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.
