Third-Party Distributor

What is a 'Third-Party Distributor'

A third-party distributor is 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.

RELATED TERMS
  1. Trailer Fee

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

    A trust company, bank or similar financial institution responsible ...
  3. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  4. Fund Of Funds

    A mutual fund that invests in other mutual funds. This method ...
  5. No Transaction Fee Mutual Fund

    A mutual fund that is offered to investors by a brokerage firm ...
  6. Multi-Level Marketing

    A strategy that some direct sales companies use to encourage ...
Related Articles
  1. Professionals

    The Lucrative World Of Third-Party Marketing

    Hedge funds don't sell themselves. Marketing experts reel in the big fish.
  2. Mutual Funds & ETFs

    A Mutual Funds Guide for Young Investors

    Learn how mutual funds work, why they are so popular and how younger investors can get started by putting mutual funds in their IRAs or 401(k)s.
  3. Personal Finance

    Mutual Funds: Brand Names Vs. House Brands

    Find out whether an in-house fund will serve you better than a major company's fund offerings.
  4. Investing

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  5. Mutual Funds & ETFs

    Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.
  6. Mutual Funds & ETFs

    Trading Mutual Funds For Beginners

    Learn about the basics of trading and investing in mutual funds. Understand how the fees charged by mutual funds can impact the performance of an investment.
  7. Investing

    How to Rate Your Mutual Fund Manager

    What to really look for when you're deciding on a mutual fund.
  8. Investing Basics

    4 Mistakes to Avoid When Choosing Mutual Funds to Invest in

    Mutual funds are a great way to build wealth but not all of them are the same. Investors have to be mindful of fees, turnover, redundancy and performance.
  9. Mutual Funds & ETFs

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  10. Mutual Funds & ETFs

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
RELATED FAQS
  1. What are the advantages of hiring a third-party marketing company?

    Explore the advantages of using a third-party marketing service to drive a marketing campaign. Like with most marketing strategies, ... Read Answer >>
  2. How do I calculate the loan-to-value ratio using Excel?

    Learn what a mutual fund and a money market fund are, and understand the differences between each and how they serve various ... Read Answer >>
  3. How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group ... Read Answer >>
  4. How much of a company's stock can a mutual fund own?

    There is no written rule that stipulates how much of a company a mutual fund can own. Instead, there are two major factors ... Read Answer >>
  5. Why don't mutual funds trade like stocks?

    Learn how mutual funds differ from exchange-traded funds (ETFs) in how they are traded. Also, learn what fees are involved ... Read Answer >>
  6. What kinds of expenses are included in the expense ratio?

    Understand the variety of costs and charges that are included in the total expense ratio assessed to investors using mutual ... Read Answer >>
Hot Definitions
  1. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  2. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  3. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  4. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  5. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  6. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
Trading Center