Design & Distribution Obligations

The following information is provided in good faith and is intended as general information only. It does not constitute legal advice and should not be relied on as such. Distributors (including advisers) are responsible for complying with their own obligations under DDO, including determining whether distribution of the product is consistent with the target market determination and relevant law.

Design and Distribution Obligations (DDO) is intended to help consumers obtain appropriate financial products by requiring issuers and advisers to have a consumer-centric approach to designing and distributing products.

From 5 October 2021, issuers and distributors of financial products are required to comply with design and distribution obligations as introduced under the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (DDO Regime).

The purpose of DDO

DDO is intended to help consumers obtain appropriate financial products by requiring issuers and advisers to have a consumer-centric approach to designing and distributing products. Three ways the obligations help consumers:

Product issuers such as Fidante, need to design financial products that are consistent with the likely objectives, financial situation and needs of the customers for whom they are intended;
Product issuers and distributors, need to take ‘reasonable steps’ to ensure the financial products reach customers in the target market; and
Product issuers need to monitor customer outcomes and review their financial products to ensure that customers are receiving financial products that are likely to be consistent with their likely objectives, financial situation, and needs.

To meet these obligations, Product issuers such as Fidante need to make a Target Market Determination (TMD) for all relevant financial products that are covered by DDO.

Summary of your obligations as financial adviser providing personal advice

Obligation	Description
Target market	You must consider the Target Market Determination (TMD) issued by the relevant Product Issuer when giving personal advice to help meet your best interest duty.
Sales outside of target market	You must notify a product issuer of a dealing in a product that is not consistent with the product’s TMD. You are not prevented from recommending the product, if appropriate for your client, even though the client is not in the target market as outlined in the TMD. To help meet these obligations, when investing directly on behalf of an investor, we have added a few questions to each product’s application form. As a financial adviser, under your best interest obligation you may recommend products to clients even if they are outside the target market, however we ask you to let us know if the client is in the TMD or not. Where you are investing in one of our products via a platform, you will need to adhere to that platform’s process.
Significant dealings	What is a significant dealing? A significant dealing is distributing a product outside its target market in circumstances that may result in consumer harm. Whether a dealing is significant depends on factors such as: the number or proportion of customers affected, the nature and extent of actual or potential harm, and the reasons the dealing is inconsistent with the TMD. Significant dealings – how advisers assess and report A ‘significant dealing’ is selling a product that is inconsistent with the TMD and is significant in the circumstances such as the proportion of clients affected, the actual or potential harm, the nature/cause of the inconsistency, and the timing/duration. Significant dealings must be reported to us as soon as possible, but at least within 10 business days of becoming aware of them and contain the following details: the TMD the significant dealing relates to; the date or the date range which the dealing occurred; a description of the dealing; an explanation of why the dealing is considered significant; an explanation of why the dealing is considered to be inconsistent with the TMD; how the dealing was identified (e.g., through monitoring, complaints etc); and what steps have been or will be taken in relation to the significant dealing. Execution‑only channels (similar to direct customers): should ensure Application form gating questions are filled out and are consistent with TMD. Personal advice scenarios: still notify the issuer if you consider the dealing significant, and keep records explaining the best interests basis and why personal advice exemption was relied on. How to identify a significant dealing Distributors are required to assess whether a dealing (or group of dealings) outside of the TMD is “significant.” This assessment must be made based on your own distribution model, product mix and customer base – meaning there is no single prescribed threshold that applies to all distributors. When determining whether a dealing is significant you should consider: Volume – such as a large number of dealings outside the TMD, or a high proportion of total dealings that fall outside the target market eg: repeated early withdrawals from clients in Fixed Term Annuity. Amount – a single dealing may be significant where the variance from target market is large enough. Our TMDs outline what may constitute being a ‘significant dealing’
Complaints	You must provide us with details of any complaints about our products you receive from your clients. You should provide all the content of the complaint, having regard to privacy. We are requesting complaints are reported to us within 10 business days following the end of the calendar quarter. Where you are investing in one of our products via a platform, you will need to adhere to that platform’s process for reporting complaints. Learn more: Resolving complaints
Record keeping	You must maintain records and information relating to your obligations under the regime. You must keep records of this distribution information (e.g. the number of complaints and any other information specified in the Target Market Determination) for up to seven years.

Other responsibilities may apply where you are not providing personal advice.

For more detailed information on the obligations, please read the Regulatory Guide 274 - Product design and distribution obligations.

The Target Market Determinations (TMD)

The TMD is a document issued by product issuers, such as Fidante, for each of our products covered by DDO, which:

describes the class, or type, of customers who the product is likely to be appropriate for;
specifies distribution conditions and restrictions that will help ensure the products are likely to reach customers in the target market;
specifies events or circumstances that will require the product issuer to review the TMD for their products; and
outlines the information that third-party distributors must provide to the product issuer (for products that require a TMD).

We have opted to use the FSC TMD template and have made no material adjustments to this template. The TMD includes all reporting requirements we need to ensure we are meeting our obligations under DDO. Please refer to ‘Reporting Requirements’ below for more information.

Our TMDs will be available via the following channels:

Fidante website
On request via email

Click here for copies of all TMDs for which Fidante is product issuer.

Reporting requirements

Significant dealings: reported to us as soon as possible, but no later than within 10 days of being made aware of the significant dealing.
Complaints data: reported quarterly.
Sales outside of target market – captured in your notifications as part of the application form process (so no additional reporting required from you).

We will communicate with you directly on the sample data fields we would like to see in these reports

Contact details

Please contact the following if you have any questions or would like to discuss any aspect of DDO further.

Fidante Adviser Services

P: 1300 721 637
E: info@fidante.com.au

Recent cases & regulatory actions – key lessons for advisers

Firstmac (2024–2025): Court found a distributor breached ‘reasonable steps’ by cross‑selling a higher‑risk investment to term deposit clients and distributing PDSs before filtering for TMD fit. Learn more: ASIC media release (25-003MR)
Australian Unity Funds Management (2026). Court imposed a $7.125 million penalty for failing to review investor questionnaires and allowing retail clients to invest outside the product’s intended target market. This case demonstrates why proactive reasonable steps processes are essential. If a client falls outside the TMD, it should be escalated and assessed as a potential significant dealing. Learn more: ASIC media release (26-011MR)
American Express (2024): Court imposed an $8m penalty for failing to review TMDs when high cancellation rates reasonably suggested the TMDs were no longer appropriate. Reinforces the need to monitor outcome signals and act quickly on review triggers, significant dealings and complaints. Learn more: ASIC media release (24-158MR)
Mitrade stop order (2023): ASIC issued its first DDO stop order after finding Mitrade’s client questionnaires were ineffective—using leading questions, coaching prompts and unlimited retries—failing to properly screen out consumers outside the target market. This case highlights poor practices in questionnaire design and what should be avoided for effective distribution controls. Learn More: ASIC Press Release (23-141MR)