The financial services industry is comprised of companies that help manage and grow savings and investments for individuals, organizations or companies. These functions are performed at commercial banks, securities firms, insurance companies and at diversified financial companies that offer a variety of products and services.

The top three commercial banks, according to Fortune magazine are Bank of America Corp. with more than $51 billion in revenue in 1999, followed by Chase Manhattan Corp. with $33.7 billion and Bank One Corp. with nearly $26 billion.  In the securities industry, brokerages Merrill Lynch & Co., Morgan Stanley Dean Witter and Goldman Sachs & Co. topped the list with $34.9 billion, $33.9 billion and $25.3 billion in revenue respectively in 1999.

In the publicly traded property and casualty insurance arena, American International Group, or AIG, tops the list with $40.7 billion in revenue. Next is Allstate Insurance Co. with $27 billion in revenue followed by Berkshire Hathaway Inc. with $24 billion in revenue, according to Fortune.

The top property-casualty mutual insurer, that is, companies whose structures make policyholders stakeholders in the company, is State Farm Insurance Cos. with $44.6 billion in sales, followed by Liberty Mutual Insurance Group with $15.5 billion and Auto-Owners Insurance Co. with $2.4 billion.

In the life and health insurance sector, the largest publicly traded company is Prudential Insurance Co. of America with more than $26 billion in revenue while Metropolitan Life Insurance Co. comes in at a close second with $25 billion in sales. American General Corp. rounds out the top three with more than $10 billion in revenue.  The biggest mutual insurer in the life and health area is TIAA-CREF with $39.4 billion in revenue. New York Life Insurance Co. is second with $21.7 billion in revenue and Northwestern Mutual Life Insurance Co. is third with $15.3 billion.

Excluding General Electric Co., which in addition to financial operations owns media and other operations, Citigroup Inc. leads diversified financial companies with $82 billion in revenue. Fannie Mae comes in second with $36.9 billion and Freddie Mac third with $24.2 billion, according to Fortune’s survey.

The economic boom in the late 1990s has made jobs in these types of companies plentiful. Finance, insurance and real estate represented 19.1% of U.S. gross domestic product (GDP), or more than $1.6 trillion in 1998, up from 18.8%, or more than $1.5 trillion a year earlier, according to the Bureau of Economic Analysis.

However, the 1999 signing by President Clinton of the Financial Modernization Act, which allows securities firms, banks and insurance companies to enter each other’s markets, is changing the industry’s landscape. For example, now that insurance companies can sell securities products, Allstate has begun selling mutual funds.           "That’s what people want," said Bill Howell, president of the Insurance Education Foundation in Indianapolis. "They don’t want to go to one place to get insurance and one place to get stocks. They want to go to one place to get their insurance, stocks and do their banking." While financial services organizations are expected to get bigger, mergers and acquisitions will reduce the number of them creating more competition for jobs. The people working for these financial advising giants will need to be the best at what they do – and be able to sell, market or work with a variety of financial products.  By 2008, the Bureau of Labor Statistics projects the percentage of jobs devoted to the finance, insurance and real estate professions will fall slightly to 5.2% of all U.S. jobs from 5.5% in 1998.

There are financial rewards for people up to the challenge.  According to the National Association of Colleges and Employers' Summer 2000 Salary Survey, the middle-range of starting salaries in the insurance industry was $30,420 to $37,000. Middle-range starting salaries in commercial banking ranged from $27,000 to $39,000 and ranged from $40,000 to $45,000 in investment banking.  Additionally, according to NACE, business administration graduates are enjoying big starting salary jumps, with their average offering rising 6.5% from July 1999 to $35,991. Accounting majors saw an increase of 7.1% to an average of $36,919 and marketing graduates saw a 5.1% increase to $33,141.  Mid-to-late career, financial services professionals can make six-figure salaries. People at the top of the investment banking profession can earn well into the millions annually.

The consolidation industry watchers forecast a number of things could make entering and surviving in the field challenging. The financial health of U.S. consumers is  a key factor. As Americans carry the highest level of consumer debt in history, many don’t have a large amount of money to dedicate to investing. Consumer spending, which had been at its highest historical levels began to slow in the spring after the Federal Reserve raised interest rates to cool-off an economy it believed was growing too rapidly. As interest rates rise, consumers tend to have less money on hand and need to allocate larger percentages of their income to service or pay down debt.  While economists don’t see it on the horizon now, if consumer spending slows greatly, companies may eliminate jobs, which could lead to bigger financial problems in the country. These conditions would make selling financial services more challenging and could lead to downsizing in the financial services and other industries.

While there are traditional macroeconomic considerations, technology is changing the economic cycle and has created a prolonged period of job and income growth in the U.S.  The financial industry is increasingly using automation, the Internet and telephone customer service centers to work with consumers. That will continue to expand the need for workers interested in financial services careers who can work on the technology side, said Edward C. Dolby (right), president, Bank of America – North and South Carolina. Dolby, who heads up commercial, consumer, small business and affluent banking (managing the assets of high net worth individuals), in the Carolinas, expects banks to expand their use of sophisticated telephone systems, the Internet and call centers to serve customers. To serve those needs, companies will need computer programmers, Web designers as well as people who are comfortable with telecommunications. When Bank of America said in July that it would cut about 7% of its workforce or 10,000 employees - mostly in its middle and senior management ranks and positions made obsolete by process improvements – it said it would spend more money on e-commerce initiatives.

