Soft Dollars - Client Directed Brokerage not Soft Dollars?


I’m a bit confused. In the Soft dollars section it says “Soft Dollar arrangements include proprietary and third party research arrangements but do not include Client directed brokerage arrangements”

Why isn’t client directed brokerage considered soft dollars? Technically its the same thing but the client is just forwarding the investment manager to a particular broker(that i guess offers more favourable ‘research’?

Thanks in advance

soft dollar rules are there to prevent conflict of interest. if the client has told you what broker to use, then there’s no conflict of interest?

thanks for bringing this question up. I didn’t notice that. Does it mean analyst can use commission from client directed brokerage to do anything? since it’s not soft dollars?

Lemiman are you sure? I thought ROS were the standards implemented for scenarios involving conflict of interest?? ff8789 im not sure. I wouldnt think so!

I remember seeing one question regarding the ownership on the research obtained from the client directed brokerage. The thing is that the research would belong to this client only, and you can’t share it with other clients in contrast to the research obtain from non-client directed brokerage.