ethic: client direct brokerage benefit, generated, account, direct

hw0799

soft dollar generate from client directed brokerage could benefit other client, but soft dollar generated from non-client directed brokerage could not benefit client directed brokerage account? is that right? Thanks.

sameeragarwal

Is there any soft dollar under client directed brokerage? I don't think so.

thecfawannabe

All the CFAI text says is that the brokerage from another client account should not be used to pay for services under client directed brokerage. It doesn't say anything about the soft dollars generated from client directed brokerage, or if they are even generated. It could be very possible that client directed brokerage can generate soft dollars. In that case i think it will be safe to assume that these cannot be used for other client accounts as well. Anyone else has any thoughts on this?

firat

I think if it is generated, It can be used for other client accounts, as long it benefited the client's account.

yospaghetti

It all depends on what the purpose is for the client directing the brokerage. Sometimes they have certain mandates to meet and you trade a certain % through those brokers, which may or may not offer research, etc. Very rare to have client directed brokerage result in soft for a manager

President1988

I agree, don't think too much about this issue, better to remember other topics.

RepoToronto

I noticed that too and was curious that it is one direction only.

Oddly, in practice, there's no real way to control this. A large cap manager is going to utilize all research for all large cap accounts. If one of those accounts happens to be with client directed brokerage, the knowledge gained on the other accounts will spill over.

- Robert