Soft Dollars
Also called: soft dollar arrangements, bundled commissions, dealing commission
Soft dollars are research and services a broker provides in exchange for trading commissions, paid out of client assets rather than the manager's own revenue. The conflict is direct: the manager chooses where to trade, the client pays, and the benefit accrues to the manager. European rules under MiFID II forced research to be unbundled and paid for separately; US practice still permits the arrangement under a safe harbour.
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