Employers must also distinguish between a conviction, a pending matter and an untested allegation. A fair assessment should use reliable information and allow the individual to explain before a decision is made.
Non-disclosure may create an additional concern
One of the most important lessons for candidates and employees is that hiding a criminal record can make the position worse. Even where the original offence may not automatically prevent the person from meeting the fit and proper requirements, dishonesty during recruitment, appointment or an ongoing compliance declaration may raise a separate concern about integrity.
Candidates should answer relevant questions truthfully and provide context. Employers should ensure their questions are clear and individuals understand what must be disclosed.
Fit and proper status is an ongoing requirement. Providers should require representatives and key individuals to disclose material changes and review new information promptly and fairly.
The role of criminal record screening
A criminal record check plays an important role in FAIS compliance and risk management, but it is not the entire assessment. It helps verify information and identify potential risks, while the result must still be interpreted against the role and regulatory requirements.
Screening must be lawful and responsible. Informed consent should be obtained, personal information handled securely and results shared only with authorised decision-makers. Employers should confirm the record belongs to the person and allow inaccurate information to be disputed.
In higher-risk roles, criminal checks may form part of wider screening that includes identity, qualifications, employment history, legally permissible credit checks and other role-specific checks.
A balanced approach protects everyone
Fit and proper requirements protect clients, strengthen confidence in the financial services industry, and ensure that the people providing or overseeing financial services are suitable for those responsibilities. It is not meant to impose a blanket lifetime ban on everyone who has made a mistake.
Providers need a documented, consistent process for adverse findings and should involve compliance or legal specialists where facts are complex. Decisions affecting appointment, authorisation or possible debarment must follow the required process and should never rest on a screening result alone.
At iFacts, we believe that effective screening is not about automatically excluding people. It is about verifying facts, understanding risk and enabling employers to make fair, defensible and role-relevant decisions.
A criminal record can affect FAIS fit and proper status, particularly where the conduct relates to dishonesty, financial crime or a breach of trust. But the correct outcome will always depend on the full circumstances, the role’s duties, and a fair assessment of the individual.
