I have to choose two broker A and B, broker A average transaction cost 100USD, total cost 500 USD, Broker B averga transaction cost 200 USD, total cost 400 USD, which one should I choose? except above, what other factors should be consider? financial statablity of broker? range of other services? ability to generage amount of brokerage? if I am in a fund firm, which uses propriatery research from brokerage? if I don’t disclose this to retail clients(because research report valuable), do I violate duties to client?
1/ I think total cost matters most, so choose B 2/ Financial stability of broker, responsiveness to the manager, commission rate and range of other services are all “other factors” to consider together with Best Execution. 3/ Is the proprietary research obtained by client brokerage or you pay for it? Sorry but your question is vague to me.
Thanks, but I check text, we minimize transaction cost, thus A. compared with two other factors, ability to generate amount of brokerage is more important for best execution. not generated by client brokerage, I pay for it, so what’s the answer. Thanks for quick response, but my opinion different
CFAI page 145, Standards 3, under recommended, under clarification, “ability to obtain most favorable total cost”. Under general principle it says minimize transaction costs but I think it should not be seen too narrow as just transaction costs but total cost for the transactions. Just my opinion. 3/ Then it’s not soft dollars, no need to disclose.
thanks 3/ does it violate duties to client? what does duties to client mean?
seriously, go refer to your book when it’s just some definition question.