FINANCIAL SERVICE

The Financial Service in United States

The Financial Service in United States

Introduction

The financial services industry encompasses a wide range of organizations that deal with money management. Among these organizations are banks, insurance companies, consumer finance companies, stock brokerage, credit card companies, investment funds and some government sponsored enterprises. As of 2007, the financial services industry represented 24% of market capitalization of S&P 500 in the United States. 

It includes businesses that operate in banks, insurance, tax preparation, financing for real estate and those having to do with investment and financial management.

As a group, in 2006, these industries accounted business with 132.000 9.800 jobs created, almost 6% of all jobs created in Missouri. Throughout the state, these companies are enjoying increased profits, growth of industry as well as higher average salaries ($ 52,000 USD). This relationship has been so profitable that the cause of Missouri became one of the leaders in financial services in the United States. It is expected that this trend will continue in the future and with the help of business consolidation and automation of the labor force, economic growth is greater. (Lannon, 2009)

Industry Trends

An important subset of the financial services industry is the investment and financing. In principle, these companies are committed to managing funds and accounts compound interest and provision of loan services to individuals and companies. By itself, this sub-group totals 1.6% of total jobs created in Missouri with an average salary above $ 66.000 U.S. dollars. Missouri enjoys a growing presence of these industries in terms of employment, which grew almost 16.5% in the last five years. This is due in part to its solid base of securities brokerage, investment companies and credit and less restrictive laws regarding financial activities. (Harrison, 2005)

Edward Jones and & Co.

The financial services industry was built on the foundation of high risk and higher return. The concept of personal investment has long excluded the everyman because of the enormous wealth and risk it requires. Edward Jones built its competitive advantage on the premise of offering financial services that could provide for the needs of the middle class. Edward Jones offers a wide range of financial services - savings, stocks, bonds, and financial planning services -- that are aimed at individual investors who are risk averse and money conscious. The company generates huge profits by helping people make long-term investment decisions to promote financial stability and achieve modest, risk-regulated returns. Discovering a niche for the money conscious has served Edward Jones well: they now have more than seven million clients and 10,000 offices spanning two continents. Hoover's remarked on the rapid expansion of Edward Jones, saying “Other financial firms may try to expand their presence, but it's going to be difficult to keep up with the Joneses.” (Berger, 2008)

Competition Edward Jones faces three main competitors in today's market: Charles Schwab, Raymond James & Associates, and Wachovia Securities (Hoover's). Edward Jones operates primarily as a brokerage, but like its competitors also offers a host of financial packages to satisfy its consumer base. According to Hoover's, Charles Schwab offers “private banking, bond trading, annuities, and proprietary Schwab and Laudus mutual funds, as well ...