What is the main function of a brokerage?

The main function of a brokerage is to facilitate the buying and selling of securities for investors. Brokerages act as intermediaries between buyers and sellers in the financial markets, executing trades on behalf of their clients. This involves providing access to various financial instruments, including stocks, bonds, and mutual funds, allowing investors to build and manage their investment portfolios.

Brokerages may also offer additional services like research, market analysis, and investment advice, but their primary role remains the execution of trades, which is essential for market liquidity and efficiency. Through these transactions, investors can enter or exit positions in various securities, thus directly participating in the financial markets.

In contrast, managing mutual funds, offering investment banking services, and providing loans for purchasing real estate represent distinct functions that are not central to the core role of a brokerage. While some brokerages may have divisions that engage in these activities, they do not define the primary function of a brokerage.