Mutual funds, annuities, life insurance policies, and other prepackaged investment products are sold an external wholesaler. Several wholesalers are employed major investment firms, each of whom is in charge of marketing activities in a specific region. Wholesalers work to build and strengthen business relationships with brokerage firms that sell investment products, as well as self-employed securities brokers.
An external wholesaler is typically assigned to a specific product line, which means that a single firm may employ one wholesaler to promote mutual funds and another to market annuities within a given region. For each product, marketing executives create prospectuses and advertising materials, but the wholesaler must supplement these materials with training materials and fact sheets. Purchase fees, previous year’s returns, and details of the securities that a fund or annuity contains are typically included in fact sheets. Since investment representatives often prefer to sell a small number of funds, the external wholesaler must decide which products to actively promote.
In the majority of cases, an external wholesaler collaborates with an internal wholesaler. The latter works from a desk, whereas the former spends the majority of his or her time traveling and meeting clients. Typically, the internal wholesaler contacts existing business partners and prospective clients and arranges for in-person meetings with these groups or individuals with the external wholesaler. The external wholesaler may be asked to make presentations to several groups of clients in a single day.
Wholesalers explain the key features and benefits of specific investment funds during a sales presentation. Sales representatives who attend the presentation are given fund prospectuses and fact sheets, and they are given the opportunity to ask the wholesaler questions about funds and products at the end of the session. Representatives who are interested in the products can contact the wholesaler to order additional copies of the sales materials. If representatives are dissatisfied with a particular product, the wholesaler may make a different presentation involving a different fund.
Most countries’ securities laws require wholesalers to be licensed in order to sell securities, and many of these individuals also hold insurance licenses. A wholesaler and a sales representative may hold a joint meeting in which the sales representative tries to sell products to a client. Wholesalers typically receive commission when a representative sells a product, so both parties are motivated to make sales meetings a success.