Soft dollars

Benefits that a brokerage gives to an investment manager for directing trades to them.

There are issues with receiving soft dollars as an investment manager.  Firstly, duty of loyalty, prudence and care for client implies that the investment manager should be seeking the best price and best execution.   Choosing a more expensive broker in return for soft dollars is a violation if the soft dollars do not benefit the client.  

However, it is not a violation if the soft dollars is beneficial for the client, like some useful research reports which can help enhance the returns of the portfolio.

In essence, receiving soft dollars is ok if they are used to benefit the client.  However, if the client is paying a higher brokerage fee in return for soft dollars, it must be made known to the client.