The investment banks help public companies raise capital via an initial public offer to improve their market viability. Glass-Steagall Act prohibited financial and investment banks from providing certain services. The restriction was lifted in 1999, and investment and commercial banks were able to offer a range of services including commercial lending and retail brokerage (Maheshwari and al., 2002).
Morgan Stanley is a connected brokerage firm that offers investment banking and connectivity because of their vast financial resources. Large financial institutions can help people, corporations, and governments to raise money and manage it in order for them to reach their strategic objectives. Institutions with substantial financial resources enter the capital market, therefore attracting investors (Rugman & Verbeke, 2017). To demonstrate their reliability in retail and investment brokerage, large financial institutions leverage their global reach. The huge bank offers investment banking services as well as retail brokerage services through a network broker network. It also provides deposit services and services. The retail and investment brokerage services are provided by stockbrokers who charge fees for their service.
Retail services are offered by companies such as eTrade, Charles Schwab and others due to limited resources and business plans. Retail brokers give access to IPO loans and other financial resources on behalf of their clients (Rugman & Verbeke, 2017). Financial institutions such as eTrade encourage the trade of options and stocks by connecting buyers and sellers. Retail investing allows businesses to attract and target wealthy clients, while also allowing them to build a small business. The commission-based retail brokerage business earns commission and is sustainable on the commissions. These brokerage firms cater to wealthy individuals and are more popular than their competition.
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