soft dollars

Soft Dollars

A means of paying brokerage firms for their services through commission revenue, as opposed to normal payments.

Notes:

For example, a mutual fund may offer to pay for the research of a brokerage firm by executing trades at the brokerage.

See also: Broker, Commission, Mutual Fund, Quid Pro Quo

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Soft dollars

The value of research services that brokerage houses supply to investment managers "free of charge" in exchange for the investment manager's business commissions.

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soft dollars

Payment for brokerage firm services that is provided by commissions generated from trades. Thus, an investor who does significant trading might be provided with "complimentary" subscriptions to market letters or an at-home quote system. Payment is disguised in the form of large commissions paid to the brokerage firm. Compare hard dollars.