The financial services industry around employs thousands of people and is one of the most important sectors of the economy. In the US, the financial services sector represents over 20% of the market equity value of the the S&P 500.

Some of the main areas of activity in financial services are:

  • Investment Banking: banking services for companies and governments – including capital raising and buying and selling companies. This area of activity includes corporate finance and mergers and acquisitions (M&A)
  • Asset Management: managing money for a return on behalf of private customers, institutions or employees, through mutual funds, dedicated pension plan funds, private equity funds and hedge funds;
  • Sales & Trading: buying and selling stocks and bonds on behalf of clients or for a proprietary trading book. This area is often split into sales and trading of equity related products (incl. stocks), and sales and trading of fixed income products (incl. bonds);
  • Retail/Consumer Banking: banking services for private consumers - everything from savings and checking accounts to the provision of certain asset management services;
  • Securities Services: includes administering stock positions for asset managers, holding securities in custody, facilitating short selling by hedge funds;
  • Insurance Services: life insurance and products that can have an asset management element to them.

Larger financial services companies often play a role in more than one piece of the puzzle, and different firms emphasise different areas. Some of the firms that are active in these areas include:

  • Goldman Sachs: investment bank and asset manager, with a very strong presence in sales & trading and securities services. No retail presence other than dealing with high net worth individuals;
  • Fidelity Investments: one of the largest asset managers in the world;
  • Vanguard: one of the largest managers of index funds in the world. See also active versus passive management;
  • CitigroupInternational financial conglomerate with operations in consumer, corporate, investment banking and insurance: 
  • HSBCone of the largest banking and financial services organizations in the world with 10,000 offices in 83 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa;
  • UBS: one of the largest asset managers in the world, with a retail presence in Switzerland mainly, and active in all of the other areas; 
  • Bank of America Merrill Lynch: large commercial bank with Merrill Lynch as an integrated investment Bank like Goldman Sachs and active in most areas of banking: 

The firms differ in their strengths, focuses and also very importantly their cultures.

The financial services industry is characterised byinnovation. What a stock is, and how savers and users of capital interact, has and will always be largely the same; however, new products are also constantly being developed. For example, one of the largest new product areas in recent years is in the area of exchange traded funds or ETFs – funds that offer an exposure to a market or index, for example the S&P 500 in a tradable form that, effectively like a stock, that offer market exposure in a low cost manner (not unlike an index fund). Related to this is that the financial services industry is therefore also a great place to work for millions of people as it is fast-paced and performance oriented, and also offers good to great incomes for many.

Employers in the financial services area typically look for a number of characteristics in their employees:

  • A track record of success;
  • Motivation;
  • Willingness to work hard and perhaps travel;
  • Openness to new ideas;
  • A university degree – sometimes even advanced degrees.

Specific requirements and application details can all be found on the companies’ individual websites.