A constant challenge for the development of China's mutual-funds industry is the bottleneck of distribution, with a handful of banks such as ICBC and China Construction Bank owning the lion's share of fund sales.

Bottlenecks are a symptom of regulation. The overseers for securities, banking and insurance are fragmented and jealous of their authority.

Industry executives would welcome the development of a nationwide platform independent of the top banks and brokers that could become important distributors of all types of investment product. So far, none has been allowed to develop.

China's a big place, however, and networks are being developed that could one day serve as an alternative to the commercial banks.

One possibility: Independent insurance intermediaries. The nation's two leaders in this specialised field, CNinsure and Huakang Financial, are both based in Guangzhou and share a desire to expand their business beyond selling just insurance. Regulation is the only thing holding them back.

CNinsure, which is listed on Nasdaq, was founded in 1998 as a distributor of third-party insurance companies' products, and includes both domestic and foreign insurers as its clients. Huakang began operations in 2006 and has focused on life insurance, where it has a bigger market share.

Unlike most players in financial services, there is no big broker, insurer or bank behind them. The founder of CNinsure, Hu Yinan, is an entrepreneur who once specialised in importing and exporting finished goods. Huakang's shareholders include IDG Capital Partners, a China-focused investment firm, and Matrix Partners, a venture capital provider.

Although the biggest insurance companies such as China Life and Ping An Life have huge national distribution of their own, the independents compete by focusing their agents on suburbs of fast-growing cities, rather than urban centres, and by being faster to market with a variety of policies.

These players got a lift early this year when the China Insurance Regulatory Commission allowed them to standardise their operations nationally, as opposed to having to operate separately in each province.

The liberalisation they are waiting for, however, is to be allowed to become third-party distributors in securities and funds. This is not up to the CIRC, but to its banking and securities brethren.

The insurance intermediaries are hopeful, however. Both have stated their goal as becoming leaders not just in insurance intermediation, but for financial services in general. Huakang even sets a timeframe, 2012-2016, to make this happen.

"Our idea is to create a supermarket, like Wal-Mart," says one official at Huakang. Initially this is to be for all types of insurance, but the platform could in theory be expanded to include other types of products and services.

CNinsure already includes mortgages on its platform, while Huakang is beginning to sell third-party group life policies to private companies, giving it a toehold in the pensions market.

Compared to the insurance companies, these intermediaries are small players. Huakang last year sold Rmb1 billion ($146 million) of premiums, while CNinsure sold about twice that amount.

But given the still-low penetration of insurance in China (below 4% of the population), and the expansion of wealth, the business is set to grow.

Officials at Huakang say the independent intermediaries are growing even faster, thanks to their ability to penetrate areas where the big insurance companies aren't targeting, and the broad mix of policies and providers they can offer. "We're growing 30-50% faster than the insurance industry as a whole," says a Huakang official.