Securities firms, such as Goldman Sachs, do Wall Street work. They sell new issues of stocks and bonds for companies that want to raise money. They also advise companies on mergers and acquisitions. For this work, they earn millions of dollars in fees.
Securities firms also provide stock brokerage services to individuals. In order to buy and sell stocks, you must hold a membership on the stock exchanges, so individuals need to go through brokers. Since there is so much competition for customers, securities firms have reduced the cost for trading stocks to zero, leading to an explosion of amateur stock pickers. We will discuss investing at length in a later chapter.