What is an Investment Firm?

The term Investment Firm or Investment Company refers to a company that is principally engaged in investing in securities. “Securities,” in this context, means various forms of financial assets, such as stocks (shares) or bonds, that can be bought and sold.

The term may also refer to a company that specializes in managing money on behalf of individuals or institutions, that is, an asset management company.

An investment firm can help your money grow in the world of stocks, bonds, and other financial markets.

The European Banking Authority says the following about investment firms:

“Investment firms (authorized under the Markets in Financial Instruments Directive) provide a range of services and activities to investors in financial markets. These services are essential for the functioning of the financial markets and include, among others, the reception and transmission of orders, the provision of investment advice, discretionary portfolio management, and trading on own account.”


A wide range of services

Below is a list of the operations that investment firms could offer you. Each company may offer a different combination of these services, depending on its specializations:

  • Securities Trading

Buying and selling stocks, bonds, and other financial instruments on your behalf.

  • Portfolio Management

Managing your investment portfolio to meet your specific financial objectives.

  • Investment Advisory Services

Providing you with expert advice on investments and financial strategies.


Two images showing financial concepts, plus a definition of INVESTMENT FIRMS.
Image created by Market Business News.

  • Wealth Management

Comprehensive financial planning and investment management services, often for high-net-worth individuals (very rich people)

  • Research and Analysis

Offering in-depth market analysis and research to support investment decisions and strategies.

  • Asset Allocation

Helping you spread your investments into different types, like stocks, bonds, or real estate. the aim is to make your investments grow, taking into account your financial situation and risk tolerance.

  • Fund Management

Managing mutual funds or exchange-traded funds that pool investments from many individuals.

  • Risk Management

Looking at the potential risks that could affect your investments and taking steps to reduce those risks to help keep your investment’s value safe.

  • Retirement Planning

Helping you develop strategies for saving and investing for retirement.

  • Custodial Services

Safekeeping your financial assets and handling transaction settlements.


Investment firms, big and small

Investment firms can vary in size from small operations, potentially run by a single self-employed individual, to massive multibillion-dollar operations that employ thousands of people with offices across the world.

Below are the names of ten well-known financial firms based in North America and Europe:

  • BlackRock – Based in the U.S., (AUM): over $10 trillion.
  • Vanguard Group – Based in the U.S., AUM: more than $7 trillion​.​​
  • Fidelity Investments – Based in Boston, Massachusetts, AUM: $4.24 trillion.
  • State Street Global Advisors – Based in the U.S., AUM: around $3.6 trillion.
  • Morgan Stanley – Based in the U.S., AUM: $3.13 trillion.
  • JPMorgan Chase – Based in the U.S., AUM: approximately $3 trillio.
  • Goldman Sachs – Based in the U.S., AUM: around $2.67 trillion.
  • Credit Agricole – Based in France, AUM: $2.66 trillion​.
  • Allianz Group – Based in Germany, AUM: $2.36 trillion.
  • Legal & General Investment Management (LGIM) – Based in the U.K., AUM: $1.47 trillion​.

AUM stands for Assets Under Management.


Before Investing

Before choosing an investment firm, check their track record, fees, and whether their investment philosophy aligns with your own goals and risk tolerance.

Additionally, review customer testimonials and online feedback for a sense of the firm’s client service. Confirm their reputation with any industry awards or regulatory records. A firm should be transparent about its strategies and performance, and readily available to support you with advice and answers when needed.


Final Thoughts

If you’re looking to grow your savings, seeking financial guidance, or prefer professionals to handle your investments, an investment firm can offer the help you need.

No matter where you stand financially, how much risk you’re comfortable with, or what you aim to achieve, there’s a range of services tailored just for you out there.