Financial intermediaries are one of the main components of the financial system, and their activities in the financial market raise funds from a wide range of individual investors who do not have much investment value. However, by grouping these funds, they create great investment potential by investing in various forms of financial instruments. Due to the substantial number of participants in this process, it is extremely important to monitor the operations of financial intermediaries to warn off deviations from the regulations and irregularities in the work to prevent potential losses of funds. The major institutions in charge of this work in the Republic of Croatia are the Croatian National Bank and the Croatian Financial Services Supervisory Agency. Although the most wellknown financial intermediaries are banks, other forms of financial intermediaries such as insurance companies, pension and investment funds, whose role in the financial market is getting stronger, should not be underestimated. The paper investigates the role of financial intermediaries in the financial system of the Republic of Croatia with an emphasis on their role as institutional investors. The structure, assets and investment strategies of financial intermediaries in the period from 2016 to 2019 and the ways in which they contribute to the development of the financial market and the financial system as a whole are analyzed. The research showed that the structure of financial intermediaries has changed during the observed years and that insurance companies, UCITS funds, and especially pension funds have achieved an enviable position in the financial system based on rational investment decisions.