Investment Banker in 1815: Rothschild's information network beats the government

What does an investment banker actually do? Two things: advise and underwrite. Advisory bankers guide companies, governments and funds through mergers, acquisitions, sales and restructurings; capital-markets bankers raise money for them by underwriting new stocks and bonds and placing them with investors. Investment bankers do not manage individuals' savings or take deposits — the day-to-day work is valuation, negotiation, documents and long client meetings.

Is an investment banker the same as a regular banker? No. A commercial banker takes deposits and makes loans; an investment banker advises on deals and underwrites securities. The two were legally separated in the United States by the Glass–Steagall Act of 1933 — which split Morgan Stanley out of J.P. Morgan — and although that wall came down in 1999, the jobs, skills and pay structures remain entirely different.

How much do investment bankers earn? In the United States in 2024, first-year analysts typically earned around $170,000–200,000 in salary plus bonus, and managing directors from roughly $1 million to many multiples of that in strong deal years. London, Frankfurt, Hong Kong and Tokyo pay less at every level, and bonuses — the majority of senior pay — swing sharply with the deal cycle.