Soft Dollars

I didn't do any study today, but I thought I would mention an interesting point I studied the other day. In the standards of professional conduct, standard III(a) is concerned with loyalty, prudence and care, and how these must be exercised when dealing with your clients. One of the conflicts which may arise are "soft dollars." Soft dollars are costs which are hidden in transaction fees, so the secondary item is never itemised. An example is when an investment manager pays brokerage for the acquisition of shares, he may also want a report from the broker. Instead of paying for the report separately, the manager pays a 'little extra' for the brokerage and gets the report with it.
The conflict which may arise is the client paying for the brokerage may not benefit from the report. If the manager pays more for the brokerage without a corresponding benefit to the client, he violates the standard. Of course, if the report is purchased for the client's benefit, he is not violating the standard, but he should disclose this purchase to the client.

Have I got this right? Or do I need to go over it more? I should probably do some questions, but I'm saving them for the end of the week.

213 days until the level 1 exam.