Perspectives: The End of 'Soft Dollars'?

Posted: 10 Apr 2009

Date Written: April 9, 2009


Over the past few decades, mutual fund shareholders have paid to brokerage and investment banking firms billions of dollars in so-called soft-dollar commissions that have far exceeded the costs of executing the transactions. Over the years, the U.S. SEC's inconsistent interpretations of pertinent sections of the Securities Exchange Act of 1934 have generally allowed the continued use of soft dollars for the payment of not only brokerage commissions but also research products and services. This article discusses the history of the practice and suggests two approaches that may hasten the end of the era of soft dollars: client commission-sharing arrangements and paying for research directly in cash.

Keywords: Advocacy, Regulatory, and Legislative Issues: Advocacy Issues, Regulatory and Legislative Activities; Ethics and Professional Standards: Soft Dollar Standards and Issues

Suggested Citation

Bogle, John C., Perspectives: The End of 'Soft Dollars'? (April 9, 2009). Available at SSRN:

John C. Bogle (Contact Author)

The Vanguard Group ( email )

100 Vanguard Blvd.
Mailstop V-22
Malvern, PA 19355
United States
610-669-6323 (Phone)


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