Firstly, a quick reminder that DDO requires all your marketing materials to be updated with either info about the target market or where to find the TMD. Don’t leave it to the last minute!
Secondly, I’m hearing that lots of issuers are now turning their thoughts to reasonable steps and distribution conditions. This is where Wattletree really comes into it’s own. More below.
Thirdly, we had 200 people tune into the FSC DDO complaints webinar last week. Crazy. But good 🙂 Here is the .xls complaints form that we discussed. If you need a hand implementing it, let me know.
Remind me again what Wattletree actually is?
Wattletree uses big data to demonstrate that your customers are within the target market for that product. It can replace* asking questions up front, asking advisers for attestations and trying to get platforms to give data.
*Get your own legal advice of course!!
How on earth does it do that?
We get quarterly feeds from distributors (ie platforms, stockbrokers, unit registries), collate the data in Wattletree and then append each customer record with geo-demographic information. We then produce a report that matches the characteristics of the TMD against the characteristics of the population.
Er, but how does it work without asking consumers any questions?
Right, time to talk statistics. Stay with me folks!
Wattletree uses a combination of household level data (like house prices) combined with ‘Statistical Area Level 1’ (SA1) data to build a picture of the customers in each product.
SA1 units represents an aggregation of 250 households or 400 persons, and allows flexibility for summarising the socio-economic conditions of an area and building up the overall target market determination for a given product.
Let’s take vulnerable customers as an example. Each customer record is measured against the following seven data points:
- Physical Address = aged care facility
- Age of the individual
- SA1 is in a low socio economic area
- SA1 suggests low or no income
- SA1 employment conditions
- SA1 English proficiency
- SA1 home ownership
We then create a score for each customer record using relevant information from both contributor and SA1 sources. This process is followed for each of the areas that we measure, using a variety of information sources at either the individual, household or SA1 level.
But I’m an individual!
Yes of course you are darling, but don’t forget that DDO requires issuers and distributors to consider the ‘class of consumers’, not every single individual customer.
If you look at the accuracy of the information about a single consumer in Wattletree, you would find that some information is correct and some is not. Within any area there is always going to be individuals and households with different characteristics to the overall population.
However, once you have more than 500 consumers, and you leverage demographics from population cohorts, the overall accuracy of the information increases significantly, and can be relied on in decision making.
If there’s a burning DDO question that no-one seems to have a good answer to, or you just need to understand how Wattletree works in more detail, please get in touch. I invite you to shoot through your Q’s using the below form or alternatively you can call me on 0417 970 818. There’s no such thing as a silly question*
*OK, we all know that’s rubbish but you know what I mean!