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. Mutual funds sold through a third party are generally subject to higher fees. MFEX has signed a unique global agreement with a fund company that covers a wide range of its funds in several jurisdictions. There are many commissions related to partnerships between third-party companies 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. 950 distribution agreements with fund companies covering 80,000 funds, MFEX manages with each distributor a unique distribution agreement allowing access to all our fund partners. 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. 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. Third-party distribution partnership agreements differ from sector to sector. Many third parties also offer a number of services that support investment funds. MFEX is constantly adding new fund agreements on behalf of its MFEX Rebates Out Service customers, providing fund companies with a comprehensive solution for negotiating, signing and updating distribution agreements, voting positions and paying off discounts to 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.