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.

BREAKING DOWN '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. Brokerage Account

    An arrangement between an investor and a licensed brokerage firm ...
  2. Retail Banking

    Typical mass-market banking in which individual customers use ...
  3. Relationship Banking

    A strategy used by banks to enhance their profitability. They ...
  4. Financial Sector

    A category of stocks containing firms that provide financial ...
  5. Asset Management

    1. The management of a client's investments by a financial services ...
  6. Customer Service

    The process of ensuring customer satisfaction with a product ...
Related Articles
  1. Investing

    Grocery Wars: Who Will Win in 5 Years?

    Grocery stores have been slowly transitioning to become the kind of grocery stores that Millennials want and need.
  2. Investing

    What's a Brokerage Account?

    A brokerage account is a contractual arrangement between an investor and a licensed securities broker or brokerage.
  3. Investing

    The Globalization Of Financial Services

    The key to survival for many financial institutions will be to efficiently serve a global customer base.
  4. Financial Advisor

    Understanding Brokerage Fees

    Agents charge brokerage fees for facilitating transactions between buyers and sellers.
  5. Investing

    Can Partnerships Improve Whole Foods Profits? (WFM, KR)

    Shares of Whole Foods Markets (NASDAQ: WFM) have lost a third of their value year-to-date as investors question whether the organic grocer can withstand the onslaught of competition from mass ...
  6. Investing

    The Delhaize/Ahold Merger: A Buy for Investors?

    The mid-2016 merger of Delhaize Group and Ahold NV will create a supermarket giant, but what will it mean from an investing perspective?
  7. Personal Finance

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  8. Small Business

    HowGood: How it Works and Makes Money

    Learn more about Howgood and its efforts to inform consumers about sustainable food options through a proprietary supermarket labeling system.
  9. Investing

    What is a Prime Brokerage?

    A prime brokerage offers special services to certain clients.
  10. Financial Advisor

    Why the Financial Industry is Still Broken

    Most financial professionals are good people, but the U.S. financial system is set up in a way that doesn’t typically place clients' best interests first.
RELATED FAQS
  1. What is the 12b-1 fee meant to cover?

    Understand what a 12b-1 fee is and what it's meant to cover. Learn about how the fee works and what personal investors should ... Read Answer >>
  2. What is the financial services sector?

    Go beyond banks and credit unions to learn about the diverse group of companies that make up the fast-growing financial services ... Read Answer >>
  3. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ... Read Answer >>
  4. What other sectors are most similar to banking?

    Learn valuable information about the many different subsectors in the financial services sector that most closely resemble ... Read Answer >>
  5. What other sectors are most similar to financial services?

    Learn about the various components of the financial services sector as the main economic area that allows countries to export ... Read Answer >>
Trading Center