1. Copyright © 2009–2011 National Academy Foundation. All rights reserved. Unit 1, Lesson 2 Financial Services Industry AOF Principles of Finance

2. What do we mean by financial services? The term financial services refers to: Institutions that deal with the management of money The services that these institutions provide The financial services industry helps individuals, businesses, and governments all manage their money. In what ways does the financial services industry help people manage their money?

3. What institutions provide these services? The most common institutions that provide financial services include: Banks Credit unions Savings and loans Insurance companies Other types include advisory services, credit card companies, investment banks, stock brokerages, and many more! What financial services have you utilized?

4. Many different financial services are available A wide variety of financial services are offered. Some of the most common include: Checking and savings accounts ATM and debit cards Money market accounts Certificates of deposit Loans (home, auto, business) Credit cards Mutual funds and other securities What information would you want to know before you opened a checking account?

5. Banks match borrowers and lenders Banks typically fall into two categories. The most common are commercial and investment banks. Banks provide many different services to their customers. The most common are: Depository services Lending services Can you name any of the banks in your area?

6. Thrifts and credit unions: What’s the difference? Aside from banks, some of the other more common financial institutions include: Savings and loans/thrifts Credit unions Insurance companies Each started as meeting the needs of services that were not covered by commercial banks. Why would you choose a credit union or a savings and loan over a bank?

7. Insurance: Protect yourself! Insurance protects you from unexpected losses. Insurance doesn’t protect you from the risk itself, but provides you with financial coverage should the loss occur. These services cover a number of risks that are most commonly related to an individual’s life and property. Some insurance companies even offer typical banking services like mortgage and auto loan needs. What types of insurance do you think are the most important to have?

8. Financial services and society Channels financial resources to their most productive uses Increases individual wealth Promotes saving Attracts the financial resources that promote lending In what ways can the health of the financial services industry reflect an individual’s financial health? The financial services industry is critical to the overall health of our economy because it: