Where the TMD came from
TMDs were introduced as part of the Design and Distribution Obligations (DDO) regime, which commenced on 5 October 2021. DDO shifted some responsibility for consumer outcomes onto product issuers and distributors, not just the point-of-sale disclosure of the PDS.
Issuers must publish a TMD for almost every retail financial product. Distributors, including financial advisers when they recommend a product, must take reasonable steps to ensure distribution is consistent with the TMD.
What a TMD includes
- The target market. A description of the class of consumers whose likely objectives, financial situation and needs the product has been designed to meet.
- Distribution conditions. Restrictions on how the product is distributed, e.g. limits on channels, eligibility criteria, screening questions.
- Review triggers. Events or circumstances that would make the issuer review whether the TMD is still appropriate (e.g. a material complaint volume).
- Reporting requirements. What distributors must report back to the issuer, and how often.
What advisers do with a TMD
Advisers are distributors under DDO when they recommend a specific product to a retail client. In practice that means:
- Check the TMD for any product you recommend, and confirm the client falls inside the described target market.
- Note any distribution conditions and whether they are satisfied.
- Keep the file evidence, a reference to the TMD version, a brief note on target-market fit, and any reporting obligations.
- Report significant dealings outside the target market to the issuer in the required form.
“I read the PDS” is not evidence the TMD was checked. Treat them as separate ticks on the file checklist.
How FundFetch helps. Every result that has a TMD shows both the current PDS and the current TMD side-by-side, and the archive view holds the version current at the date of advice. The export table includes the TMD effective date so it lands intact in the SOA file.
TMD vs PDS, different jobs
The PDS tells the client what the product is and what it costs. The TMD tells the distributor whom the product is appropriate for. Both documents are required, both are issued by the product's issuer, and both should be checked, but they answer different questions and have different review cycles.
This page is not legal advice
Plain-language summary for licensed Australian advisers. The binding obligations sit in Part 7.8A of the Corporations Act 2001 and ASIC RG 274.