Financial intermediaries act as a connecting link between people with excess capital to people in need of funds. The financial intermediary process creates an efficient marketplace and also lowers the cost of business.
For example- Banks provide financial institutions and connect them with borrowers and lenders.
Insurance companies provide insurance policy benefits to customers in return for the premium taken for policies.
A mutual fund is a prime type of financial intermediary that provides investors the facility to buy and sell mutual funds through a third-party stock exchange. Mutual Funds are categorized into three broad categories. They are mainly:
1) Equity or Growth Funds
2) Fixed Income Funds or Income or Bond
3) Hybrid Funds
A fund manager or a personal banker or a financial advisor connects with shareholders by purchasing stocks in companies that he predicts may outperform the market. The fund manager or a personal banker or a financial advisor provides the shareholders with assets, the companies with capital funds, and the market with liquidity by providing active management of capital.
Financial Intermediaries allow the investors to increase their finances which in return enable them to make larger investments. This benefits the investor as well as the financial institutions or entities in which they are investing. A financial intermediary reduces the risk by distributing funds across a varied range of investments opportunities. In finance, it is advised to not keep all the eggs in the same basket. A financial intermediary provides various cost-effective loan options that not only increase the purchasing power of the customer but also benefit the bank institutions or loan-providing institutions.
Wealthvault aims in providing the best financial advice, products, and services to our customers and business clients. We are reputed for providing the best financial intermediaries to our customers for working towards and providing them with the best financial solutions to fulfill those requirements. Customers are our priority and it is our pleasure to provide them with the best financial services. We at Wealthvault have good business relations with top financial institutions that cater to your financial goals, aspirations, and requirements.