WELLESLEY, Mass.—Mutual fund wholesaling isn’t what it used to be. Today, highly sophisticated gatekeepers at broker/dealers go by the name of “Fund Selection Units,” where they hold mutual funds up to a whole new set of demanding criteria akin to the rigors that pension plans put investments choices through.  

At the same time, the percentage of sales through independent registered investment advisors and small B/Ds is on the rise. Combined, these two sales trends are having the effect of raising the cost of distribution and making the mutual fund industry even more competitive, with the top three giants—Fidelity, Vanguard and American Funds—dominating the industry even more.

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