Industry Breakdown | Aspiring Interns

There are a wide range of divisions within Investment Banking, but the primary role of an investment bank is to provide financial advice to governments, businesses and institutions with raising capital and mergers and acquisitions. The IB roles are split into three core sections: front, middle and back office.

1) Front Office: the division that makes the bank money.

Divisions:

Investment Banking - focused on advising clients with mergers and acquisitions strategies, restructuring, work involving equity capital markets and debt capital markets.
Sales - promoting the bank’s trading ideas to high net worth individuals and institutions. They are the bridge between traders and clients.
Trading - focused on buying and selling products with the goal of making money on each deal.
Research - focused on providing expertise information in specific sectors or fields and writing reports.

2) Middle Office: supports the front office in areas of compliance, law and risk.

Divisions:

Risk Management - responsible for identifying potential risks, analysing them and taking steps to reduce the risk.
Compliance (Legal) - ensure the work undertaken by a bank is in line with government regulation and legislation.

3) Back Office: helps the bank to run smoothly, essentially the ‘engine room’ of an investment bank.

Divisions:

Technology (IT) - responsible for developing software to help improve the bank’s business and transactions, identifying emerging tech trends.
Treasury (Finance) - manages the bank’s internal finances, monitors liquidity risk and capital structures.
Operations - focused on helping to run and streamline a bank’s internal processes and ensure activities are carried out efficiently.
Human Resources (HR) - focused on recruiting talented people for the bank and dealing with company strategy and brand.

IBD is further subdivided into industry groups, the most common industry groups are:

Global Markets Breakdown

Global Markets handles all sales and trading activities within the primary and secondary market. The primary market is where new stocks and bonds are sold to the public for the first time, whereas the secondary is what we commonly refer to as ‘the stock market’.
Job duties within the Sales side include building and maintaining client relationships, alongside monitoring investment news that may lead to potential pitching opportunities. Traders, on the other hand, focus on the manual/electronic execution of trades and help develop new trading strategies.
Those in S&T are supported by a team of ‘Structurers’, who aid the structuring and execution of new ideas and trades. Research professionals within the Global Markets division provide in-depth analysis of such trades and forward-looking insights so that clients are able to make informed decisions.

Asset Management Breakdown

Asset or Investment Management can be broken down into Asset Management for individuals (i.e. Wealth Management often targeted at HNWIs (High Net Worth Individuals) and UHNWIs (Ultra HNWIs)) and for institutions, such as Sovereign Wealth Funds and Pension Funds. They essentially advise on how to invest or invest money on the behalf of these groups as a fiduciary. These services often interact with financial planning, which is a bespoke service offered to help people plan for life’s big financial events such as buying a house, paying for college and retirement.

Two of the main roles in this division would be that of a portfolio manager and an analyst:

Portfolio Manager - they analyse and discuss with clients what their requirements are for investing, then use these set parameters to choose the appropriate asset classes, geographies and risk exposures. They then proceed with purchasing funds or stocks within these criteria. After this, they will be responsible for monitoring and adjusting the portfolio as necessary, while keeping the client updated (with varying levels of client involvement, depending on whether they are looking for more discretionary or advisory services).
Portfolio Analysts - they are responsible for conducting research on funds and stocks or other asset classes. This research may use certain financial modelling techniques and also analyse the impact of any regulatory or economic factors, as well as comparing it to historical data. They then feed this back in detailed reports to their Portfolio Manager, as well as aiding them in client meetings and communications.

Other roles in Asset Management include roles in compliance, technology, risk and research (depending on the breakdown of roles in certain firms).