Financial System and Intermediaries Assignment Example | Topics and Well Written Essays - 1000 words

Financial System and Intermediaries - appellative ExampleThis role is performed by intermediaries by taking the advantage of economies of scale while markets do the said(prenominal) by facilitating offer and trade of assets that comprise investors portfolios (Gup, 2011, Pg. 11)Financial intermediaries are the pecuniary institutions such as banks, construction societies, investment banks pension funds or insurance companies. Financial intermediaries include insurance companies that offer take chances investment, financial advisers who offer specialist advice saving the investor costs and metre in looking for the most suitable investment. Credit unions provide facilities for depositing and lending within a certain community and investment trusts or rough-cut funds that pool small nest egg of individual investors to alter a bigger investment trust. They enable small investors to enjoy smaller commission rates that are available on big purchases (Allen and Gale, 2001, Pg. 501). technical banks are intermediaries that issue among others savings account deposits. With a 100 000, the investor can open a savings account that will earn interest annually. They carry interest payments and offer time deposits. In this case, interests are earned with fixed terms to maturity (Gup, 2011, Pg. 47).Mutual funds raise funds through the gross revenue of shares to individuals as well as institutions. The shares are pooled to buy a diversified portfolio of bonds, stocks or both. A unwashed fund intermediary may keep some of the cash for other investment opportunities that may devolve up in the future (Gup, 2011, Pg. 82).An investor may also require an adviser as a financial intermediary to help in making the right choice of institution to invest with. Advisers spare investors time and resources that may be spent in the process of looking for a suitable investment bank, whole or institution (Gup, 2011, Pg 87).There are numerous banks in the UK that offer financial service s to quite a little all over the world. Barclays bank is