Hard Dollars
What It Is:
Hard dollars are money paid to a broker or investment adviser in return for consultation or investment research. Hard dollars do not include fees related to trading.
How It Works/Example:
For example, if someone wishes only to learn from a broker or adviser about options for retirement planning, the broker may charge a fee for an hour of consultation. This fee is an example of hard dollars. Hard dollars are the opposite of soft dollars.
Why It Matters:
Hard dollars compensate financial professionals for their time. They serve as an incentive to provide quality service that may later result in a sale of securities.
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Cached on May 23, 2012, 6:10 pm