New England plays an outsized role in the financial services industry, according to a 2017 report from the New England Council, the nation’s oldest regional business organization. The report contains research from professional services firm PricewaterhouseCoopers on the average annual wages, economic impact and employment of New England’s financial services industry, which includes the asset management, banking and insurance sectors. The report finds that while New England made up just 4.6 percent of the U.S. population in 2015, the region contributed 6.2 percent of the nation’s direct financial services employment and 8.3 percent of the industry’s total wages.
In 2015, there were 375,460 direct jobs in New England’s financial services industry, the seventh largest industry in the region. The industry’s average annual wage in New England increased 26 percent between 2009 and 2015 to $157,674, becoming the second highest wage in the region behind management positions and more than double the average regional wage of $64,996.
New Hampshire ranked third of the six New England states for direct financial services industry employment with 30,220 jobs. When considering the total of direct, indirect and induced employment (see employment chart for definitions), NH’s financial services industry accounted for 8.4 percent of the state’s workforce and 11.5 percent of the state’s GDP in 2015. Industry wages of $150,369 for asset management, $117,521 for banking and $102,349 for insurance in NH in 2015 eclipsed the state’s average annual wage of $55,677.
While New England’s financial services industry hasn’t yet matched its pre-recession employment numbers, NH has added industry jobs every year since 2010. Additionally, NH ranked fourth nationally for insurance carrier payroll as a percentage of total state payroll in 2015.
“The financial services sector is one of our region’s strongest job-generating, growth-producing industries,” says James T. Brett, president and CEO of the New England Council. “In no state does financial services amount for less than 5 percent of that state’s jobs, and in many states the impact is far greater.”
So what’s driving New England’s robust financial services industry? The report credits, among other factors, proximity to top colleges and universities and investment in financial technology (fintech), which includes advancements like automated investment advice, digital and mobile banking, and enhanced financial data collection and analysis programs. In 2016, New England was home to four of the country’s top 10 MBA programs, 10 of the top 50 national universities and five of the top 10 liberal arts colleges. Through early 2016, total investment in fintech startup companies founded in New England was more than $750 million.
“Curriculums offered in the region have continued to evolve, with several institutions offering courses of study in the area of financial technology,” the report states. “The financial services sector continues to evolve with the technological revolution and the rise of fintech…This interconnectedness and access to top talent through our universities is crucial to future success in a technological world. The New England region fosters a cycle of education and innovation.”
The full report, entitled “The New England Financial Services Industry: Around the Corner and Around the World,” is available at http://newenglandcouncil.com/assets/NEC-Financial-Services-Report-Jan-2017-FINAL.pdf.
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