Using “the Measures for the Administration of Bank Wealth Management (henceforth BWM) Funds Sales” as an exogenous shock in fund distribution channels in Chinese BWM industry, we investigate the impact of non-affiliated distribution on fund performance. We find that the adoption of non-affiliated distribution brokers has a positive effect on BWM fund performance. We further find that the effect is more pronounced when the non-affiliated distribution broker has more market power and when the fund issuer has better governance. We interpret our findings to indicate that non-affiliated distribution brokers alleviate the agency problems of fund managers by introducing both ex-ante and ex-post monitoring, highlighting the role of non-affiliated distribution brokers as an external governance mechanism in wealth management industry.