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Responsibility for planners is mostly outsourced to employers.

It is employers who are responsible for ensuring that their planners are honest, competent and ethical.

The regulator, the Australian Securities and Investments Commission, does not know the name of every planner working in Australia, let alone anything else about them.

It is not only inadequate background checking by some employers that leaves those seeking financial advice exposed.

Some employers may value a prospective employee's ability to sell financial products above other skills.

And the sales culture endemic in much of financial planning means the problems extend beyond just a few rogue traders.

Perhaps employers give glowing references or gloss over an employee's faults as the company is happy to off-load potential liabilities.

Perhaps the employer fears if they give a bad reference the employee may take legal action against it. ANZ, a big employer of planners, in its submission to the latest parliamentary inquiry into financial planning, calls for employers to be given legal protection when providing references for their planners.

"There is an opportunity for legislation to address this issue by creating a framework within which legal protection would be given to good faith disclosures made by licensees [employers] in response to reference checks," ANZ says in its submission.

"This would inhibit financial planners who had engaged in misconduct but had not yet been formally banned from moving from licensee to licensee."

For the past decade the ASIC had been working with employers and industry bodies to limit the ability of bad apples to move between employers.

ASIC has repeatedly warned employers that they need to have "robust recruitment processes" in place, particularly when appointing planners who have worked for a business against which it has taken action.

And recently, ASIC taken some enforcement action on this issue as well.

Despite these efforts, ANZ believes there has "not been any significant improvement in licensees' willingness to provide disclosures about a representative's conduct".

The bank says the information is not provided because of "actual or perceived legal constraints and potential liabilities for so doing".

The public register of advisers, expected to be up and running by March this year, will help. For the first time, there will be a central register of everyone giving advice.

However, the register can only include bans, disqualifications and enforceable undertakings. ASIC can take a very long time to move against bad advisers that it identifies in its surveillance campaigns.

ANZ argues that legal protection for employers' disclosures on employees would help identify planners "who had engaged in misconduct but had not yet been formally banned from moving from licensee to licensee".

Financial planning laws will continue to fall short of protecting the public if bad apple planners can hop so easily between employers.

Policymakers should give serious consideration to extending legal protection to employers on the disclosures they make about their employees.

Legal protection would not mean very much unless reference checking was made compulsory for employers, as ASIC has recommended.