Sell side is a term used in the financial services industry which indicates a firm that sells investment services to asset management firms, like buy side, or corporate entities. These services encompass a broad range of activities, including broking/dealing, investment banking, advisory functions, and investment research.
In the capacity of a broker-dealer, "sell side" refers to firms that take orders from buy side firms and then "work" the orders. This is typically achieved by splitting them into smaller orders which are then sent directly to an exchange or to other firms. Sell side firms are intermediaries whose task is to sell securities to investors (usually the buy side i.e. investing institutions such as mutual funds, pension funds and insurance firms).
Sell side firms are paid through commissions charged on the sales price of the stock. Sell side firms employ research analysts, traders and salespeople who collectively strive to generate ideas and execute trades for Buy side firms, enticing them to do business. Part of the research analyst's job includes publishing research reports on public companies, these reports analyze their business and provide recommendations on the purchase or sale of the stock.
Difference between Sell Side and Buy-Side firms
The "buy side" refers to firms that invest money or 'buy' securities and "sell side" refers to the investment banks that provide the buy side firms with products and services such as initial public offerings (IPO's), secondary offerings, trading, research, conferences, etc
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