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An external wholesaler markets mutual funds, annuities, life insurance policies and other types of prepackaged investment products. Major investment firms employ several wholesalers each of whom is responsible for managing marketing activities within a specific region. Wholesalers attempt to develop and enhance business relationships with brokerage firms that sell investment products as well self-employed agents that are licensed to sell securities.
Typically, an external wholesaler is assigned to a particular product line, which means that within a particular region a single firm may employ one wholesaler to promote mutual funds and another to market annuities. Marketing executives create fund prospectuses and advertising materials for each product but the wholesaler must produce training materials and fact sheets to supplement these materials. Fact sheets typically contain key information such as purchase fees, the previous year's returns and details of the securities that a fund or annuity contains. Most investment firms have a wide array of products and the external wholesaler must decide which products to actively promote since investment representatives often prefer to sell a small number of funds.
In most instances, an external wholesaler works alongside an internal wholesaler. The latter is based in an office while the former spends most of his or her time traveling around and meeting clients. Normally, the internal wholesaler contacts existing business partners and prospective clients and makes arrangements for the external wholesaler to have in-person meetings with these groups or individuals. Within a single day, the external wholesaler may be asked to make presentations to several groups of clients.
During a sales presentation, wholesalers explain the key features and benefits of particular investment funds. The fund prospectuses and fact sheets are given to sales representatives who attend the presentation and these individuals are provided with an opportunity to ask the wholesaler questions about funds and products at the end of the session. Representatives who are interested in the products can order additional copies of the sales materials through the wholesaler. If representatives are unimpressed with a certain product then the wholesaler may make another presentation that involves a different fund.
Securities laws in most countries mean that wholesalers have to be licensed to sell securities and many of these individuals also hold insurance licenses. In some instances, a wholesaler may conduct a joint meeting with a sales representative during which the sales person attempts to sell products to a client. Typically, wholesalers receive commission whenever a representative sells a product so both parties have an incentive to ensure that sales meetings are successful.