Investment Bankers – Efficient or Evil

If you were to ask 100 people what they thought of investment bankers, more than likely you would get a response that equated to 50% for them being efficient and 50% for them being evil.  Without doubt, the investment banker serves a very important role but the key for this professional being helpful in your financial goal would be choosing the right banker.  Unfortunately, not all investment bankers are good choices in that some lack full knowledge needed for guiding clients to profitable investments and some simply do not invest the level of interest and involvement needed for t

If you were to ask 100 people what they thought of investment bankers, more than likely you would get a response that equated to 50% for them being efficient and 50% for them being evil.  Without doubt, the investment banker serves a very important role but the key for this professional being helpful in your financial goal would be choosing the right banker.  Unfortunately, not all investment bankers are good choices in that some lack full knowledge needed for guiding clients to profitable investments and some simply do not invest the level of interest and involvement needed for the client.

Before we get into all the pros and cons associated with an investment banker, is it essential to understand who this professional is and what the primary role is to clients.  This professional works with a variety of investment types, and works on different business ventures to include mergers, acquisitions, client consultation, etc.  While most investment bankers work on behalf of clients, in addition some work on their own business venture too.  Another service provided by this professional is to provide assistance for companies that are struggling financially for one reason or another.  In addition, offering investment strategy advice is commonly something this professional provides.

For a person to provide investment banking services, he or she would need to hold some kind of degree in finance, economics, and/or accounting.  Typically, the degree this person would have would be advanced, commonly one connected to the banking industry.  Keep in mind that some of the more talented investment bankers have started their career with a Bachelor’s degree and through hard work and dedication, worked their way through the ranks.  Regardless, when hiring this type of professional, it is imperative you choose someone with in-depth knowledge and experience.

Although all investment bankers analyze the client’s financial goal, monitor the economy, and deal with various legal issues pertaining to acquisitions and antitrust, most have a career that focuses on one particular area of finance and banking.  For example, some investment bankers enjoy working on mergers and acquisitions while some prefer working with companies struggling to survive.  Now, regarding the pros and cons associated with this professional, consider the following.

Pros

One of the primary advantages to working with an investment banker is gaining an edge.  In other words, to be successful with investments, especially in today’s economy, you need insider information, professional tips, and a sophisticated strategy.  A professional such as this would be able to provide all this to you and more.  As a result, your investments would be based on knowledge and not chosen by guesswork.

In addition, when the right investment banker is chosen, modern systems and infrastructures would be used to facilitate every aspect of the investment process.  This means being able to develop a much broader market strategy, being able to respond quickly but also appropriately to market fluctuations, and having leverage that you would otherwise not enjoy.

Cons

Along with the efficient aspects of an investment banker, you should be aware that in most cases, this person’s services are expensive.  Of course, you are paying for the investment banker’s education, knowledge, experience, and expertise but many people have a hard time justifying the cost to hire this kind of professional.  Then as mentioned, most investment bankers have tunnel vision, meaning their area of practice is limited.  Therefore, if you needed assistance for more than one area of your company, it would be a challenge to find one investment banker that could meet all your needs.