Question

A broker-dealer is looking to expand its business. In an attempt to lure the business of a prominent local investment adviser representative (IAR), it offers the IAR several of its services allowing them to be paid for by soft dollars. Which of the following would be an inappropriate soft dollar arrangement?

[A] The offer of market quotes performed in real time
[B] The offer of the use of asset allocation software that has been customized for the application
[C] The offer of subscriptions to the broker-dealer's research reports
[D] The offer of paying the salary for the services of an analyst from the research department.

Answer 1

The correct option is D

Step-by-step explanation:

Soft dollars refers to payments made by mutual funds as well as other managers to their service providers. Instead of payment by hard currency the mutual fund will pay in kind by passing on business to the brokerage.