Financial services, which Price describes as ''the instrument for allocating savings and investments in the country,'' is a growing slice of the overall economic pie.  Finance, insurance and real estate represented 19.4% of gross domestic product (GDP) in 1997, or $1.57 trillion, up from 18.9% in 1996, according to the Bureau of Economic Analysis. Financial services is expected to be a boom industry of the next decade due, in part, to the accumulation of private wealth. However, things aren't all rosy. The mature insurance sector is suffering from sluggish growth and declining operating profits as fewer people buy life insurance. The securities and investment business can be volatile, as last year's collapse of global capital markets and bankruptcy of hedge fund Long-term Capital Management show. In addition, a slowdown in the economy and a rise in interest rates could slow growth of the rocketing stock market and hurt companies' profits.

The sector is undergoing major fundamental changes that promise to increase  competition as well as opportunities. Consolidation continues to transform the face of many businesses, especially banking and insurance.  Geographical borders continue to blur as more foreign institutions buy American firms and vice versa. Many firms are also bracing for the passage of the financial services reform bill, which would tear down the legal barriers limiting securities firms, banks and insurance companies from entering one another's markets, thus repealing the Glass-Steagall Act. Both Houses of Congress passed different versions earlier this year. President Clinton could decide on a compromise bill this year.  While it would accelerate the creation of financial superstores, the bill would also intensify competition among firms and lead to fewer financial companies.

The sector, heavily dependent on computer systems, is also eyeing the arrival of the new millennium with some trepidation. Many firms have taken billions of dollars in reserve to get their systems ready for year 2000, but there are sure to be some problems. The consulting firms, however, like PricewaterhouseCoopers and Ernst & Young, are getting additional revenue from Y2K- related work by helping companies prepare for the new era. And, of course, there's the Internet, likely the most significant force sweeping through the industry and the whole economy. The commoditizing of services that the web brings will lead to more intense competition and lower profits for many companies. But many smart firms are learning how to exploit the exploding technology, ensuring their place in the Web era.

The industry is also under pressure to include more minorities. While their numbers remain disturbingly low, African Americans represent 10.5 percent of the finance, insurance and real estate sectors as of 1998, according to the Bureau of Labor Statistics (BLS). The African-American presence is being felt in almost every corner of the business and occasionally at the top. In April, the American Express Company announced President Kenneth I. Chenault would become chief executive officer for the giant New York-based financial-services and travel firm in 2001. Financial firms, hungry to tap the burgeoning minority market, are beefing up their diversity programs and recruitment of minority graduates.

Along with American Express, California-based Charles Schwab is leading the charge to pitch its products to minorities and increase minorities on its employee rolls. ''You can't market to minority groups unless you are reflective of that population,'' says Michael DeFlorimonte (left), who, as vice president of specialized markets, is responsible for Schwab's minority marketing efforts, which include aligning with minority firms such as Ariel Capital Management. Schwab held an investment education workshop at Morehouse College in the Spring and is planning another at Florida A&M University in the Fall, according to DeFlorimonte. The firm uses these events as recruiting tools, he says. 

Some sectors should show growth in employment. The industry needs investment bankers to find capital for the increasing flow of companies looking to expand or go public, accountants to understand the increasingly complicated merger deals and financial sales reps to sell and understand the flood of financial products hitting the markets.  But, overall, as Lee Price notes, the financial services sector ''won't grow rapidly on the employment side due to technology'' but the jobs created will be good jobs and well paying. For almost eight years, Michelle Owens has occupied one of those jobs. She earns a ''six-figure'' salary as a financial consultant at one of the giants in the industry, Salomon Smith Barney.  ''My job offers total freedom,'' says the Harvard MBA. ''I'm making a difference in folks' lives and there's potential for unlimited income.''

Few sectors are as affected by consolidation and technology as the banking industry, which has gone from tellers to ATM to Internet banking in almost no time at all. To compete in the new world, banks are buying each other to spread technological and other costs across a broader and broader customer base. In the most dramatic example: NationsBank and Bank America merged in 1998, creating a behemoth with more than $600 billion in assets and tentacles in 36 countries. Everyone, it seems, wants to be like Citigroup, which was formed in 1998 from the $73 billion merger of Citicorp and the Travelers Group Inc. It's seen as the prototypical financial supermarket, offering brokerage, asset management and insurance to people all over the globe. The banking reform bill should make the creation of financial superstores  easier. However, it would also allow securities firms to buy banks for the first time.  Banks can buy securities firms under current rules.

