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Investment Banking: What It Is and How You Can Get Started

May 9, 2024

Investment Banking

You’ve probably seen in movies and TV shows—bankers in sharp suits barking orders and making deals over phone calls, and casually tossing around numbers with a seemingly endless number of zeros on the end.

But behind the glitz and glam, there exists a real industry that works closely with wealthy individuals, big businesses, and even governments in the world of high finance. It’s called investment banking.

Investment bankers are typically seen as the middleman between the investor and the seller, providing advice to either party and securing trades that will, hopefully, result in more capital for the investor.

Leading investment banks such as Goldman Sachs, Morgan Stanley, Bank of America, and JP Morgan work with various clients, ranging from high-wealth individuals to private and public corporations.  

These institutions aim to make more money on their current assets and leverage the services offered by investment banks to navigate through the complex financial transactions involved in the process.

As investment banking involves substantial sums of money, investment accounting software becomes critical for recording and assessing various aspects of the trade. The software is particularly important for monitoring market fluctuations so that clients are given up-to-date advice on when to buy or sell their securities. 

Types of investment banking

Three main types of investment banks are determined by the size of the clients they work for and the investment portfolios they maintain.

Bulge bracket banks 

Bulge bracket banks are the largest type and work internationally with the world’s biggest organizations and investors. These banks are familiar with handling multi-million, if not billion, dollar deals regularly as most of their clients are Fortune 500 companies. They offer a full suite of services, from mergers and acquisitions to asset management.

Middle market banks

Most middle market banks work with clients who have risen above the boutique level but aren’t quite ready for a bulge bracket bank. This can range from portfolios of around $50 million to over $500 million. While they typically have a national presence and cover more geographic regions than a boutique bank, they don’t always have the multinational capabilities of a bulge bracket bank. Nevertheless, they offer the same services as larger investment banks.

Boutique banks

Boutique banks are the smallest subset of investment banks. They’re often regionally based, offering services to a handful of clients in a certain geographic market or industry. Due to their small size, these banks may only offer a select number of services, like mergers and acquisitions, within their region.

Services offered by full-service investment banks

Most banks, even those that do not specialize in investment banking, offer some investment-based services such as underwriting and mergers and acquisitions. In contrast, investment-focused offerings are the primary function of investment banks.


Investment banks take on risks on behalf of their clients in exchange for a fee. In the process, the banks buy assets from their clients and sell them to the market or other investors. As there’s a risk that these assets might not sell, the bank charges a fee as compensation should this happen. This process is known as underwriting.

Underwriting is a vital process in the financial world. The level of risk is determined by thorough research, with underwriters looking at the financial situation of the securities issuer such as their cash flow and debts. From there, the underwriter will set the stock pricing for sale. 

As this price is set on a case-by-case basis, this ensures that all stock is priced fairly for the entire market and allows investment banks to set fairer loan rates that they think will be the least risky and turn the highest profit. 

Underwriting for companies going through the Initial Public Offering (IPO) process ensures they can raise the capital needed to go public, as their financial history has been reviewed independently by the underwriters. This means that anyone interested in buying stock, and providing this necessary capital to the company, has greater insight into the possible risks involved before handing over their investment money.

Mergers and Acquisitions (M&A)

Investment banks assist companies in buying and merging with other firms. They assess the financial history of the company being bought and determine the worth of the potential acquisition. They advise their clients on profitable investments.

Investment banks can act as advisors to both the acquiring and selling companies during the M&A process. These banks help the selling companies determine a fair asking price for the acquisition.

Sales and trading 

Investment banks have a significant network of investors and corporations who may be interested in working with other companies. They assist with all stages of selling and trading financial assets and investments.

Equity research

This branch of an investment bank is responsible for analyzing the current state of the market and reporting on investment opportunities for its clients. Analysts in the equity research department provide investors with detailed reports on whether they should buy, sell, or hold an investment based on how the company is performing within the wider marketplace.

