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Quiet Giant: Minnesota Crafts Formidable Financial Services Sector

Discover Minnesota's rich industry in finance from asset management firms to one of the nation's largest banks and largest health insurer.

By Greg Lacour on October 28, 2016

Minnesota Finance
Minnesota / Courtesy of Federated Insurance

Few people outside the industry know it, but Minnesota is home to one of the nation’s largest and most dynamic financial services and insurance sectors.

Financial services account for more than 9 percent of Minnesota’s private Gross Domestic Product. The state has the third-largest number of FDIC-insured institutions in the country – 322 – with assets of $70.7 billion. Minnesota hosts nearly 138,800 financial services workers and more than 340 banking institutions are headquartered in the state, including U.S. Bancorp, the country’s fifth-largest bank by assets.

Accompanying the banks is an array of financial services companies, such as Ameriprise, Thrivent Financial, Allianz Life, Galliard and Piper Jaffray. One of the nation’s leading health insurers, UnitedHealthcare, is based in Minnetonka. Property and casualty insurer Federated Insurance provides multiple lines of coverage and risk management to niche businesses, including automobile dealers, petroleum marketers, equipment dealers and contractors.

Across the state, Minnesota provides a strong foundation for business and a pool of talented, educated employees for companies to hire.

“Federated Insurance has been a proud Minnesota company for more than 112 years, with the national headquarters for our 2,300 employees residing in Owatonna,” says company spokeswoman Julie Rethemeier. “The people we employ create our organization’s competitive advantage. Minnesota’s strong public school system, impressive health-care facilities, thriving communities and high quality of life help Federated Insurance attract and retain a world-class workforce.”

Learn about other industries in Minnesota: Advanced Manufacturing

The cities and their suburbs are some of the most economically stable and attractive in the United States.

“Allianz Life is proud to call Minnesota home,” says Walter White, the Golden Valley-based company’s president and CEO. “The state offers a vibrant economy, exceptional talent pool and an unparalleled quality of life. The state continues to lead the way as a model for business innovation and success, from startups to Fortune 500 companies, and everything in between.”

Banking and financial services continue to grow throughout the North Star State. The holding company TCF Financial Corp., based in Wayzata, holds more than $18 billion in assets. Wells Fargo, the nation’s third-largest bank, maintains an operations center in Minneapolis and a number of other assets throughout the state – and is one of Minnesota’s largest employers. Several other national banks have a presence in the state as well.

The thriving business climate hasn’t happened by accident. It’s the natural outgrowth of smart investment in institutions that have helped educate and train generations of Minnesota workers.

U.S. News and World Report named the University of Minnesota’s Carlson School of Management one of the top business schools for 2017. The Carlson School, founded in 1919, has forged strong bonds with most of the Twin Cities’ major banks and financial institutions through four ongoing enterprise programs – open to undergraduates and required for all full-time MBA candidates – in branding, funds, consulting and ventures. The programs give graduate students rare opportunities to gain professional experience in real-world settings.

For instance, students who take part in the Funds Enterprise program manage a combined equity growth and fixed income fund worth more than $38 million. All of the funds’ investors work for local financial institutions and act as mentors to the students – consulting with them one on one, evaluating presentations and offering guidance.

Read more about the business climate in Minnesota

“It’s one of the things we do that makes for very strong connections in the industry,” says Susanna Gibbons, who directs the fixed-income portion of the fund and until recently served as a Carlson School mentor while working for RBC Royal Bank in Minneapolis. “We have just a wealth of expertise we can tap into.”

Not surprisingly, the enterprise program creates abundant networking opportunities – and a pipeline of talented students who can move seamlessly into financial services after graduation. Like the state in general, the Carlson School might not be as well known for its excellence as some of its competitors, but it stacks up against any place in America.

“One of the things I’ve heard from people here is that the school really punches above its weight,” Gibbons says. “It doesn’t have the big national profile because so many graduates focus their lives and careers in the Upper Midwest. But there really is a critical mass of talent and businesses here that allows us to maintain a great balance between work and life.”

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