What are Hard Dollars?
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 Do Hard Dollars Work?
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 Do Hard Dollars Matter?
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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