Third-Party Distributor


DEFINITION of 'Third-Party Distributor'

The name given to institutions that sell or distribute mutual funds to investors for fund management companies without direct relation to the fund itself. For mediating these transactions, third-party distributors receive a portion of the trailer fees associated with mutual fund sales for acquiring new business.

BREAKING DOWN 'Third-Party Distributor'

This arrangement works well for fund companies that don't have the necessary resources to enter new markets and instead decide to outsource to existing fund marketing companies.

  1. Third Party

    An individual or entity that is involved in a transaction but ...
  2. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  3. Trailer Fee

    A fee that a mutual fund manager pays to a salesperson who sells ...
  4. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  5. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
  6. Benchmark

    A standard against which the performance of a security, mutual ...
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