11 Types of Financial Services and Institutions

The term “financial services” comprises many different things. There are a plethora of opportunities in the financial sector for candidates to find the right fit. From banking to investments and beyond, the options are vast and varied. 

So if you are considering a career in financial services, you first need to get an idea of the industry’s scope in order to decide which path best suits you and your skills. 

Here are the main types of financial services for you to consider:

1. Banking

Banking includes handing deposits into checking and savings accounts, as well as lending money to customers. About 10% of the money deposited into banks must stay on hand, as dictated by the Federal Deposit Insurance Corporation (FDIC) reserve requirement. The other 90% is available for loans. Some of the interest the bank earns from these loans is given to the customers who have deposited money into the bank.

2. Advisory

This branch of financial services helps both people and organizations with a variety of tasks. Financial advisors can help with due diligence on investments, provide valuation services for businesses, aid in real estate endeavors, and more. In each case, advisors help guide people in the right direction when making financial decisions.

3. Wealth Management

This type of financial service helps people save money intelligently and receive a return on their investment when possible. If you have a 401(k) program through your employer, that is one type of wealth management.

4. Mutual Funds

Mutual fund institutions offer a type of investment that multiple parties share in. These investments are managed by a professional, not the investors themselves. The buy-in for a mutual fund is not quite as large as some traditional investments in bonds or stocks, making them a popular option for investors looking to diversify risk.

5. Insurance

This is one of the more common areas in financial services. Most people have some understanding of insurance; it is a system that you pay into monthly or annually which acts as a safety net and covers costs of major expenses that are often unforeseen. There are many kinds of insurance, including health, auto, home, renters, and life insurance.

Financial Services Institutions

If you want to work in this industry, you need to research and understand not only the different kinds of financial services, but also the different kinds of financial services institutions. Below are just a few examples of institutions that offer the services described above.

• Commercial Banks (Banking)
• Investment Banks (Wealth Management)
• Insurance Companies (Insurance)
• Brokerage Firms (Advisory)
• Planning Firms (Wealth Management, Advisory)
• CPA Firms (Wealth Management, Advisory)

Looking to build your career in financial services? Explore our Banking & Financial Services jobs to see current opportunities.

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