Key Takeaways

  • 3rd party marketing connects firms—especially in finance—with specialized marketing professionals to raise capital and promote offerings.
  • Services range from sales strategy to event planning, brand awareness, investor education, and audience targeting.
  • These marketers operate on commission or hybrid pay models and may work across multiple client portfolios.
  • Agreements often include performance clauses and long-term commitments of 3–5 years.
  • 3rd party marketing differs from multi-level marketing and plays a key role in compliant capital raising for investment firms.
  • Using 3rd party marketers offers benefits like expertise, scalability, and access to data-driven strategies.

A third-party marketing agreement is used by investment companies, hedge funds, and start-ups when advertising directly to a potential client or investor is prohibited by federal regulations.

Overview of Third-Party Marketing

Third-party marketing serves as a consulting service for persons, such as hedge fund managers, who are in need of the expertise of experienced marketing professionals. These individuals may also be experts in the field of sales and investment marketing.

The role of a third-party marketer is raising assets. In return for the services provided by the marketer, the marketing firm earns a percentage, which is usually estimated at 20 percent. There are also the management and performance fees paid throughout the duration of the agreement with the investor client.

Third-party marketers are also referred to as third-party distributors. These marketers are individuals licensed by the Financial Industry Regulatory Authority.

Key Benefits of 3rd Party Marketing

Engaging a 3rd party marketing firm offers significant advantages for businesses across industries, especially in complex sectors like finance and healthcare. These include:

  • Specialized Expertise: Firms benefit from marketers with deep industry knowledge, allowing for targeted and effective campaigns.
  • Cost-Effective Scaling: Rather than building an internal team, businesses can scale quickly with external partners without long-term overhead.
  • Access to Tools and Data: Many third-party marketers use advanced analytics and media platforms that would be costly for companies to adopt alone.
  • Fresh Perspective: Agencies can bring an unbiased view and innovative ideas that internal teams may overlook.
  • Brand Awareness Boost: Marketers often have existing media and industry contacts, which can fast-track brand visibility.
  • Sales Acceleration: Third-party efforts often focus on converting leads to customers, not just generating exposure.

Third-Party Marketing Services

Marketing services for third-party firms are usually completed off-site at the firm's offices. Marketing firms may be working on behalf of multiple investment managers at any given time.

The two areas that most often apply to third-party firms are marketing and sales. However, there are dozens of other activities that these firms handle.

In regard to a hedge fund client, the activities completed by the third-party marketer depends on the background and size of the firm and its client. Some of the services provided by marketing firms include:

Marketing

  • The development of marketing materials.
  • Guidance regarding new products.
  • Development of the investor's database.
  • Media relations.
  • Request for proposal (RFP) development.
  • Event marketing.

Third-party marketers usually work on a commission basis, but some charge a small retainer along with taking a percentage of the fees based on the assets raised.

While experience plays a significant role in hiring a third-party marketing firm, the main point of evaluating and hiring a firm is almost exclusively based on the firm's ability to raise assets.

Sales

Sales and responsibilities that activities marketers are involved with include cold calling, attending industry conferences, managing a sales team, and organizing conference calls and on-site visits.

Additional responsibilities of a third-party marketer include managing the sales cycle, educating potential investors, and meeting with analysts.

Due to the depth of involvement and the variety of responsibilities that a third-party marketer undertakes, the marketing contract can last for three to five years. Often, the services agreement will include a clause that guarantees that the marketer will be paid even if the sale comes in after the marketer and the hedge fund client are no longer working together.

Types of 3rd Party Marketing Campaigns

Third-party marketers tailor their efforts to the specific needs of each client. Common campaign types include:

  • Lead Generation Campaigns: These aim to attract qualified prospects and convert them into interested buyers or investors.
  • Product Launch Campaigns: Used when introducing new services, often with a strong digital, PR, and influencer component.
  • Retargeting and Remarketing: Campaigns that re-engage users who previously interacted with the brand but didn’t convert.
  • Audience Targeting Campaigns: Using 3rd-party data, marketers can reach specific demographics, behaviors, or interest-based segments to ensure relevance.
  • Multichannel Campaigns: Integrated efforts across email, social media, paid ads, and SEO to maximize visibility and reach.

