Soft Dollar must directly benefit the client right?
Is there any situations or scenarios where the investment manager can use soft dollars for management purposes? I could almost swear in one of the problems in CFAI reading (don’t remember and might be making this up) that it was ok to use brokerage dollar for the firm as whole in certain scenarios?
Am I wrong?
Is there any situations or scenarios where the investment manager can use soft dollars for management purposes
Nop I don’t think so. Research you obtain from soft dollar arrangements has to be “allowable” i.e. directly assist the manager in the inv decision-making process only, not the overall management/operation of the investment firm.
All examples of eligible research I could note from the CFAI are the following:
- financial analysis, trading and risk analysis
- broker selection, security selection, asset allocation
- a software that assists in analyzing economic trends in industries that the manager follows
- a trading room TV set that receives the Financial News Network
- a computer workstation providing analysis (not the electricity that runs the equipment)
- the Bloomberg service and terminal (provided it’s used by the manager, not by clients who may wish to access financial info)