Eric is looking for a place to deposit a $30,000 inheritance from his Great Aunt Clementine, who passed away three months ago. He is not planning to spend his money fast and frivolously. He will need part of the funds from time to time for his college education, which he promised his aunt. After speaking with several sales consultants in banking and nonbank institutions, he likes the fact that he can open a stock brokerage account and a money-market account at Securitas Investment Company (a nonbank company), and will be issued checks for paying bills. You remind him that with the recent mergers between banking and nonbank institutions, he may be able to find a company that provides both the convenience of banking services and low-risk/high-risk securities products.

Question

Quizplus · Accepted Answer

Traditionally, brokerage firms did not offer cash deposit services. Their physical facilities did not have vaults, nor were they members of the Federal Reserve System. Due to changes in regulations, the financial services industry and the banking industry began to offer similar products and services. After the recent recession that affected both, some banks acquired financial services companies. Now, financial services companies have subsidiaries where they can link customers to the few banking services that they did not offer a few years ago. It makes for one-stop shopping for the customer.

Eric Is Looking for a Place to Deposit a $30,000