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Fit & Proper Requirements

Fit & Proper is the framework that determines whether a person is suitable to provide financial services. In plain terms: being “good at sales” is not the same as being compliant. This page explains the key pillars, the evidence typically required, and how it connects to RE5, Class of Business, and CPD.

What does “Fit & Proper” mean?

Fit & Proper is a set of requirements that helps ensure representatives (and key individuals) are competent, honest, and able to operate responsibly within the FAIS environment. It is not a single item. It is a combination of competence, conduct, and ongoing compliance.

It is ongoing
Fit & Proper is not “once-off”. You must maintain it through records, behaviour, and ongoing learning.
It is evidence-based
What matters is what you can prove: qualifications, exam results, training, CPD records, and compliant conduct.
It affects what you may do
Your role, product categories, COB and competence determine your scope of work under an FSP.

The core Fit & Proper pillars

Different roles can have different details, but Fit & Proper generally focuses on the same core areas.

1) Honesty & Integrity
You must be a fit person to operate in financial services. Past conduct and current behaviour matter.
  • Disclosure of relevant issues where applicable (e.g., disciplinary findings, certain adverse events).
  • Ethical conduct, fair treatment of clients, and truthful representation.
  • Avoiding conflicts of interest and improper inducements.
2) Competence
Competence is demonstrated through knowledge, qualifications/training, and relevant regulatory exams where required.
  • Passing the relevant regulatory exam(s), such as RE5 for many representatives.
  • Meeting role-based competence expectations under the FSP’s controls.
  • Understanding advice process, disclosures, record-keeping and client outcomes.
3) Operational Ability
You must be able to perform your duties properly within the FSP’s systems, controls and compliance processes.
  • Following the FSP’s advice, sales and servicing processes consistently.
  • Keeping complete records and evidence of client interactions and disclosures.
  • Knowing your scope and when to refer or escalate.
4) Ongoing Requirements
Fit & Proper must be maintained through ongoing learning, compliance, and role-appropriate conduct.
  • Maintaining CPD and keeping CPD records up to date.
  • Maintaining the correct Class of Business (COB) training where applicable.
  • Ongoing adherence to disclosure and fair client treatment standards.

How Fit & Proper connects to RE5, COB and CPD

People often treat these as separate checkboxes. They are not. They are connected:

RE5
Demonstrates regulatory knowledge and application for many representative roles.
Go to RE5 Exam →
Class of Business (COB)
Defines the product/business areas you may operate in and the training you must have.
Go to COB →
CPD
Keeps competence current and provides evidence that learning is maintained.
Go to CPD →

Fit & Proper evidence checklist (practical)

What your FSP needs may differ, but this checklist reflects the kind of evidence commonly required and audited. Keep it organised. “I had it somewhere” is not a compliance strategy.

Competence evidence
  • Regulatory exam proof (e.g., RE5 pass confirmation where applicable).
  • Role-relevant training records (including onboarding and product training).
  • COB training completion evidence where required.
  • CPD certificates and CPD log (with dates and hours/points recorded).
Conduct and operational evidence
  • Signed policies and declarations (conflict of interest, code of conduct, etc.).
  • Advice records: needs analysis, disclosures, suitability notes, client communications.
  • Evidence of supervision/support if applicable (especially during onboarding periods).
  • Complaint handling awareness and escalation processes.

Common Fit & Proper mistakes

Thinking RE5 is “optional”
If your role requires it, it is not optional. Confirm scope and requirements early and plan properly.
No CPD record-keeping
Doing CPD and proving CPD are not the same thing. Keep a neat log and certificates.
Operating outside COB or authority
Your permission to operate is tied to product scope and competence. Do not “wing it”.
Weak advice records
If it is not recorded, it effectively did not happen. Keep clear client files and evidence of disclosures.

Quick FAQs

Is Fit & Proper just a compliance form?
No. Forms help, but Fit & Proper is about whether you meet and maintain the requirements in practice, supported by evidence.
Does Fit & Proper apply if I am “sales only”?
It can, depending on whether your role involves financial services activities in a regulated product environment. Confirm scope with the FSP and compliance.
What is the safest next step if I am unsure?
Start with the RE5 guide and confirm your required product scope (COB) and CPD expectations under your FSP.

Next steps

If you need a structured path, start with the exam overview and then choose the most suitable prep route.

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