Financial Services Alaska

The term financial services refers to the business of providing services related to various financial needs, including checking and savings accounts, retirement accounts, mortgages, credit cards, alternative investments such as mutual funds and other securities, financial management, safe deposit services, and various types of consumer loans both secured and unsecured. Sometimes financial services can also refer to the distribution of retirement accounts, trust funds, and inheritance funds. Financial services can cover such a wide variety of things that it can be broken down into subcategories that would take up a long list.

Several different types of institutions provide the financial services including banks, credit unions, mortgage companies, finance companies, savings and loans, and building and loans, although the latter is not as popular as they were many years ago. The biggest majority of banking is conducted at banks, savings and loans, and credit unions. Mortgage companies and finance companies are different in that they do not offer full financial services, but instead, are specialized non-banking services. The same holds true for credit card companies who are called in the financial world “non-bank banks” meaning that they do not offer the services a full service bank does but still fall under the jurisdiction of the Banking Commission.

Sometimes insurance companies provide financial services such as mortgages and retirement savings plans. These types of services are becoming more common as everyone tries to enter the financial market in order to get a cut of the monetary gain it offers. On the other end of the scope, banks are attempting to enter the insurance market, so everyone is looking to get a piece of the pie. With insurance companies entering into banking and banks entering into the insurance industry, the financial services market is definitely becoming quite diversified to say the least. It can be difficult sometimes to figure out where to go when you are looking for certain types of financial services. What you need to do initially is figure out what your financial needs are, both short term and long term. What your financial services needs are can all depend on if you are single, have a family, are close to retirement, etc.

Up until the past twenty years or so banks always offered a variety of financial services, while savings and loans and credit unions limited their offerings to savings accounts and mortgages. In fact, many people avoided the commercial banks for those services because the credit unions and savings and loans were in a position to offer better rates than their commercial competitors were.

When the financial markets talk about full-service financial providers, it means that the financial institution has an entire line of financial services that include all or most of the following:

Checking accounts

Savings accounts

Alternative banking (Stocks, bonds, mutual funds, securities)

Financial management

Financial advisors

Credit cards

Mortgages

Consumer loans

Safety deposit boxes

Financial management of special accounts such as retirement, trusts, and inheritance

Until the late 1980s and 1990s, savings and loans and credit unions provided savings accounts of various types and mortgages but not much else. Regulations under the Federal Savings and Loan Corporation (FSLIC) and the National Credit Union Association (NCUA) prevented them from offering the same services as a commercial bank initially, but as needs changed, so did regulations. Although they still do not operate under the Federal Deposit Insurance Corporation (FDIC), they are insured under their separate charters and provide the same services as commercial banks, with one exception: loans usually have a lower interest rate and savings accounts usually pay a higher interest rate. That doesn’t mean, of course, that is always the case because there may be special provisions that commercial banks have that allows them to charge a lower interest rate for certain customers, or perhaps a special consumer lending program. This is always worth looking into, even if that takes a little time and some careful research. Especially for young families who are considering buying their first homes or any people on a budget who are considering major purchases.

Of all the financial service providers, these companies probably have the most minimal involvement in the financial market. They are different in that a mortgage broker processes mortgage applications and then places them with a mortgage servicing company whose job it is to handle all of the mortgage-related financial needs of the homeowner such as paying the taxes and insurance on the property out of the mortgage payments as well as processing the payments.

A mortgage servicing company may also offer homeowner loans or refinancing options to its own customers at a rate that is below industry average, contingent upon the individual homeowner or lender regulations. Although banks, credit unions, and savings and loans are also legally permitted to make mortgage loans, the majority of people utilize the services of a mortgage company for any number of reasons. The most common one probably lies in the fact that many home buyers, especially first time home buyers, do not have the cash outlay to afford both a down payment and closing costs, so they tend to lean toward government guaranteed loans (FHA, VA, Sallie Mae, Ginnie Mac and others). In most cases, commercial lenders are not interested in financing government-backed mortgages, so it leaves the buyers with having to seek the services of a mortgage servicing company.

Another reason homebuyers may choose a mortgage servicing company is that they are working closely with a realtor who has good relations with that lender, thus increasing their chances of mortgage approval. Another reason may be applicants under the first time buyers’ program since more funds seem to be available with mortgage servicing companies than banks. Mortgage servicing companies are focused on just that: mortgage services, and will often take that extra step in finding financial services solutions for those who might not be having any lucks going through regular banking institutions.

Vonna Husby and Assoc., LLC/Raymond James

907-374-9270
301 Cushman Street
Fairbanks, AK
www.vonnahusby.com