Design and Distribution Obligations

DDO requires external distributors of our products to report to us the volume of complaints they have received about our products covered by our TMDs, on a regular basis.

A complaint is an expression of dissatisfaction made to us by an account holder (or someone legitimately representing their interests), related to our products or services where a response or resolution is explicitly or implicitly expected or legally required.

Distributors should refer to ASIC’s guidance on complaints (Regulatory Guide 271) for further information.

Every three months, distributors will need to report to us the number of complaints they received about our products that they distribute, even where this is zero.

These reports need to be received within 10 business days of the end of each reporting period, which end on:

• 31 March
• 30 June
• 30 September and;
• 31 December.

To ensure we continue to meet the highest standards for the products we issue, any complaints about our products should still be raised via our online complaints form as soon as they occur. Complaints reporting under DDO is separate from any other complaints we may receive.

Financial advisers whose clients invest via the Wrap platform are distributors of both Wrap products as well as the underlying investments (e.g. managed investments, insurance and bank accounts) which can be obtained through the Wrap platform.

Each of the products on the Wrap investment menu that are covered by DDO will have their own TMD that is prepared by the relevant product issuers. The reporting requirements for these products can be found in their respective TMDs.

A significant dealing report is intended to capture material or significant distribution of a product outside of its TMD.

Whether or not a dealing is significant will depend on a variety of circumstances, including the scale of distribution outside the target market and the risk of harm to those consumers from such distribution.

Each distributor will need to make an individual assessment in the circumstances of each case to determine when a dealing (or dealings) outside of a TMD is significant and needs to be reporting to us.

A distributor must report any significant dealings to us within 10 business days of them becoming aware of the dealing.

Significant dealings must be reported to us via email to DDO@insigniafinancial.com.au and should 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 (eg, through monitoring, complaints etc); and
• what steps have been or will be taken in relation to the significant dealing.

DDO applies to issuers and distributors of financial products that are sold to retail clients. The term ‘retail client’ is defined in the Corporations Act and can include individuals and small businesses (although for lending products, DDO only applies to retail clients where the loan is for personal or investment purposes – not business purposes).

Our key responsibilities as a product issuer are:

• to create and maintain the TMD for all our products that are covered by DDO
• to take reasonable steps to ensure our products are distributed in line with those TMDs.

The key obligations for product distributors are:

• to ensure there’s a TMD in place for all of the products that they distribute that are covered by DDO
• to understand and follow the distribution conditions and reporting requirements set by the product issuer in the relevant TMD (eg they must keep and report on the information specified in the TMD)
• to take reasonable steps to ensure the product is distributed in line with the TMD
• to keep records of distribution information
• to report information to the issuer as required by the TMD.

Note: In certain circumstances involving Personal Advice, the obligation for financial advisers to take reasonable steps does not apply.

Distribution conditions are conditions or restrictions on the sale of a product, put in place by the issuer, to ensure that the product is sold to customers in line with the TMD. Product distributors will need to adhere to the distribution conditions established in the TMD.

You’re expected to understand the requirements we establish in the TMDs for our products. This means you need to:

• understand the target market defined in a TMD and take reasonable steps to ensure the product is distributed in accordance with the TMD
• understand and adhere to any distribution conditions established in the TMD
• provide information as specified in the TMD, at the required frequency and in the required form
• keep accurate records of the reasonable steps taken and any information provided to us
• report to us where you believe a significant dealing in the product which is inconsistent with the product’s TMD has occurred.

Note: In certain circumstances involving Personal Advice, the obligation for financial advisers to take reasonable steps does not apply.

Distributors of financial products have an obligation to take reasonable steps that are likely to result in distribution of the product being consistent with the TMD for that product.

The obligation for financial advisers to take reasonable steps does not apply to conduct specified to be excluded where personal advice is being provided to the client in relation to the financial product.

Keep in mind, the ‘personal advice exemption’ does not extend to reporting, and distributors who provide personal advice are still required to provide issuers with certain information requested which is stipulated in the products’ TMD, including complaints information.