The brokers we studied varied in size, type and insofar as they participated in soft dollar agreements. Most of the companies visited offered traditional order execution services for a large number of transactions and types of customers. Frequently, soft dollar agreements accounted for a relatively small share of these brokers` activities. Some of the trading brokers have not actively encouraged their soft dollar practices. They only entered into soft-dollar agreements as housing for established clients who applied for the agreements. Other broker dealers we studied were created for the sole purpose of participating in soft dollar agreements. For example, investment advisors can use all research materials obtained by soft dollars to use all their clients. Flexible dollar advocates say the abolition of this practice could hamper the research efforts of investment advisors and reduce their clients` returns. We found that 80% of the regulations analyzed were applied to research; 10% were in favour of enforcement assistance; 8% were for hybrid items; 2% were spent on non-research products and services. (Schedules C and D provide detailed information on the types of products acquired under these plans.) The average number of different products purchased with soft dollars was 29 per consultant over the course of ten months, with a range of 1 to 421. About 38% of the brokers we studied used either a catalogue or a list of products/services available for sweet dollars. The catalogues contain complete lists of all products/services offered by the broker, including product descriptions. Lists were generally not exhaustive, product descriptions were lacking.
About 22% of the brokers we studied had set up separate business units to manage the soft dollar agreements of companies. These services ranged from 2 to 17 employees, and many of these employees were identified as account agents. Staff mainly performed administrative and accounting tasks, such as commission tracking, credit authorization and monthly reporting. Other tasks included maintaining customer and supplier contracts, verifying product/service requests and assessing profitability. Of the remaining brokers, 23% were the only business activity to provide products and services under soft dollar agreements, and 55% used executives such as CEOs, DES CFOs and Comptrollers to monitor soft dollar agreements.