How do banks compare to traditional brokerage firms?

Banks and traditional brokerage firms both provide various financial services, but they do so in different ways. Banks historically focused on deposit accounts, loans, and basic financial products, but over time, they have expanded their offerings to include investment services, such as brokerage accounts, mutual funds, and financial planning services. This expansion means that banks now offer similar investment products and services as traditional brokerage firms, making them competitive in investment arenas.

While it’s true that traditional brokerage firms primarily focus on investment services, banks have also developed robust investment platforms to serve their customers’ needs for asset management and investment alongside their traditional banking functions. This capability allows clients the convenience of managing both their banking and investment activities under one roof, enhancing customer experience and access to financial resources.

The other options imply significant limitations on the services banks provide, which is not accurate given the evolving nature of financial institutions today. Banks do engage in loans, but they offer much more than that, including a wide range of investment services, thereby drawing a strong comparison to traditional brokerages.