Some fund managers have programs where advisers may win a prize of some sort for writing huge amounts of business with them. Advisers that sell the most of any particular fund might win a Harley Davidson motorcycle, or a trip to Fiji, or a computer, or cash or something along those lines. Needless to say, winning these prizes requires a heavy marketing campaign by "advisers" to "clients".

I consider this to be one of the worst kinds of soft dollar benefit because in order to win such a contest an adviser would have to suddenly direct huge amounts of business through to that one fund manager. One can just imagine how this works out in real life, advisers calling up clients telling them there is something drastically wrong with one of their funds and it needs to be switched, or getting them to gear themselves to the eyeballs to buy as much of this superb fund as possible. Suddenly portfolio reviews cease to be about management for the client's benefit and end up being an opportunity for advisers to compete for a prize. One could not get much further from being an impartial, independent adviser.

I think it is terrible that "advisers" might deliberately try to win contests such as these, it is clear that an investor's best choice will only rarely be the fund that is offering free motorcycles. Nevertheless, these contests are very popular with advisers, and a suitably desirable prize nearly always creates huge amounts of business for the fund - which is why fund managers run them.

I do not expect to ever write the level of business with any fund manager that practices this to put me in the running for one of these contests, but if such a prize is on offer I will disclose this to my clients. I will not deliberately modify my regular investment program in the hope of qualifying for a prize. Fortunately, none of the funds I ever use offer these sorts of promotions, I use them because they have low costs, and they have low costs because they don't spend enormous amounts of money on marketing activities like this.