Basically, the role of financial companies is to offer wide ranging financial services to consumers but such companies play a significant role in developing the economy of any country. The kind of services such companies provide include private banking, insurance and stock broking etc. They mobilize funds of their patrons to offer them better returns in a reasonable amount of time. It is not difficult to understand that such companies encourage consumers to save and invest money to earn higher profits.
Different Types of Finance Companies
Investment banks play a very prominent role in financial world. The role of an investment banker is that of middleman who executes big financial deals involving exchange of shares and securities. While helping general investors buying stocks, they are instrumental in allowing medium or giant sized companies to raise capital by issuing fresh equity. Walls Fargo and JP Morgan Chase are among the investment banks renowned for managing wealth of retail and institutional investors.
Private Equity Firms
Transactions worth billions of dollars are executed by professionally managed private equity firms. The operation of such companies comprises of accessing wealthy investors and prompting them to invest their funds with them. They venture to invest the accumulated funds in privately held companies. The success of such companies depends on the acumen of financial analysts they employ. The job of an analysts is to assess the fundamentals of a company and the growth prospects it offers before investing funds therein.
Hedge funds are the funds wherein rich investors from all over the world put in their cash with the intention of deriving the most from it. Management of hedge funds is entrusted to proficient fund managers with vast experience. They have the support of many clients. Hedge funds in the US are governed by a number of rules and regulations, making it mandatory for them to generate some minimum income for their customers. As such, only the most talented financial experts are engaged for management of hedge funds.