Thirty-eight per cent of IFA firms do not check the references of new employees, claims a survey by human resources consultancy Peninsula and financial recruitment agency Portfolio Payroll.
Sixty-three per cent say they check references before offering employment and 68 per cent said they have had problems with employees whose references were not checked.
Of those employers who do check references, only 20 per cent consider seeking both verbal and written references, 58 per cent seek only verbal references and 22 per cent seek only written references.
Just 19 per cent believe taking references is of vital importance while 42 per cent say it is fairly important and 39 per cent say it is not very important.
If an interviewee impresses an employer, 62 per cent would not pay attention to a terrible reference and 31 per cent would make further checks. Only 7 per cent would take a negative reference seriously.
Seventy per cent of refererences were described as cautious while the rest were described as useful.
Nearly 350 heads of IFA firms were interviewed between September and October for the survey.
Portfolio Payroll managing director Danny Done says: “IFA bosses who are concerned about making costly hiring mistakes will conduct thorough reference checks. Each interview candidate that enters the premises is a potential employee and you know very little about this person. There is only a single source of information, after all, it is them selling themselves.
“The most effective way to introduce balance and validation in choosing a candidate is to check references.”