Ethics: Soft Dollars: ERISA


Can someone please tell me if a client who is ERISA should be treated differently from one which is non-ERISA and if so how and why.

I have seen a few questions which suggest this point is important but am struggling to find the reason.


Post the questions please

ERISA = Law (hence standard IA applies). Mainly imposes specific fiduciary duties on asset managers and trustees.

One of the ways ERISA might be questioned is that ERISA applies to principal trades.

If a clients account is subject to ERISA, the brokerage generated from principal trades must benefit that account directly.

If non-ERISA, the brokerage generated from principal trades can benefit other accounts - with client’s permission.

But brokerage generated from agency trades can benefit any acct - w/o client’s permission.

Nice one - thanks