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Advisors and hedge and mutual funds have the option to offset the costs of approved research products and services using soft dollars. Once you have requested soft dollars via Account Management and defined the commission tiers, you can select the commission tier on a per-trade basis from within
Soft dollar commission tiers can be selected from the Misc tab of the order ticket, or from the Soft Dollars order field directly from an order row using the drop-down list.
To display the Soft Dollars field
The Soft Dollars field is displayed to the left of the field you originally selected.
Note: Please note that this tier selection is used to calculate the total gross commissions, and the soft dollar disbursement amount is the remainder once all commissions have been deducted.
Let's look at a simple example on a stock order using the Fixed Rate commission structure. On the above order for 1000 shares with Tier 5 selected, total client commissions would be 1000 (shares) x 0.05 (tier rate) = $50.00. The Fixed Rate commission on this order ($.005/share) is 1000 x .005 = $5.00. The soft dollar amount would be equal to $45.00 for this order.
To choose a commission tier for an order
Note: If you do not select a tier for an order, no soft dollar markup is applied. There is no default value.