What is a common activity performed by broker-dealers in relation to mutual funds?

Broker-dealers play a significant role in the mutual fund industry, and one of their primary activities is managing direct sales to retail investors. This involves facilitating the purchase and sale of mutual fund shares to individual investors. Broker-dealers act as intermediaries, providing access to various mutual funds offered by different fund companies and helping clients navigate their investment options.

When broker-dealers engage in direct sales, they often share crucial information about the funds—including performance history, fees, and the investment objectives of different mutual funds—making it easier for retail investors to make informed decisions. This accessibility is particularly important for individual investors who may not have the same level of knowledge or resources as institutional investors. By managing these direct sales, broker-dealers enhance the distribution of mutual fund products, thus playing a critical role in the growth of the investment landscape.

Understanding the responsibilities of broker-dealers illustrates their function in connecting mutual funds to individual investors, a central aspect of the financial services industry.