Financial services are everything that relates to money, whether it’s helping you get a mortgage or managing your debt. That includes depository institutions, providers of investment products, insurance companies and credit and financing organizations. And it doesn’t just apply to individuals; the industry provides small businesses, large corporations and nonprofits with the tools they need to manage their finances.
Banks, brokers and mortgage lenders are three of the most popular segments of this industry, but it is a broad sector that also includes many other types of professional firms. It’s important to understand how all of these sectors work together, and the roles they play in a person’s life to better serve them.
For example, personal finance services include debt resolution, which helps consumers who are in too much debt to pay off their loans and other outstanding balances without filing for bankruptcy. Asset management is another area of this sector, where pensions, mutual funds and other investments are handled. Global payment utilities are another component, involving the services that facilitate stock, derivative and commodity exchanges.
Sometimes, a company will merge its various financial service divisions into one conglomerate. A good example is the Berkshire Hathaway, the holding company of Warren Buffett, which owns GEICO, National Indemnity and General Re among other insurance companies. However, that type of integration is less common now than it used to be, and it is possible for a firm to acquire another business with its own brand while keeping them separate under the same umbrella.