Soft Dollars...........

At Chippewa Partners we have never allowed the use of soft dollars to pay for investment services. Never will. Another word for "soft dollars" is theft. Plain and simple. Trading to generate payments for services rendered with client assets should be stopped. Will it happen? Not a chance. Wall Street makes too much money in soft dollar payments. Money managers, including mutual funds and hedge funds, often pay Wall Street with “soft dollars” — inflated commissions that include the cost of trading (typically 1 to 2 cents a share) plus an additional few cents a share that can be directed to pay for research and other services. Soft dollars are controversial because clients pay for the higher commissions, while the services often benefit the manager the most. Higher commissions result in greater expenses for the fund and potentially lower returns for investors. In the late 1990s, the Securities and Exchange Commission cracked down on the use of soft dollars by mutual funds, concerned that investors were being duped into paying for services enjoyed by the manager. Massachusetts is now investigating whether hedge funds are improperly using soft dollars to pay for space in these hotels and failing to disclose to investors that they are covering a major expense.