The sell side consists of financial services firms such as broker-dealers, investment banks and market makers that offer securities and investment services to money managers working on behalf of pension funds, mutual funds and insurance companies, also known as the buy side. The sell side can offer a wide variety of financial instruments.
The sell side also provides buy-side firms with access to initial public offerings (IPOs) as well as various recommendations about the financial markets. In short, the sell side is responsible for generating and executing trades and providing investment ideas to the buy side.
In particular, the sell side is involved with the research, analysis and promotion of securities. The sell side has analysts that conduct research on potential investment opportunities and then make recommendations to buy, sell, or hold securities. If a buy-side firm decides to invest in a sell-side opportunity, the sell-side firm makes a commission by completing the transaction.