Series 66: 9.2.5 Soft-Dollar Arrangements

9.2.5  Soft-Dollar Arrangements

Broker-dealers may offer free access to soft-dollar benefits in the form of products to investment advisers who direct client transactions through those broker-dealers. These products are designed to help the adviser build the business or learn more about certain products. These benefits ultimately have a value and a cost for which an investment adviser did not have to pay out of pocket. That represents an incentive to choose one broker-dealer’s services over another’s services and, in turn, a conflict of interest, since the cost for those services is ultimately reflected in the commissions paid by the investment adviser’s clients.

To protect against abuse and conflicts of interest