Consolidation is shrinking the number of banks in the U.S. It's also creating an industry with very large banks at the top and small ones at the bottom and fewer mid-sized banks.  But analysts expect the next wave of mergers to be led by small community banks, with assets of $1 billion or less, buying each other in a rush to increase their size. The sector is relatively healthy. The amount of money banks hold is increasing and profits are rising. According to the Federal Deposit Insurance Corp., 8,721 commercial banks - a decline from 8,774 from the beginning of the quarter -- reported a record $18 billion net income in the first quarter of 1999, 12.9 percent higher than the year-ago previous quarter on total assets of $34.1 billion. The 1,669 savings institutions reported $2.7 billion in net income for the quarter, the group's third-highest in history.  But mergers and technological changes are also crimping employment. According to the BLS, banks employed more than two million wage and salaried workers, making it the largest of the finance, insurance and real estates sectors in terms of manpower.  But the bureau sees employment in banking slipping 4 percent  over the 1996-2006 period. Loan officers and financial service sales representatives are expected to see gains among their ranks, however.

Bureau records show that 12.6 percent of those employed in the banking sector in 1998 are African Americans, a relatively decent percentage. The perception is that banks are more aggressive in hiring minorities than other sectors of the financial services industry such as insurance. New York-based Chase Manhattan, the third largest bank in the U.S. with $291 billion in assets, is cited as having an especially strong diversity program, forming 35 diversity councils in the past two years. Much of that is probably driven by the industry's closer adherence to the Community Reinvestment Act of 1997, mandating that regulators consider a bank's record in meeting credit needs in minority and under-served areas when considering merger applications.

Another healthy sector is the securities and investment services business. Fueled by the historic bull market and influx of money into the U.S. equity markets from baby boomers and foreign investors, the leading Wall Street firms such as Merrill Lynch, and the Goldman Sachs Group have generated increasing revenue from underwriting IPOs, advising on mergers and acquisitions and trading securities. From 1980 to 1997, securities firm capital grew 13-fold to $92 billion and security industry revenue increased nine-fold to $145 billion, according to the Securities Industry Association. The New York rating service Standard & Poor's expects the investment services  industry to report pre-tax profits of between $12 billion and $13 billion in  1999, up sharply from 1998's $9.8 billion, when the global crisis in capital markets hurt business.

The virtual explosion of online trading is helping to push growth of the securities business.  Through leading firms such as Charles Schwab and E-Trade Group, investors can trade stocks conveniently through the web-based accounts for as low as one-tenth the commission of traditional firms. Industry consultants Forrester Research in Cambridge, Mass, expects the number of online accounts to grow to 18 million by the year 2001 from 1.5 million in 1996. After much hesitation, traditional firms are finally endorsing online trading, which was stealing away customers. In early June, Merrill Lynch said it would offer customers online trades for $29.95, matching Charles Schwab.

Strong business should spur employment. According to the BLS, employment among securities, commodity and investment companies should increase 34 percent between 1996 and 2006, outpacing the 14 percent expected for all industries combined. The sector had 551,000 wage and salaried workers in 1996. The hot job areas will be corporate finance, retail and institutional asset management, notes Bernard B. Beal, chief executive of M.R. Beal & Co., an African-American investment banking and financial advisory firm in New York. Beal's also co-chairman of the SIA's diversity committee.

With all that money flowing into securities' business, there's more pressure on the sector to share more of it with minorities. If banks are being complimented for creating more diversity, Wall Street securities and brokerage firms are still being criticized for clinging to its image as a bastion of white males. The sector has seen its share of high-profile wrongful discrimination cases, including the $1.35 billion suit brought by an African- American securities analyst, Christian L. Curry, of Morgan Stanley Dean Witter & Co. A recent study by the SIA found that women and minorities hold a greater share of management jobs in lower paying sectors of the business, such as administration compared with real money making operations, like investment banking and retail sales. Across Wall Street, the SIA survey, based on employees of the responding firms, showed that minorities make up 11.5  percent of the workforce and African Americans 4.5 percent.