One of the greatest opportunities in the industry is serving minority consumers. Financial services firms are targeting minorities because they have already deeply penetrated the white market. African Americans have the highest buying power of any minority group, at $532 billion, up 73% since 1990, according to the 1998 Multicultural American Dream Index study. The study was performed by marketing firm Graham Gregory Bozell, research and consulting firm Market Segment Research and management consulting firm DemoGraph Corp. to measure economic and quality of life measurements of minorities. In 1997, there were 259,000 African-American households with annual incomes of $100,000 or more translating to 16% of all U.S. households at that level, according to the study. When firms go after an African-American consumer, many are finding that an African-American salesperson will get the sale more often than a salesperson of another race."It’s not altruistic," said Marsha Jones, who owns the New York-area branch of ExecuSearch, a minority-owned executive search firm. "They’re doing it because they need to. They’ve tapped out the other market."

Damon R. Dyas, a certified financial planner with American Express Financial Advisors in Southfield, Mich., has certainly found a lot of opportunity in the African-American market. Dyas’s work involves helping people put together a financial plan to meet their goals, whether it is saving for a house or for their children’s college education. Then he helps them choose financial instruments such as mutual funds, annuities or insurance policies to help them achieve those objectives. He charges a fee for the financial plan and gets commissions from the financial products he sells. Since starting with American Express in 1993, the Michigan State University graduate’s client base has evolved from being mostly white to 60% African American.

“The door is open for African Americans in the financial services industry,’’ Dyas said. “The companies are realizing that our community is kind of an untapped market. They realize that Black people have money, but that they may not be directing it toward the right places.’’

Opportunities to work in the insurance industry and to sell insurance to African Americans have been plentiful for many years – but the industry, which often seems stodgy or boring to outsiders, isn’t always an area that young people think to explore. But the mere fact that African Americans buy a lot of insurance is a great reason to enter the industry, said Thomas J. “T.J." Nicholson, assistant field vice president for Allstate Insurance.

“African Americans buy a lot of insurance and that’s a great reason to get into the business,’’ Nicholson said. “We should get paid for it. There’s a direct correlation between what you sell and what you make.’’

That’s true for many sales-based professions in financial services. However, while many companies are clamoring for minority talent, it’s not always easy for African Americans to advance once they break into the industry, said Tony Chapelle (right), publisher and editor of Securities Pro Newsletter, a New York-based publication that tracks African Americans on Wall Street. He indicates part of the problem is that often, African Americans don’t get worked into the culture of the organizations. Sometimes they end up being somewhat isolated or experience a clash in style with non-African-American counterparts or supervisors."The thing is Blacks have been able to get hired in the business, but the companies have a hard time promoting and retaining them," Chapelle said. “They don’t get pushed up the ladder like other folks.’’

There are exceptions such as Thomas W. Jones, chairman and chief executive officer, Global Asset Management and Private Banking Group and co-chairman of Salomon Smith Barney Citi Asset Management Group; and Randall C. Hampton, president and chief executive officer of ABN AMRO Asset Management. Both are African Americans, who have climbed the ranks.

People who want to position themselves for a financial services career may want to consider pursuing an MBA, but that degree isn’t always necessary to get in the door. Additionally, many MBA programs prefer for candidates to have several years of work experience before they apply.

Undergraduate students may want to consider majoring in disciplines such as accounting, finance, economics or business administration and should be sure to have a solid math background. However, there is room for people who get liberal arts degrees, according to Dolby.

“Liberal arts students will also be highly valued because they have more flexibility,’’ Dolby said. “They have emotional skills that go a long way when working with clients."

Also, students and people early in their careers should seek out mentors, said Solomon Hicks (right), Prudential Insurance’s top selling agent. He suggests finding people who are on a path that appeals to you and tell them your goals.

“Tell them ‘I want to be like you. I want to do what you’ve done,’" Hicks said. “Let people know what your goals and dreams are."

People interested in the field shouldn’t be afraid to take what, at first, may seem like a step back. Cid D. Wilson (right), now a research associate in the Equity Research area of Citigroup Inc.’s investment banking arm, Salomon Smith Barney, began his financial services career in the mailroom of PaineWebber Inc.’s branch office near his college.  Aside from a transportation and meal allowance, he was unpaid. While in the mailroom, he made use of the pounds of extra investment research analysis that flowed into the office.

"The cool thing was that I got all the research,’’ Wilson said. "I would take the research and read it and that helped me get up to speed about what PaineWebber was thinking {about investing}.’’  Over the next four months, Wilson learned about evaluating stocks and researching companies. He looked over stockbrokers’ shoulders to learn about their jobs. He wiggled his way into meetings with portfolio managers and other PaineWebber clients. Since he wasn’t being paid, there were few objections when he asked to be a part of projects or meetings At the end of the four-month stint, he was given a part-time position as a broker’s research assistant.

People interested in financial services careers should read publications such as the Wall Street Journal, Barron’s, other business news magazines and have a general awareness of news and economic issues. Also, attending financial planning seminars and joining professional organizations such as the National Association of Securities Professionals, which works to expand the presence and influence of minorities and women in the securities industry, is recommended.  Researching companies and learning about their values can help one decide if that particular organization is a good fit.

“There are certainly more opportunities for African Americans to advance," said Sharon Taylor (right), corporate vice president and ethics officer, Individual Financial Services at Prudential. “The key is preparation and performance. Given the market dynamics and the pace of change, people need to be prepared for those challenges," Taylor said.

Philana Patterson is a New York-based financial journalist.