How will DDO impact you?

The Act requires that:

• Issuers design financial products that are likely to be consistent with the likely objectives, financial situation and needs of the consumers for whom they are intended (the target market), and take reasonable steps to ensure investors outside the target market are unlikely to acquire a product. Issuers include, but are not limited to, asset managers, insurers, operators of investment platforms, trustees of superannuation funds and banks.
• Distributors must take reasonable steps to distribute financial products to the target market. Distributors (including personal advice distributors) are also obligated to report complaints, significant dealings and information specified by the product issuers.

The consequences of not complying with these requirements are significant, with the legislation allowing for civil penalties up to $200,000 for individuals and $1 million for corporations, as well as potential criminal sentences.