Careers in Investment Banking - Career Options
What is Investment Banking? It is the industry of raising capital for companies and advising them on financing and merger alternatives.
The Players
- National, full-line firms, often referred to as "wirehouses",
are the largest full-service brokers-dealers and provide virtually
every financial service and product. Examples include Merrill
Lynch, Prudential Securities, Salomon Smith Barney, and A.G. Edwards.
Most of these firms are based in New York.
- Large investment banks, commonly referred to as the "bulge
bracket," their clients are predominately institutional.
Examples include Bear Stearns, Goldman Sachs, Lehman Brothers,
Morgan Stanley. Goldman Sachs, Merrill Lynch, Morgan Stanley,
J.P. Morgan, and Lehman Brothers.
- Regional brokers are full-service broker-dealers with
branch networks in certain regions of the country serving mainly
retail clients. Examples are Morgan Keegan , Raymond James Financial,
and Piper Jaffrey.
- Discounters and online brokers primarily engage in executing
orders to buy and sell stocks at lower commission levels; can
also provide a range of portfolio management and research tools.
Examples include Charles Schwab and Ameritrade.
- Small, specialized boutiques, often providing services such as M&A Advisory, bond or program trading, or research.
Primary Functions
Within investment banking can be broken down into the following broad categories:
- Corporate Finance
- M&A advisory services which negotiates and structures
deals
- Underwriting which focuses on raising capital for
a company
- M&A advisory services which negotiates and structures
deals
- Sales
- Retail brokers - develop relationships with individual
investors, sell stocks and provide investment advice
- Institutional salesperson - manage large groups of
assets, such as pension funds or mutual funds
- Private client services (PCS) - provides brokerage
and money management services for a very wealthy clientele
- Retail brokers - develop relationships with individual
investors, sell stocks and provide investment advice
- Trading - Traders facilitate the buying and selling of
stocks, bonds, and other securities by carrying an inventory of
securities for sale or executing a given trade for a client
- Research - analysts follow stocks and bonds and make
recommendations on whether to buy, sell, or hold securities; they
also forecast companies' future earnings
- Syndicate - provides a link between salespeople and corporate
finance; facilitates the placing of securities in a public offering
