AIM Steps Up Directed Brokerage Disclosure

AIM Investments has stepped up efforts to publicly disclose its directed brokerage activities and allocation of marketing fees. Newly drafted prospectus supplements filed with the SEC clearly outline the fund provider's intent to set non-binding sales goals with third-party brokerage firms and other potential investment distributors, a move lauded by shareholder advocates but implemented by very few asset managers.
Part of AIM's new efforts to shed light on its directed brokerage practices include acknowledgements of quid-pro-quo relationships based on "execution services" and "research services" provided by individual brokers. The new disclosures also make note of relationships that are potentially influenced by brokerage firms' recommendations to sell AIM's proprietary funds.
Separately, AIM now provides greater details about 0.25% annual "Sales-Based-Payments" for marketing support brokerage firms. Secrecy surrounding these types of payments has raised suspicions in recent months among regulators and shareholder advocates who are demanding more transparency into the widespread practice. AIM's new prospectus language potentially heads off criticism by outlining how these types of marketing payments, which are sometimes taken from its funds' assets, are calculated and subsequently applied toward a variety of expenses, including travel-related costs for applicable investment representatives. David Bachert, a spokesman, was not available for comment by press time.