Design & Distribution Obligations (DDO) – Important Information
To view a Target Market Determination (TMD) for a relevant fund please go to that fund’s information page on this website.
If you are a fund distributor and would like to report:
- dealing outside the target market
- significant dealing outside the target market
- complaints relating to the product design, product availability and distribution, or
- have a question regarding Fundhost’s approach to DDO
Please email your reports or queries to ddoreporting@fundhost.com.au
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Important information for advisors
Dealing outside of TMD reports should be rare. When assessing if a dealing is outside of a TMD, please assess the attributes of the product against the portion of the investors portfolio being invested only, rather than against the overall requirements of the investor.
A consumer may seek to construct a conservative portfolio with a satellite/small allocation to growth assets. In this case, it may be likely that a product with a High or Very High risk/return profile is consistent with the consumer’s objectives for that allocation (ie 10% of portfolio), notwithstanding that the risk/return profile of the consumer as a whole is Low or Medium. In making this assessment, distributors should consider all features of a product (including its key attributes).
Example: Advisor A has a client Mrs J with $1m who seeks medium risk balanced portfolio with regular income.
The advisor may decide that 10% or $100k of the investable funds can be put into high risk and return investments, without any requirement for regular quarterly income returns from high income generating assets. If the advisor then places that $100k into a high risk low income Fund, then that $100k is within the Target Market Determination for that $100k portion of the clients funds. As such the advisor has no obligation to report the dealing as outside the TMD, as it isn’t when looking at that intended risk/income profile for that portion of the client’s funds, separate from the aggregate position.
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If you would like to use the FSC standard template to report:
- complaints relating to the product design, product availability and distribution, you may download it here.
- dealing outside the target market (including significant dealing), you may download the template here.
Examples of completed FSC reports are provided here for guidance:
- Example completed FSC complaints report found here.
- Example completed FSC dealing report found here.
Fundhost TMD’s use the standard FSC definitions. For your convenience you can find these at the link below: