Financial Supermarket

AAA

DEFINITION of 'Financial Supermarket'

An institution or company that offers a wide range of financial services under one roof. Financial supermarkets provide services which typically include banking, stock brokerage and insurance, and occasionally real-estate brokerage. The basic rationale behind the financial supermarket concept is to generate more fees per client and foster customer loyalty.

INVESTOPEDIA EXPLAINS 'Financial Supermarket'

While financial supermarkets may certainly offer convenience and efficiency to customers, they have not become dominant players in the financial services industry for a number of reasons. This is best exemplified by the retreat of Citibank since 2009 from its avowed objective of becoming a global financial supermarket.

Firstly, increasing government regulation in the wake of the 2008 global credit crunch may hamper merger attempts in the financial industry. Secondly, in challenging economic times, price-conscious customers are likely to shop around for the best deal - whether it is the lowest interest rate on a mortgage or the least amount of commissions charged for stock transactions - rather than pay a premium price for the sake of convenience. Finally, the establishment of the Internet as a medium of disintermediation for financial services is a potent threat to the consolidation activity that is required to form a financial supermarket.

RELATED TERMS
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which ...
  2. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  3. Full-Service Broker

    A broker that provides a large variety of services to its clients, ...
  4. Life Insurance

    A protection against the loss of income that would result if ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Discount Broker

    A stockbroker who carries out buy and sell orders at a reduced ...
Related Articles
  1. Brokers

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  2. Options & Futures

    Shopping For A Financial Advisor

    Finding your perfect advisor is as simple as shopping for a car. Read on to learn more.
  3. Brokers

    Uncovering The Securities Firm

    Learn about the various departments of a securities firm and the professionals who make it work.
  4. Options & Futures

    Brokers and Online Trading

    How do you find the right broker for your investment needs? Start by reading our broker tutorial.
  5. Personal Finance

    4 Tips To Cut Your Monthly Bank Fees

    We asked banking professions to share their biggest tips for tackling bank fees, and hopefully save more even before spring hits.
  6. Entrepreneurship

    JPMorgan vs. Goldman Sachs: A Tale of Two Stocks

    The performance of JPMorgan and Goldman has been impressive, but one has a slight edge.
  7. Stock Analysis

    How Citigroup Ensured That It's Too Big to Fail

    As a business, Citi has everything going for it. Scale, operational breadth...and the ear of key policymakers.
  8. Economics

    Mitigation Trade: Making Up For Environmental Harm

    Mitigation banking is a system by means of which the liability of ecological damage is transferred from the permittee to the mitigation banker through a system of credits and debits under regulatory ...
  9. Personal Finance

    What's a Bank Draft?

    A bank draft is a type of check. The bank guarantees payment, making it a more attractive option for the check recipient.
  10. Personal Finance

    Overdrafting

    An overdraft occurs when money is withdrawn from a bank account in an amount that exceeds the funds available in the account. Banks often permit this as a form of short-term loan to the account ...

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center