Financial services is a broad category that includes banks, brokers, mortgage lenders and insurance companies. However, the industry also includes many other sectors that provide financial services to a wide range of people and organizations.
Banks – Banking is the process of transferring funds from one person to another, either directly or through credit and debit cards. It is one of the most widely used services in the world.
Brokers – Buy and sell securities on behalf of their clients. Some offer investment advisory and wealth management services as well.
Private banking – Provides banking services to high-net-worth individuals and families. These firms often require a minimum net worth to qualify for their services.
Family office – These firms service wealthy individuals with personalized wealth management and retirement plans. This is similar to private banking, but the company does not handle all of the assets in a single account.
Advisory services – These are departments within a larger firm that service clients with financial advisers who act as both a broker and financial consultant.
Insurance underwriting – Personal lines insurance underwriters actually underwrite the policies that people purchase to protect themselves from disasters, like fire or theft. This industry is still very much a part of the financial services sector, though it is often marketed separately from banks and brokerages.
Financial services is an important economic activity, as it provides the financial resources that allow businesses to operate and produce goods or services. It also ensures that the tertiary sector grows and contributes to an economy’s development. The presence of financial services in an economy is a strong indicator that it is a prosperous country.