Soft Dollars for Bloomberg Terminals

Is it true you can rent a small apartment in New York for what one of these things costs?

Because I find it really disgusting that some client’s hard-earned life savings—regardless of their political wishes—can be called “soft dollars” and used to purchase absurdly overpriced “research” which ends up financing Bloomberg’s liberal gun control agenda.

Guns - higher gun crime, lower overall violent crime. I’m okay with this.

…but I wouldn’t mind if terminal were attainable by the average investor.

$25,000 per year.

How long have you worked in the business? Are you just learning this?

PS If you’re working in an institutional setting, you won’t be working with any retail investor’s “hard-earned life savings.” You’ll be playing with Other People’s Money…get used to the concept.

I work for a RIA that manages money for mostly retail clients…we have a bloomberg and payfor it ourselves. You need one to work in the fixed income business.

Bloomberg is incredibly useful. You can basically get any kind of data from it instantly. All this data requires a lot of work to compile. Having someone do it for you is a huge service. Whenever news comes out, Bloomberg flashed it in your face in red highlight. Not only that, it’s sort of a network tool for finance people. You can look up the contact information and send messages to any other Bloomberg user. Many people even place OTC trades this way. $25,000 a year is cheap compared to the service that it provides.

That’s exactly what you are working with in any institution setting, and why those retail investors’ advisers are left to explain to them why their expenses are so high at the institutional level, and why their returns lag behind the market so much.

No kidding. Which is why it behooves the industry as a whole, and each one of us in particular to keep our grubby fingers in our own pockets.

Nobody needs to spend $25,000 to see news flashing in red, build a brand new custom trader workstation computer with several big screens and a keyboard with all the extra special keys you need, AND buy all sorts of highly convenient professional data, news, and research feeds, AND, get this, a plain old internet connection to supply all this data. As far as I can tell, Bloomberg hires high-pressure salesmen, not people who do actual research. It must be lot of work to convince an institution to fork over $25,000 per year for a fancy computer workstation.

You don’t understand. $25k is a tiny amount of money to most finance businesses. Let’s say some trader’s PnL plan is $10 million for the year. Even if Bloomberg makes you 1% better, it’s completely worth it. You’re complaining about an amount of money that is irrelevant to most businesses. What do you do for a living anyway?

But back to soft dollars… the general idea is that you can only use soft dollars on things that benefit your client’s portfolio. And almost universally, people think that Bloomberg is useful in finance. If you disagree, then you are free to not use any particular service when you are running your own fund.