A "soft dollar benefit" is an extra bonus given to an adviser that is not in the form of cash. I value being able to lawfully call myself an "independent adviser" above all soft dollar benefits and it is my deliberate policy to avoid any conflict of interest that may arise, or be seen to arise, from recommending any investment that could lead to my receiving a soft dollar benefit.

Available benefits to advisers include financial planning software (provided free to advisers meeting sales targets), subsidies for office expenses and marketing, seminars, access to technical assistance and free options or shares in the fund manager's company for the adviser recommending that product.

Some seminars are open to any licensed adviser, others are invitation only and to get an invite the adviser needs to place a minimum amount of business with that manager.

I attend the former types of seminar all the time, they frequently have valuable technical information and it is of course always important for a financial planner to keep up to speed with new products appearing on the market. None of the managers I use to any great extent put on invitation only seminars, but if I am ever in any danger of qualifying for one I will fully disclose this fact to my clients.

Other common soft dollar benefits include help with marketing, for example providing a venue and advertising for me to run a seminar or other function. If such a benefit is possible I will disclose this to my clients, but at the same time since I do not wish to be seen to have any kind of affiliation with any fund manager I would not wish to receive such a benefit anyway.

If an adviser wants to take advantage of them, there are tremendous freebies to be had if you really want to stick your snout in the trough. Free tickets to major sporting events, expensive meals at high quality hotels and restaurant meals, "professional development" conferences held at tropical resorts, all expenses paid golf days, all night booze cruises charged to a fund manager's credit card, the list goes on and on and I must admit when I first came into the industry I was pretty disgusted by it all.

Of course there is nothing illegal about these kinds of benefits, and one might argue that these are genuine business expenses paid for by fund managers trying to market their product. Nevertheless, I can't help thinking that most advisers are well paid enough already that they don't need these kinds of benefits, and the best thing to do would be for managed funds to concentrate on reducing their fees. I personally give all the support I can to low cost fund managers and wrap/master trust providers, and I would urge anyone reading this to pressure their existing advisers to do the same.

Options and equity are a major benefit that I wish to stay right away from. Some master trusts and fund managers reward advisers by issuing them with options or shares in the master trust or fund management business themselves, which gives the adviser further incentives to recommend that product again as the profits partially come back to him as dividends and capital growth in these shares. I've seen variations on this, with master trust operators offering to be guaranteed "buyers of last resort", which means if the adviser uses that master trust, when the adviser retires the master trust provider guarantees that they will buy the adviser's clients if no other buyer comes forward.

I select master trusts and wrap accounts for my clients to a large extent on the basis of their low fees, none of the products I use offer any sort of equity deal, and if any of them do start to offer such a benefit in the future I will rebate the cash value of these to clients against their management fees.