Industry Spotlight -- The Wholesaler (Part 1)

Wholesaler (in the context of financial services): an employee of a mutual fund firm whose sole responsibility is to promote their firm's mutual funds to the financial advisor community.

Their job is to persuade advisors to understand why their funds are better than the rest of the industry. Keep in mind, this is an informal term used by the retail investment industry. Actual job titles for this position are Vice President (Sales), Regional Sales Director, etc....but within the brokerage community, they are referred to simply as "wholesalers."


The need for this profession resonates in the sales-driven culture of the industry. The mutual fund industry, to say the least, is quite saturated with there being an array of different types of mutual funds, which might specialize in a specific sector, geographic location and/or asset class. Financial advisors, who invest their clients in mutual funds, have a huge selection to choose from. As most mutual fund firms carry a wide selection, a financial advisor will typically only use the investment products of a few firms that he or she is comfortable with. For example, virtually every fund company, such as AGF, Franklin Templeton or MacKenzie Financial, has a Canadian equity fund, a global equity fund, Canadian balanced fund, etc...and many advisors will simply keep their clients invested in an array of funds of a single fund company or two. Generally, not use six different mutual funds at six different firms.

The next post will explore how wholesalers accomplish this, as well as a couple criteria that the financial advisor uses to assess a mutual fund...one that you're less likely to know about, as they don't necessarily bear any benefit to the client.