Third-party marketers may also leverage 3rd-party audiences—aggregated user data from external sources—to sharpen targeting and improve campaign efficiency, particularly in programmatic advertising​.

Third-Party Working Requirements

There are a few areas that third-party marketers look at before agreeing to work with a hedge fund. These include:

  • The client's track record. Marketer's like to work with clients with longevity.
  • Certain strategies are time-sensitive, making them out of favor at specific times. If your current strategy falls in that timeframe, third-party marketers will not come to a firm's rescue.
  • Marketers look at the history and track record of the manager, which are important factors.
  • The firms' fund infrastructure and performance are also important factors.

Legal and Regulatory Considerations

Firms using 3rd party marketers—particularly in the financial sector—must comply with relevant legal and regulatory frameworks:

  • FINRA Licensing: Individuals engaging in securities marketing must often hold licenses under the Financial Industry Regulatory Authority (FINRA).
  • SEC Compliance: Marketing claims and investor outreach must adhere to rules set by the U.S. Securities and Exchange Commission, especially regarding accredited investors.
  • Contractual Protections: Agreements often include exclusivity clauses, termination provisions, confidentiality obligations, and non-circumvention language to protect all parties.
  • Marketing Disclosure Rules: All promotional content must avoid misleading claims and follow industry best practices for disclosure and accuracy.

Because of these complexities, working with legal counsel experienced in marketing and securities law is advisable. You can find a qualified attorney through UpCounsel to help review or draft a third-party marketing agreement.

Third-Party Marketing Versus Multi-Level Marketing

While similar in name, the two have little in common. Third-party marketing firms are in the business of providing private marketing to procure sources of legitimate funding for investment hedge funds and start-ups.

Multi-level marketing is an often-used sales practice, although it has a controversial reputation. Its business model requires low-level distributors to pay commissions to higher-level recruiters.

For a multi-level marketer to be successful, they must recruit other salespersons. The marketer receives a commission on the sales of each salesperson they have recruited. An example would be a person working as a door-to-door salesperson. They make money on their sales plus commission on the recruited person's sales.

There is one similarity between the two marketing types in regard to affiliates. With third-party marketing, the affiliate is the third-party marketing firm that is working for the hedge fund or investment company.

Multi-level marketing, however, is dependent on recruiting affiliates for the company to be successful. The affiliates are relied upon to bring in diversity in investment cash flow to the owners of the company.

Choosing the Right 3rd Party Marketing Partner

When selecting a third-party marketing agency, businesses should consider:

  • Reputation and Track Record: Look for a proven history of success in your industry or with similar client types.
  • Client Roster: Agencies with experience representing firms of similar size or sector are more likely to understand your needs.
  • Reporting Capabilities: The ability to provide clear, data-driven insights into campaign performance is essential.
  • Communication Style: A good agency maintains transparency, responsiveness, and strategic alignment with your goals.
  • Compensation Structure: Understand whether the firm charges a flat fee, commission, retainer, or a hybrid model.

Due diligence is key. A strong partner will not only generate leads or awareness but also contribute to long-term brand equity and investor trust.

Frequently Asked Questions

1. What is a 3rd party marketing agreement? It’s a contract where an outside marketer promotes your firm’s products or services, often for a commission or fee, especially in industries where direct solicitation is regulated.

2. Who typically uses 3rd party marketing services? Hedge funds, investment managers, startups, and other businesses that lack internal marketing capacity or need regulatory-compliant outreach often engage these services.

3. How are 3rd party marketers paid? Compensation varies, but common models include commission-based pay, retainers, or a combination. Many agreements guarantee payment on leads or investments closed, even post-contract.

4. Are 3rd party marketing services legal? Yes, but in sectors like finance, firms must ensure marketers are licensed and comply with SEC and FINRA rules. Contracts should also be reviewed for legal compliance.

5. What’s the difference between 3rd party marketing and affiliate marketing? Affiliate marketing typically targets consumers and rewards sales or clicks. 3rd party marketing focuses on professional-level outreach and investor relations, often in regulated industries.

If you need help with a third-party marketing agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.