Hard Dollars

AAA

DEFINITION of 'Hard Dollars'

Cash fees or payments made by an investor or customer to a brokerage firm in return for their services. Hard dollars differ from soft dollar payments because soft dollar payments are paid within the commission revenue from making trades or deducted from the value of any other transactions.

BREAKING DOWN 'Hard Dollars'

If an investor places a market order and pays the brokerage a $40 fee for that transaction, that is a hard dollar payment.


This term can also be referred to as money paid out to a travel agent by suppliers to counterbalance costs of marketing supplier products.

RELATED TERMS
  1. Commission

    A service charge assessed by a broker or investment advisor in ...
  2. Quid Pro Quo

    A Latin phrase meaning "something for something". This term is ...
  3. Proprietary Trading

    When a firm trades for direct gain instead of commission dollars. ...
  4. Broker

    1. An individual or firm that charges a fee or commission for ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Soft Dollars

    A means of paying brokerage firms for their services through ...
Related Articles
  1. Retirement

    The Hidden Costs Of Investing In Mutual Funds

    Find the hidden fees in your portfolio, so that you can increase your rate of return.
  2. Options & Futures

    Brokers: Do You Want To Sell Stocks Or Insurance?

    Know the difference between working as a broker or an insurance rep.
  3. Investing

    Fee-Based Brokerage: Will They Work For You?

    Learn the pros and cons of this type of investing and whether it will work for you.
  4. Options & Futures

    Don't Let Brokerage Fees Undermine Your Returns

    Smart investors don't give away more money than necessary in commissions and fees. Find out how to save.
  5. Insurance

    Full-Service Brokerage Or DIY?

    Determine what you are getting for your fees and commissions and how to get your money's worth.
  6. Options & Futures

    The Rap On Wrap Fees For Retirement Accounts

    If your retirement account is managed under a wrap fee program, you need to consider whether you should pay the fee out of your retirement account balance or out-of-pocket.
  7. Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.
  8. Investing Basics

    Explaining Front-End Load

    A front-end load is a commission or sales charge paid by the investor at the initial purchase of an investment.
  9. Retirement

    Advisors Fees: What Are You Paying For?

    Fees or commissions? Which is best? Either way, what matters most is that the investor is aware of each charge and how if impacts their portfolio.
  10. Mutual Funds & ETFs

    5 Disadvantages of Mutual Funds Compared to ETFs

    In the mutual funds vs. exchange-traded funds debate, ETFs have some clear advantages.
RELATED FAQS
  1. What are some mutual funds that do not have 12b-1 fees?

    Some of the most popular and best-performing mutual funds that do not include any 12b-1 fees in the expenses charged to fund ... Read Full Answer >>
  2. What action is the SEC likely to take on 12b-1 fees?

    The Securities and Exchange Commission (SEC) may take action to impose greater regulation on how 12b-1 fees are used, or ... Read Full Answer >>
  3. What is considered a reasonable 12b-1 fee?

    A reasonable 12b-1 fee is generally considered to be 0.25% of the assets of the mutual fund. The maximum amount allowed for ... Read Full Answer >>
  4. What is the 12b-1 fee meant to cover?

    A 12b-1 fee in a mutual fund is meant to cover the fees of companies and individuals through which investors of a fund buy ... Read Full Answer >>
  5. What happens when I want to sell my A-shares of a mutual fund?

    Typically, commissions or other sales charges may apply when a mutual fund is sold. This is an important factor in deciding ... Read Full Answer >>
  6. How can a mutual fund raise or lower its turnover ratio?

    A mutual fund manager can raise or lower the fund's turnover ratio by increasing or decreasing its level of trading activity ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  2. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  3. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  4. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  5. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  6. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!