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On Money Managers' Use Of Client Commissions For Fixed Income Securities Research, D. Bruce Johnsen
On Money Managers' Use Of Client Commissions For Fixed Income Securities Research, D. Bruce Johnsen
D. Bruce Johnsen
An increasingly important question is how money managers can best equip themselves with the investment research necessary to fulfill fiduciary obligations to their baby boom clients, who will inevitably shift from equities to fixed income securities as they near and enter retirement. Rather than reflecting a conflict of interest, this essay argues that managers' use of client commissions to pay for investment research, including fixed income research, is both legally permissible and in their account holders' best interest. For over three decades Section 28(e) of the Securities Exchange Act has given managers a safe harbor from fiduciary suits and other …