Third party marketing is a proven, cost-effective outsourced sales strategy successfully used by many investment managers.

Rather than invest limited resources to a dedicated internal sales force, many firms choose to outsource their sales function to third party marketing organization.

Third party marketers (3PMs) leverage their industry knowledge, contacts, and sales acumen on behalf of a limited roster of clients.

Third party marketing firms have their own area of specialization and emphasis. Some examples of ways 3PMs differentiate themselves include a focus on an asset class, such as large cap growth, small cap value, and emerging markets. Others may focus on a geographic region; still others provide dedicated sales coverage in a market segment, like sub-advisors, corporate pensions, or public funds.

Why Hire a Third Party Marketer?

Reasons may include: to launch a new product; seed a start-up with critical asset; expand into new market segments; fix an ineffective distribution effort; use an alternative to hiring internal sales people; and grow an established product line with limited presence.

The Role of the Third Party Marketer

Many investment management firms are headed by experienced investors, not experienced salespeople. Third party marketing is a cost-effective way to benefit from a full-time, professional sales effort while controlling fixed costs.

The 3pm then helps to develop the firm’s “story,” create a marketing plan and sales and marketing materials, initiate and execute the plan, and convert opportunities to assets. An investment manager’s relationship with a third party marketer is more of a strategic partnership…not a typical vendor relationship.

Differentiation is Key

Because the vast majority of equity managers live somewhere in the same style box, it can be tough to differentiate one firm from the often hundreds of others investing with the same style. For new and emerging managers with little name recognition, the challenge is difficult.

How to Choose the Right Outsourced Sales and Marketing Partner

Third party marketing is not a cookie-cutter industry. Each firm has its own unique blend of industry focus, asset class/product expertise, and geographic concentration.

Just as important, investment managers must find the one with whom partnering just “feels right.” This is vital because the relationship is very much a partnership, and not a typical vendor relationship.

According to Steve Rubenstein, President of Arrow Partners, here are five questions any investment manager should ask before hiring a 3PM:

1. Am I committed to growing my business and fully supporting the effort?

2. Am I willing to spend equal time choosing a marketing firm as I do choosing an investment?

3. Would I hire their salespeople for my own staff?

4. Is their track record of success one I am comfortable with?

5. Would I want them representing my strongest competitor?

Education and Information

Many third party marketers provide their manager-clients with a wide range of additional services. These may include analysis of holdings and peer group rankings; completion of RFPs and questionnaires, and population of industry databases.

A Culture of Compliance

The 3PM industry has come under increased scrutiny in recent years with respect to conflicts of interest, lack of disclosure, and limited transparency. Every firm must develop appropriate “culture of compliance” principles, and commit to staying up-to-date on the ever-changing regulatory landscape.

An Evolving Industry

A few 3PM firms are also now offering centralized back office, trading, compliance, strategic planning, and in some cases, capital, to select smaller and emerging market managers.

Third party marketing and inbound marketing are not the same. A 3PM is an outsourced sales firm that provides its industry, sales Rolodex, and contact expertise to bring in new assets. An inbound marketing firm, such as InCapital Marketing, provides creative development and design of wealth manager websites, pitch books, eBooks, and email marketing.

For more information on third party marketing, please contact Steve Rubenstein of Arrow Partners at 914-251-1084,, and