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Design and Distribution Obligations (DDO) are consumer protection requirements that apply to financial product issuers and distributors.
DDO is designed to help ensure financial products are:
distributed in a way that supports good customer outcomes.
Challenger, as a product issuer, and advisers and platforms, as distributors, all have responsibilities under DDO.
Under DDO, advisers and platforms must report to Challenger:
Reporting timeframes and requirements are set out in each product’s TMD.
Submitting a single report
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| Submitting multiple reports | DDO Complaints Reporting Template v1.4 DDO Dealings Reporting Template v1.4 |
A TMD describes who a product has been designed for and conditions on how the product can be distributed to customers. It also describes the reporting requirements for distributors.
Our TMD for each retail financial product are available here along with the relevant Product Disclosure Statement.
Please ensure you are familiar with these TMD which describes:
Each Challenger retail product available for new investment has a TMD.
When distributing Challenger products, advisers and platforms are required to:
Providing personal advice does not prevent you from recommending a product outside the target market where it is appropriate for your client. However, you must keep appropriate records and meet your reporting obligations.
A dealing can be considered a significant dealing when a product is distributed outside its target market in circumstances that may result in consumer harm.
Whether a dealing is significant depends on factors such as:
All significant dealings must be reported to us within 10 business days of becoming aware of them.
Distributors are responsible for assessing whether a dealing (or group of dealings) outside the target market described in the TMD, is ‘significant’. This assessment should be made in the context of the distributor’s distribution model, product mix and customer base. As each distributor’s context differs, there is no uniform threshold for determining whether a dealing is significant.
However, to help you assess whether a dealing may be significant, we’ve included some examples below of dealings that could be considered significant dealings outside the target market of our products.
A distributor notes that a number of their investors have asked to withdraw their Fixed Term annuities before the maturity date, not understanding that they could incur a financial penalty.
The target market for the Fixed Term annuity is an investor who has the intention to hold the product for their chosen term. While it can happen that an investor may need to withdraw due to unforeseen circumstances, multiple investors doing so may indicate that the investors objectives, financial situation and needs were not appropriately considered. Investors withdrawing before their maturity date are exposed to risk of consumer harm as they may receive a withdrawal value that is less than the value invested.
A distributor sells a Lifetime Annuity (Liquid Lifetime) to an investor who has a terminal illness and who has indicated that they want the flexibility to make occasional lump-sum withdrawals from their investment.
The investor is outside the target market described in the Lifetime Annuity (Liquid Lifetime) TMD. The investor’s need for ongoing access to their capital is inconsistent with the product’s key features and intended purpose. Selling the product in these circumstances may indicate the investor’s objectives, financial situation and needs were not appropriately considered. The sale of this product may expose the investor to risk of consumer harm.
If you sell a product to a client outside the product’s target market (as defined in the TMD) you must notify Challenger. You can still recommend the product where it is appropriate for your client, but you must keep written evidence explaining why. Challenger may request this information.
Where a product is accessed via a platform, you must follow the platform’s process. The platform will report sales outside the target market to Challenger, and we may request further details.
If you are a distributor or deal in our products you need to provide us with details of any complaints about our product design, product availability or distribution.
Reporting of complaints;
Learn more: Resolving complaints
Records retained 7+ years.