Target Market Determination: Why Your TMD Is Also Your Marketing Brief

Most financial product issuers treat the target market determination as a compliance document. Legal drafts it, the board approves it, it goes on the website and nobody in marketing reads it again.

That is a mistake, and ASIC has already shown what it costs. The TMD is the one document in your business that says, in writing and in advance, who a product is for. That is exactly what a good marketing brief is supposed to do. Under the design and distribution obligations, the way you market a product is part of how you distribute it. A campaign that reaches the wrong people, through the wrong channel, with the wrong message can breach the law even if every word in the ad is accurate.

If you issue or distribute financial products to retail clients, your TMD should shape your media plan as much as your product disclosure statement does. This article explains how the two connect, what the first DDO penalty case teaches marketers and how to build the TMD into campaign planning.

What is a target market determination?

A target market determination is a written document that describes the class of consumers a financial product is likely to suit, and the conditions on how it should be distributed. It sits within the design and distribution obligations in Part 7.8A of the Corporations Act, which ASIC explains in Regulatory Guide 274.

The TMD must be made available to the public free of charge. RG 274 also notes that promotional material for products that require a PDS must describe the target market or say where the TMD can be found.

The idea behind the regime is simple. Products should be designed for a defined group of people, and then actually reach that group. The TMD is where the issuer writes down who that group is.

How does DDO affect financial services marketing?

Through the reasonable steps obligation. Under section 994E Corporations Act, a person who makes a TMD must take reasonable steps that will, or are reasonably likely to, result in retail product distribution conduct being consistent with the determination. Distributors have a parallel obligation.

Marketing is one of the clearest places those reasonable steps show up. ASIC's guidance says it will consider whether an issuer's promotional materials and marketing campaigns direct distribution towards the target market. A product designed for experienced investors with a small portion of their portfolio to allocate should not be promoted like a savings account.

The law also includes a sensible limit. An issuer is not taken to have failed the reasonable steps test merely because a retail client outside the target market acquires the product. The question is whether your steps, including your marketing, were reasonably likely to keep distribution on target.

What happened in the Firstmac case?

Firstmac is the case every marketing team in financial services should know, because the facts are so ordinary. Nothing about the campaign would have looked unusual to most marketers. A business had a list of existing customers, a new product to promote and a channel to reach them.

In ASIC's first civil penalty action against a distributor for DDO breaches, the Federal Court ordered Firstmac to pay $8 million in penalties in January 2025. The Court had found that Firstmac ran a cross selling strategy, marketing an investment in its High Livez managed investment scheme to 780 existing term deposit holders, and sent them the PDS without first taking reasonable steps to ensure consistency with the product's TMD.

The lesson is not about the investment product itself. It is about the campaign. Emailing an existing customer base about a different, riskier product is a marketing decision, and it was the marketing decision that breached the law. ASIC's Chair said the judgment should deter anyone cross selling financial products without considering their design and distribution obligations.

Which marketing channels suit a narrow target market?

ASIC's guidance is direct on this. RG 274 says mass marketing or prominent online methods, such as banner advertising, generally are inappropriate for a product with a narrow target market, particularly a high risk product.

ASIC's surveillance work has shown what that looks like in practice. In its review of reasonable steps compliance, ASIC found one issuer of contracts for difference continued to sponsor high profile sports teams whose main supporter base would likely sit outside the product's target market. The sponsorship was a brand decision. ASIC treated it as a distribution decision.

Sponsorships, broad programmatic campaigns and open social ads are the channels most likely to cause trouble, because they reach large audiences with little control over who sees the message. That does not make them off limits for every product. It means the decision needs to be tested against the TMD and documented.

For a narrow target market, better channels usually look like advised distribution, targeted content for a defined professional audience, platforms with appropriate gatekeeping and email to people who have shown relevant interest. For a broad target market, mass channels may be reasonable, but the message still needs to match who the product suits.

How do you align ads and content with your TMD?

Make the TMD part of the creative process, not a check at the end. When compliance only sees an ad after it has been designed, approved internally and scheduled, every change feels like friction and the pressure is on to wave it through. When the TMD is in the brief, the creative work starts inside the lines.

RG 234 now links the two directly. ASIC's advertising guidance says any statements about the consumers a product suits should be consistent with the product's TMD. A headline like "the smart choice for first home buyers" or "built for retirees" is a statement about who a product suits. If that group is not in your TMD, the ad is out of line with your own document.

A few working rules help:

1. Give the creative team the TMD alongside the brief, with the target market, excluded groups and distribution conditions highlighted.
2. Check targeting settings on paid social and search against the TMD. Age, interest and lookalike audiences can pull an ad far outside the intended group.
3. Review imagery and tone. A lifestyle image of a young couple can signal a target audience as clearly as the copy does.
4. Treat existing customer lists with care. The Firstmac case shows that marketing to people who hold one product does not make them the target market for another.
5. Record the reasoning. If ASIC asks why you chose a channel, a written rationale linked to the TMD is your best answer.

What should you monitor after a campaign launches?

Distribution does not end at launch, so neither does your obligation. Issuers need to monitor whether distribution stays consistent with the TMD and review the TMD when needed.

This is where marketing data earns its keep. Your campaign platforms already tell you who clicked, who applied and where they came from. The same reports that show cost per lead can show whether leads look like your target market.

Useful signals include who is actually applying, which channels they came from, complaint themes, and any significant dealings outside the target market that distributors report. If a campaign is pulling in people outside the target market, adjust it. If the product is being taken up by a markedly different group than planned, that may be a sign the TMD itself needs review.

Want a second view on whether your campaigns line up with your TMDs? Talk to our team and we will walk through it with you.

Frequently asked questions

Do TMDs apply to wholesale products?

The design and distribution obligations are aimed at products made available to retail clients. If a product is offered only to wholesale clients, the TMD requirement generally does not apply, though other obligations still do.

Can we ask customers to confirm they are in the target market?

ASIC has cautioned against relying on consumers to self certify that they fit the target market. Questionnaires and checks can help, but they should be designed to test fit, not just collect a tick.

Who is responsible when a distributor runs the campaign?

Both parties have obligations. The issuer must take reasonable steps across its distribution arrangements, and the distributor must take its own reasonable steps and report the information the issuer needs.

Does a TMD need to appear in every ad?

For products that require a PDS, promotional material must describe the target market or say where the TMD can be found. Short formats commonly link to the TMD rather than reproduce it.

How often should a TMD be reviewed?

The TMD sets its own review triggers and periods, and the issuer must review it when a trigger occurs. Campaign data showing distribution drifting outside the target market is worth treating as a prompt.

References

• Australian Securities and Investments Commission. (2024, September). Regulatory Guide 274: Product design and distribution obligations. download.asic.gov.au

• Australian Securities and Investments Commission. (2024, September). Design and distribution obligations: Compliance with the reasonable steps obligation (REP 795). download.asic.gov.au

• Australian Securities and Investments Commission. (2025, January 24). Firstmac ordered to pay $8 million in penalties for failing to comply with its design and distribution obligations (25-003MR). asic.gov.au

• Corporations Act 2001 (Cth) s 994E. austlii.edu.au