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Product design & distribution obligations

From 5 October 2021, Netwealth must comply with the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019. This legislation requires product issuers and distributors such as Netwealth to adhere to a new set of obligations when engaging in distribution of retail products.

What is Product design & distribution obligations (DDO)?

The product design and distribution obligations are rules intended to help you obtain appropriate financial products by requiring product issuers and distributors to have a consumer-centric approach to both product design and distribution practices.  It has been designed to reduce the reliance on consumer disclosure and move a larger portion of the burden of appropriate product distribution to the product issuer and any associated distributors.

What are the legislative and regulatory instruments supporting the DDO regime?

  • Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019, and
  • Regulatory Guide 274 – Product Design and Distribution Obligations

What is a Target Market Determination (TMD)?

A Target Market Determination (TMD) is a new document prepared by the product issuer (i.e. Netwealth, underlying fund managers, insurers, term deposit providers etc.) which (amongst other things) describes the class of consumers that comprises the target market for the product. It also contains other important matters relevant to the product’s distribution and review.

Is the target market a rule surrounding who can invest in the product?

No. The target market described in the TMD is not a set of rules that dictates who can invest in the product. It is there to provide guidance to distributors to help identify the types of consumers for whom the product is most likely to be appropriate.

Who’s the target audience of a TMD?

TMDs are designed to assist distributors (financial advisers, AFS Licensees, and Netwealth to the extent we distribute our products direct).  Although TMDs are publicly available to anyone who wish to review them, they have not been designed with clients in mind.

Is a TMD a disclosure document like a PDS?

No. A TMD is not a disclosure document. Anyone wishing to understand the key feature of a product should refer to the relevant PDS/IDPS Guide and any additional documents incorporated by reference.

What information is included in a TMD?

Information in a TMD is mandated by legislation and regulation. Key elements of a TMD include:

  • A description of the target market for which the product has been designed.
  • A list of distribution conditions the product issuer imposes on anyone distributing the product.
  • A list of reporting requirements the product issuer imposes on anyone distributing the product.

How are clients impacted by DDO?

Most of the DDO legislation and regulation impacts product issuers and distributors rather than consumers but you may see some minor changes:

  • Distributors (such as advisers and some investment applications) may ask additional questions of you to help determine if you are in the target market. Note: At this stage Netwealth as a platform provider will not be asking any additional questions.
  • Distribution conditions contained within a TMD may impact who the product can be distributed to.

Distribution condition: Advised clients only

Most managed funds available through the Netwealth investment menu will not have any distribution conditions likely to impact you. Approximately 115 however do have a distribution condition that restricts distribution to “advised clients only”

How will Netwealth know if a client is advised?

Netwealth is assuming that accounts with an associated financial adviser are being operated under personal financial advice.

How will this impact me?

From 5th October 2021, clients without an adviser associated with their account will not be able to purchase additional units in any asset where the product issuer has restricted distribution to advised clients only.

What happens if these assets are in my reinvestment or DCA profiles?

We will be communicating with clients and letting them know that we will be removing these assets from their DCA and reinvestment profiles.

What happens to existing holding in these assets?

This change will not impact existing holding. The restriction only applies to additional purchases from 5th October 2021.


Which Netwealth products are covered by DDO?

The following Netwealth issued products are covered by DDO:

Product category

A TMD has been created for







Super Accelerator Core

Super Accelerator Plus

Wealth Accelerator Core

Wealth Accelerator Plus

Russell Investment Super Series

Russell Investment Wealth Series

Managed Accounts

Netwealth Managed Accounts

Managed Funds


















Netwealth Index Opportunities Conservative Fund

Netwealth Index Opportunities Balanced Fund

Netwealth Index Opportunities Growth Fund

Netwealth Active 30/70 Conservative Fund

Netwealth Active 50/50 Balanced Fund

Netwealth Active 70/30 Growth Fund

Netwealth Active 90/10 High Growth Fund

Netwealth Australian Bond Index Fund

Netwealth Australian Property Index Fund

Netwealth Australian Equities Index Fund

Netwealth Unhedged International Equities Index Fund

Netwealth Hedged International Equities Index Fund

Netwealth Global Bond Index Fund

Magellan GSS Global Fund

Magellan GSS Infrastructure Fund

First Sentier GSS Concentrated Australian Share Fund


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