What Is Soft Dollar Arrangements?
Agreements where an adviser directs client brokerage commissions to pay for research, tools, or services that benefit the adviser's business. These must be disclosed to clients, and only bona fide research and execution services qualify; cash rebates are prohibited.
Soft Dollar Arrangements across 2 exams
Soft Dollar Arrangements appears on the following exams. Each defines it in the context candidates are tested on:
- Series 65
- Agreements where an adviser directs client brokerage commissions to pay for research, tools, or services that benefit the adviser's business. These must be disclosed to clients, and only bona fide research and execution services qualify; cash rebates are prohibited.
- Series 66
- Agreements where an adviser uses client commissions to pay for research, technology, or other services that benefit the advisory business rather than paying from the adviser's own funds. Series 66 candidates must recognize soft dollar arrangements as potential conflicts of interest requiring disclosure.