The insurance business represents about 8% of GDP, according to Robert P. Hartwig (right), vice president and chief economist at the Insurance Information Institute, an industry trade group in New York. The industry, divided in two broad categories, life and health and property-casualty insurance, provided  2.3 million jobs at the end of 1997 and controlled assets of $3.4 trillion, according to the Insurance Institute. There are 7,900 domestic insurance companies in the U.S.  According to the BLS, employment in health and pension funds insurance industries is expected to grow rapidly over the next seven years while life insurance employment may see a decline. Overall, the BLS sees wage and salary jobs in the insurance industry growing 11 percent from 1996 through 2006. Business, however, is far from healthy. Standard & Poor's pointed out that statutory earnings for life insurers dropped 18 percent in 1998 from a year ago and the fundamentals of the property-casualty  sector, where premium has been declining, remain weak. The sector paid out a lot of money last year to cover a near record $10.1 billion worth of catastrophes. This year is also running high, says Hartwig.

Like the other sectors, the sleepy insurance business is facing rapid changes brought by intense consolidation. Since 1994, merger and acquisition activity in the sector has been vigorous. The industry saw 565 mergers and acquisitions (M&A) in 1998, representing $165.4 billion, according to Hartwig, who sees M&A activity slowing  a bit this year. Much of that involved foreign companies buying U.S. firms. But U.S.  companies are also looking overseas, especially Latin America, he says. The sector is  seeing more financial institutions, such as banks, sell insurance. To compete, some  insurance companies are divesting their non-core operations and focusing on providing  simpler insurance products. More companies are also deciding to go fully public, or  demutualize, which should give them more money for acquisitions and expansion.

Furthermore, more and more Americans are buying insurance over the Internet, cutting out the sales agents and threatening a vital part of the traditional insurance system. Like brokerage firms, traditional firms face a dilemma: How do they also sell insurance over the net without eliminating their own sales force? Helping to come up with the answer for State Farm Insurance Co. is part of Harold Gray's (right) responsibility as a regional vice president. Gray, who oversees 2,100 employees, says State Farm, which has more than 75,000 employees and around 16,000 agents, is ''working feverishly'' to  determine how to exploit the web without displacing its agents. The company's site,  listed as one of the top ten insurance sites according to some industry observers, offers quotes to customers on policies.

It's indeed a good time for African-American graduates to consider the financial services industry. In this era of enormous uncertainty, targeting minorities, either as employees or customers, is one of the soundest business decisions companies can make. However, while demand is expected to be strong for qualified graduates, employers' standards remain high. So graduates need to be even more prepared. A sharp financial acumen, honed by accounting and statistics courses, is the key to landing a top job. But many employers are still emphasizing soft ''people'' skills as well.

Just ask Whitney Baker (left). In her travel-heavy job as a senior business development officer at Sovereign Bank in New Jersey, Baker puts her strong networking and people skills to work to meet her monthly quota of $3 million in loans.  ''Even if you work in the back office doing underwriting, you must be able to work with clients,'' the New Jersey native says. ''If you aren't a people- person, you probably don't want to enter this arena.'' Graduates must also be flexible, knowing that, with companies sometimes changing hands overnight, where they start in a career might not be where they end up.

Chart Listing of Several Top Firms in Key Financial Service 
(Source: a 1999 Fortune magazine list unless otherwise indicated.)

BANKS

1. Citigroup: $76,431.00 (revenues in millions) 170,100   (employees)

2. Bank of America: $50,777.00 - 170,975

3. Chase Manhattan: $32,379.00 - 72,683

SECURITIES FIRMS

1. Merrill Lynch & Co.: $35,853.00 (revenues in millions) 63,800    (employees)

2. Morgan Stanley Dean Witter: $31,131.00 - 49,300

3. Lehman Brothers: $19,894.00 -  8,873

INSURANCE

1. State Farm Insurance Cos.:$44,620.90 (revenues in millions) 76,257 (employees)

2. TIAA-CREF: $35,889.13 - 5,229

3. Prudential Insurance Co.: $34,427.00 of America - 77,806

Real Estate Brokerages/Services (Residential)
(Provided by Real Trends, Inc., a real estate publication and communications firm) Size is measured by closed sales volume.

1. NRT Inc. $84 billion (closed sales volume) - 30,000 agents and 4,800 staff

2. Yeichert' Realtors: $16 billion - 7,200 agents and 1,000 staff

3. Long & Foster, Real Estate, Inc.: $10.5 billion - 5,650 agents and 968 staff

Commercial Real Estate
(1998 figures provided by Market Guide)

1. CB Richard & Ellis Services Inc.:  $1,034.5 billion (sales) - 9,400 (employees)

2. Trammell Crow Co.: $517.5 million -  5,100 employees

3. Grubb & Ellis Co.: $282.8 million - 4,400 employees