When you hear the term financial services, you might think of banks, mortgage lenders and insurance companies. But these are just three of the many sectors that make up this enormous industry, which also includes brokerage firms, Wall Street, and a wide variety of other professionals who work to provide consumers, small businesses, large corporations, and even governments with the money they need for various purposes.
The types of financial services available to the public vary widely, but include such products as savings accounts; credit cards; loans (personal, business, mortgage); credit unions and credit cooperatives; securities brokers and dealers; investment funds; and any other firm engaged in financial intermediation. Intermediation involves channeling cash from savers to borrowers and redistributing risk. Banks do this by leveraging the deposits of millions of depositors so that they can afford to take on the risk of lending to many borrowers at once; securities firms add value to investments by buying and selling securities; and insurance companies pool the cash paid in by policy holders to pay out claims to those who suffer losses due to unforeseen events.
Consumers need financial services to manage their money and prepare for the future. The more people have control over their personal finances, the less likely they are to be devastated by unexpected events or to run into trouble with debt. Financial services also help individuals and families invest in homes, cars, education, and other assets, and protect their incomes with insurance policies. Businesses need financial services to grow and expand, and the health of the sector is a vital component of national and global economies.
One of the best ways to get into a career in financial services is through a referral from someone who already works in the industry. Other options include finding an entry-level position in an area of the industry that interests you and working your way up through the ranks, gaining more experience as you go. Many financial services companies emphasize employee growth and advancement, promoting from within based on merit rather than age or tenure.
Another good reason to consider a job in financial services is that this industry plays a vital role in everyone’s daily life. People who have control over their finances are more resilient when things go awry and are able to plan for the future, and businesses benefit from a healthy financial services sector that helps them manage risk and secure the capital they need to succeed.