Financial services is a broad term that encompasses many different types of professional firms that help consumers manage their finances. Some of these include credit unions, banks, credit-card companies, consumer-finance companies, and investment management firms. This sector of the economy is vital to everyone, and it’s important to understand how it works and what roles are available in this field.
The financial services industry includes all the activities that involve inflows and outflows of money. These include trading securities, borrowing and lending money, and facilitating mergers and acquisitions. This industry includes both private and public entities and is important to businesses and governments alike.
As such, it’s an excellent career choice for those who are interested in the business world and want to work in a highly specialized area. However, it’s important to remember that this is an extremely competitive field, and it can be challenging to break into the industry. Those who are looking to start their careers in this field should consider networking with those already working in the industry to increase their chances of getting a job.
In general, the four main categories of financial services are: consumer finance, insurance, capital markets, and wealth management. These categories are further broken down into a variety of sub-categories, including:
Consumer finance is the group that offers products like credit cards and mortgage lenders to individuals. It also includes companies that offer perks like travel rewards on credit card spending. One of the most prominent examples of a company in this category is American Express, which provides its customers with credit card and payment services that often come with various rewards.
Another important aspect of consumer finance is the insurance industry, which helps people cover expenses that they might not be able to afford on their own. Whether it’s health, life, or homeowners insurance, these are all considered financial services because they protect people against the loss of income due to illness or death, against property damage, or against liability. This category of financial services includes the agents and brokers who sell these policies as well as the underwriters who create them.
The capital markets sector of financial services includes stock and bond brokerages, hedge funds, and private equity firms. These are all forms of investing that are done in this industry, and they often involve large amounts of money being invested for long periods of time. It’s important to remember that not all investments are made wisely, and those who are seeking capital market careers should make sure they’re fully aware of the risks involved.
Finally, the wealth management category of financial services involves companies that provide advisory and consulting services to high-net worth individuals. These companies usually charge a fee for their services, which may include helping them to invest in real estate or other assets that have the potential to increase in value over time.
While most people think of financial services as a big-name industry that involves things like bankers and investors, the truth is that this is a huge industry that touches almost every aspect of our lives. It even includes community-based nonprofit ventures that offer counseling and money management advice.