What are exactly soft commissions ?
I have been reading so much things about Soft Dollars but i have to admit my failure to understand the concept.
In the CFAI book is written that :
“Conflicts arise when an investment manager uses client brokerage to purchase research services that benefit the investment manager.”
So the investment manager purchases research from the client or the broker ? and with who’s money ?
I thought that it was investment manager that paid brokerage with researches :-S
And if the portolio manager pays the fees with researches, so client pays the fees to the portolio manager ?
And also in the CFAI book :
“Whenever members or candidates use client brokerage to purchase goods or services that do not benefit the client, they should disclose to clients the methods… etc”
How can they “use” client brokerage to purchase anything ?
For me it is like saying : “i use my current liabilities to buy assets…” no sense.
Thanks for support,
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.