Some asset managers get into the mutual fund business to provide a pooled investment vehicle for smaller accounts or because a few existing clients asked for it. But many mutual fund firms want to grow beyond their existing client base. They want to generate demand through third parties such as Schwab, LPL or Merrill Lynch. Although obtaining selling agreements with these firms can be expensive and time-consuming, eventually most firms gain access.
Access, however, doesn't automatically mean sales. Competition with the largest name brands is fierce. They have ample resources, including experienced executives with distribution and sales track records, teams of wholesalers supporting advisors, and spend millions on advertising. These firms also leverage data to find out who their customers are and to target and serve them efficiently.