Investment bankers are proficient analysts themselves, but they have subordinate financial analysts that crunch the numbers for them.
They are primarily in the business of procuring clients for deals such as IPOs which their investment bank will underwrite. Investment bankers are employees of investment banks whose role is to acquire clients for the bank and to be the liaison between clients and the back office of the investment bank.
The investment bank’s primary business is underwriting and distributing securities issued by another company, and advising on such large scale capital shifts as mergers and acquisitions. They are consultants, analysts, and salespeople who deal with large sums of money in motion between corporations and the public.
They also trade for the bank’s own accounts, without having to please any clients except for their management. This gives the bank the ability to harvest more money that can be used to facilitate larger and larger transactions and requirements.
The Glass-Steagall Act of 1933 separated commercial banks from investment banks, but it was repealed in 1999. Remnants of this Act remain, but some believe that the more important provisions should be reinstated, especially in light of the speculation that caused the crash of 2008.
Investment bankers will comfortably engage in much riskier investing than commercial banks should. The Volcker Rule, part of the Dodd Frank Wall Street Reform Act, put some of the separations back into effect but not all of them. Investment banking is sometimes called ibanking.