In the days before brokerage firms, mutual funds, insurance companies, and other financial service companies invaded their turf, banks were seen as the main source of good financial advice in most towns. Your friendly banker would not only help you get a loan, he or she would guide you to the highest yielding certificates of deposit (CDs) and money-market accounts and even offer some basic financial planning.
The intense competition for your investment dollars and financial planning business long ago destroyed the bank’s local monopoly. Today, most consumers see banks as transaction-oriented institutions. You use the bank to get cash, to make deposits to savings accounts and CDs, to obtain checking accounts for paying bills, and to assume a variety of loans, from overdraft protection to mortgages.However, banks are catching up with their competition quickly. Banks have seen the future and realize that if they can’t fight the competition successfully, they may as well join it. Most larger institutions now offer a full family of name-brand mutual funds, as well as a discount brokerage operation to buy and sell individual stocks. Some banks sell annuities from major life insurance companies. Many banks offer rudimentary financial planning services as well.