The financial sector is a vital part of any economy. It advances loans for businesses to expand, grants mortgages for people to buy homes and cars, and issues insurance policies to protect assets from loss or damage. It also helps individuals build savings for retirement and manage debt. Financial services are the backbone of a nation’s economic health, and their failure can have devastating effects on a country’s citizens.
Many people think of Wall Street when they hear the term “financial services.” However, the industry encompasses a much wider range of professional firms that provide financial management for both individuals and organizations. These include credit unions, banks, investment firms, credit-card companies, and more. These professionals help people make money by lending, saving, investing, and trading shares. Some of the most important jobs in the financial industry are those of accountants and financial advisers.
These professionals take a long-term view of their clients’ investments. They research the market to find the best opportunities and advise their clients on risk management. They often encourage clients to diversify their portfolios and are known for promoting from within based on merit, rather than tenure.
Banks may be where the money is, but they don’t keep it all in a vault. They lend it out to customers, charging them interest on the amount they borrow. This generates a significant portion of the sector’s income. The rest of its revenue comes from the redistribution of risk through insurance and the management of other financial assets like mutual funds and securities.