Financial Services Industry Basics
The financial services industry plays a vital intermediary role in the world economy, moving funds from entities with excess funds to those with a need for funds. It includes firms that are engaged in activities such as investing, lending, insurance, securities trading and securities issuance. Its clients are individuals, businesses, nonprofit organizations and agencies of government.
Bank deposits provide the capital for bank loans.
The sale of stocks and bonds to investors supports the operations of businesses and governments. Insurance contracts help to pool and manage risks.
This is not an exhaustive list, but the financial services industry encompasses companies in one or more of the following lines of business:
- Banking
- Insurance
- Securities Brokerage (or Financial Advisory Services)
- Investment Banking
- Securities Trading
- Investment Management (or Money Management)
- Securities Analysis
- Financial Planning
- Wall Street
Also note that a broader definition of financial services can include employers and career paths in:
- Regulatory Agencies and Securities Exchanges
- Public Accounting Firms
- Financial Information Services
- Financial Consulting
Financial Management
When people discuss finance or financial careers, they might be referring to the financial services industry, or to the finance function that is common to all business enterprises, in every industry. Additionally, note that the finance function is itself one of many possible career paths within the financial services industry.The finance function and financial management encompass a variety of job categories. A common misconception is to equate these fields with accounting. In fact, degrees and/or professional certifications in accounting are not necessary for most jobs in financial management.
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