When it comes to financial services, you probably think of banks, stock brokers and mortgage lenders. However, this vast industry also includes insurance agencies, investment firms, credit unions and nonprofit financial counselors. “Essentially, it’s any company or organization that handles money,” Duitch says. “That includes everything from hedge fund managers to small community banks and even nonprofits that offer counseling.”
Financial services include the provision of deposit-taking; lending of all types; financial leasing; payment system services; financial advisory and intermediation services, including credit reference and analysis, investment and wealth management, securities brokerage, asset management and custodial, depository and trust services. These services are available to individuals, small and large businesses as well as governments and other organizations.
In addition, there are many specialized financial services companies that assist people with debt resolution or that provide consumer finance counseling. Then there are those that offer asset management services, which include the selection and monitoring of investment portfolios to help people reach their financial goals. Lastly, there are those that provide risk management services, which include the selection of insurance coverage to protect people against risks like death or injury (e.g., life insurance and health insurance), property damage (e.g., homeowners and car insurance) and liability claims (e.g., legal defense in lawsuits).
Some people choose not to use financial services because they are uncomfortable with the potential for a loss or because of cultural or religious beliefs. Others may simply have no need for the services offered or have a close substitute.