The Different Types of Financial Services

Financial services

When it comes to your finances, there are a number of different professionals and companies that you might need to interact with. These include credit unions, banks, investment funds, financial advisory firms and Wall Street.

These services help individuals manage their money, save for a mortgage or other large purchase, invest in stocks, bonds and mutual funds and protect their property and health with insurance. They also assist small businesses with proper accounting services so that they can keep accurate records and thus pay less taxes.

Although it seems like the financial sector is all-encompassing today, this wasn’t always the case. Before the 1970s, each type of financial service had a more distinct focus. Banks focused on deposit-taking, loan associations concentrated on mortgages and loans, and brokerage firms primarily offered investments in stocks and other assets. But over time, these lines began to blur as companies merged and expanded their product offerings to cater to the needs of consumers.

Today, it’s not uncommon for a company that provides investment advice to offer debt resolution services as well. This is because the financial services industry is largely lifecycle-based. A good example is a consumer banking company that recognizes that its customers are getting married, moving or buying a house and prepares a relevant product or service for them in advance.

Other sectors of the financial services industry include asset management which deals with pensions, insurance assets and hedge funds. Custodial, depository and trust services are also part of this sector, as are payment and money transmission services.

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