Definition: Financial Market refers to a marketplace, where creation and trading of financial

assets, such as shares, debentures, bonds, derivatives, currencies, etc. take place. It plays a
crucial role in allocating limited resources, in the country’s economy. It acts as an intermediary
between the savers and investors by mobilising funds between them.
The financial market provides a platform to the buyers and sellers, to meet, for trading assets at
a price determined by the demand and supply forces.

11 Types of Financial Services and Institutions

The term “financial services” comprises many different things. There are a plethora of opportunities
in the financial sector for candidates to find the right fit. From banking to investments and beyond,
the options are vast and varied.

So if you are considering a career in financial services, you first need to get an idea of the industry’s
scope in order to decide which path best suits you and your skills.

Here are the main types of financial services for you to consider:

1. Banking
Banking includes handing deposits into checking and savings accounts, as well as lending money to
customers. About 10% of the money deposited into banks must stay on hand, as dictated by
the Federal Deposit Insurance Corporation’s (FDIC) reserve requirement. The other 90% is available
for loans. Some of the interest the bank earns from these loans is given to the customers who have
deposited money into the bank.

2. Advisory
Expert advisory services help both people and organizations with a variety of tasks. Financial
advisors can help with due diligence on investments, provide valuation services for businesses, aid
in real estate endeavors, and more. In each case, advisors help to guide people in the right direction
when making financial decisions.
3. Wealth Management
This type of financial service helps people to save money intelligently, and receive a return on their
investment when possible. If you have a 401K program through your employer, that is one type of
wealth management.

4. Mutual Funds
Mutual funds institutions offer a type of investment that multiple parties share in. These investments
are managed by a professional, not the investors themselves. The buy-in for a mutual fund is not
quite as large as some traditional investments in bonds, the stock market, or the like, so they are a
popular option for people who are a little hesitant with their finances. The investments are also
diversified, which helps to mitigate risk.

5. Insurance
Most people have some understanding of insurance; it is a system that you pay into monthly or
annually which acts as a safety net and covers costs of some large expenditures which are often
unforeseen. There are many kinds of insurance: health, auto, home, renters, and life insurance, just to
name a few.
If you want to work in this industry, you need to research and understand not only the different kinds
of financial services, but also the different kinds of financial services institutions. Below are just a
few kinds of institutions that offer the aforementioned services.

6. Commercial Banks (Banking)

They are also known as retail banks. These types of banks are extremely important as they
manage money for individuals and small businesses. Apart from withdrawal and deposits,
these banks are also allowed to provide short term loans to individuals and small
enterprises. Customers can perform most of the fundamental banking activities in these
banks. The top commercial and retail banks of India are State Bank of India, ICICI Bank,
HDFC Bank, and Axis Bank.

7. Investment Banks (Wealth management)

These banks are essential to the functioning of big corporations, big enterprises,
government, and other entities. These banks act as a financial intermediary and provide a
variety of services for the large industries. Some of the most reliable investment banks are
JP Morgan, Citigroup, Bank of America, Deutsche Bank, and Barclays.
8. Insurance Companies (Insurance)
Insurance is a means of protection from financial loss. It is a form of risk management,
primarily used to hedge against the risk of a contingent or uncertain loss.
An entity which provides insurance is known as an insurer, insurance company, insurance
carrier or underwriter. A person or entity who buys insurance is known as an insured or as a
policyholder. The insurance transaction involves the insured assuming a guaranteed and
known relatively small loss in the form of payment to the insurer in exchange for the
insurer's promise to compensate the insured in the event of a covered loss. The loss may or
may not be financial, but it must be reducible to financial terms, and usually involves
something in which the insured has an insurable interest established by ownership,
possession, or pre-existing relationship.
The insured receives a contract, called the insurance policy, which details the conditions
and circumstances under which the insurer will compensate the insured. The amount of
money charged by the insurer to the policyholder for the coverage set forth in the insurance
policy is called the premium. If the insured experiences a loss which is potentially covered
by the insurance policy, the insured submits a claim to the insurer for processing by
a claims adjuster. The insurer may hedge its own risk by taking out reinsurance, whereby
another insurance company agrees to carry some of the risk, especially if the primary
insurer deems the risk too large for it to carry

9. Brokerage Firms (Advisory)

A brokerage company’s main duty is to act as a middleman that connects buyers and sellers
to facilitate a transaction. Brokerage companies typically receive compensation by means of
a commission (either a flat fee or a percentage of the amount of the transaction) once the
transaction has successfully completed. For example, when a trade order for a stock is
executed, an investor pays a transaction fee for the brokerage company's efforts to
complete the trade.
The real estate industry also functions using a brokerage company format, as it is
customary for real estate brokers to collaborate, with each company representing one party
of the transaction to make a sale. In this case, both brokerage companies divide the
commission.
A brokerage company may also be called a brokerage firm, or simply a brokerage

10. Planning Firms (Wealth management, Advisory)

Planning is the process of thinking about the activities required to achieve a desired goal. It

is the first and foremost activity to achieve desired results. It involves the creation and
maintenance of a plan, such as psychological aspects that require conceptual skills. There
are even a couple of tests to measure someone’s capability of planning well. As such,
planning is a fundamental property of intelligent behavior. An important further meaning,
often just called "planning" is the legal context of permitted building developments

11. CPA Firms (Wealth management, Advisory)

Certified Public Accountant (CPA) is the title of qualified accountants.In the United States,
the CPA is a license to provide accounting services to the public.
The CPA Council of India (CPA India) is a constituent unit of the ICFAI University
established for the development and regulation of the CPA profession on sound ethical
lines. All students who successfully complete the CPA Program are eligible to become
members of the CPA Council and are required to adhere to the Code of Ethics and
Standards of Professional Conduct, as prescribed by the CPA Council from time to time.