As a distributor, the company works with the investment company to develop a marketing plan for the distribution of the investment fund. Third-party suppliers typically work with staff distribution representatives with global distribution networks. They can be responsible for the sale of individual funds and work with brokers to ensure the distribution of funds via electronic brokerage platforms. ALPS Distributors is one of the leading independent distributors in the investment fund sector. ALPS provides distribution and brokerage services for investment funds to a large number of investment fund companies. Clients range from startups to large, well-established fund companies. She has expertise in the distribution of a wide range of product types, including open funds, closed funds, investment funds, listed funds and private placements. A third-party distributor is an institution that sells or distributes investment funds to investors for fund management companies. These companies generally have no direct connection to the fund itself. Partnerships between investment fund companies and third-party distributors often have to be concluded with different fees and provisions. One of the advantages of using a third-party distribution is its apparent independence from investment fund companies. As a third party, the distributor can make unbiased recommendations to investors without favouring one particular product over another.
Fund managers generally try to sell the products of their own companies, but with a third party, investors can have access to a wide range of products in many different companies. The only snag, as mentioned above, is the higher pricing structure that can come with the use of these distributors. A 12B-1 levy is the main royalty of funds related to the marketing and distribution of the fund. The 12B-1 levy is an annual marketing and distribution fee paid to the distributor. In some cases, an entity may create its own distribution unit from a third-party supplier in order to cooperate with the investment company for the distribution of investment funds. Independent distributors are also available with a number of services offered to investment fund companies. Eaton Vance and Vanguard are two investment fund companies that have set up distribution units for the sale of investment funds. Eaton Vance Distributors is an Eaton Vance investment fund distributor. Vanguard Marketing Corporation is the distributor of Vanguard investment funds.
There are many royalties related to partnerships between third-party and investment fund companies. As a general rule, the distributor receives sales commissions for the sale of the investment company`s investment funds as well as a portion of the royalties related to the trailers related to the fund. The operating costs of an investment fund also include marketing fees paid to the distributor. Because they are independent of fund management companies, third parties are theoretically impartial when selling products to investors. Third parties work with investment firms to sell investment funds. Third-party suppliers generally have large sales and international teams to distribute the investment funds of the investment company. Distributors also have a large distribution network and know-how in the distribution of investment funds.