Asset management 

Companies of all sizes hold a range of financial assets at any one time, from stocks and bonds to tangible assets like real estate. Investment banks provide management services for a business's full portfolio of assets, providing ongoing support and guidance on how best to manage these financial assets.

Best practices for investment banking portfolios

Investing money and financial assets can be daunting, especially if you’ve never worked with an investment bank. But their job is to help you make the best decisions for your money, so going into the process with a few key objectives in mind will help you make the most of this relationship:

  • Know your goals: Before making an investment, you need to know what you hope to get out of it. Are you looking to earn a specific amount of money in return, or are you hoping to grow your capital slowly and steadily? Your investment banker will be able to guide you, but it’s helpful to go in with an idea of what you want to achieve.
  • Understand your risk tolerance: The investment market is notoriously unstable, but some assets fluctuate more than others. Diversifying your portfolio over asset types and length of return will help you weather storms in the financial market and manage risk more effectively.
  • Look at investments with tax advantages: Speak to your investment banker about the types of investments you can make now that could benefit you come tax time. Retirement savings, for example, like 401(k)s and IRAs offer the ability to defer taxes until you withdraw that money in your later years, so they could be more helpful to you now than those funded with post-tax dollars.
  • Review your portfolio regularly: This should already happen if you’re working with an investment bank. But it’s never a bad idea to check in with your investment banker at least quarterly to assess how everything looks and if any changes need to be made to your portfolio.

Top investment banking accounting software

For companies with a large number of investments, using dedicated software to manage and track these is the best way to understand whether or not your investments are still working for you.

To be included in the Investment Accounting category, platforms must:

  • Track investments
  • Handle various types of accounting methods
  • Integrate with investment portfolio management and accounting software

* Below are the top five leading investment accounting software solutions based on popularity as of April 3, 2024. Some reviews may be edited for clarity.

1. Backstop Solutions Suite 

Backstop Solutions Suite is an investment management platform that helps consultants and investment banks manage various assets, from pensions to venture capital and private equity. The tool gives investors insight into market trends and new investment possibilities using developing technology such as machine and artificial intelligence (AI).

What users like best: 

“My favorite part of Backstop is the ability to quickly find data and communication history on all of my prospects. Being able to sort and set reminders for when to follow up with whom is extremely valuable to manage my sales workflow.”

- Backstop Solutions Suite Review, Derek B.

What users dislike: 

The UI is clunky - it looks old and takes much longer than it should to do anything. It moves very slowly.”

- Backstop Solutions Suite Review, Mark Q.

2. Altair 

As an investment accounting tool, Altair helps investors manage their portfolios effectively. The software provides ongoing reporting, allowing investment managers, pension fund coordinators, and private brokers to track securities across multiple currencies and countries at any given moment.

What users like best: 

"Altair product has a wide range of applications irrespective of domain like mechanical / electrical / electronics etc . Also, Altair provides all the supporting learning material, student's edition license copy free of cost which enables everyone to learn effectively.”

- Altair Review, Rohit M.

What users dislike: 

“Its layout and wording is for users with a finance background, general users struggle. Also, the UX is very poor, with multiple buttons that do the same job. This just confuses users.”

- Altair Review, Elenos P.

3. Altruist 

Altruist aims to make independent financial and investment advice more efficient, affordable, and accessible. The platform offers all-in-one advising and digital brokerage services, helping business owners open and fund investment accounts, manage their assets, and report on their investments more efficiently.

What users like best: 

“Portfolio software and performance software are included to create your own portfolios or use their model marketplace, including a newly minted direct indexing strategy. They use fractional shares through Apex Clearing Corporation, meaning you can diversify a client of any size into any portfolio you create or use.”

- Altruist Review, Logan J.

What users dislike:

“A pain point is the inability to open certain investment accounts (529 education accounts, HSAs, accounts for non-profits/endowments). The trading system could be further refined and include more information about tax gains/loss implications.”

- Altruist Review, Matthew F.

4. Axys

Axys is an easy-to-use investment portfolio reporting and accounting solution. It works with businesses and their financial advisors directly. The software provides a clear and accurate picture of portfolios and their performance, with a library of predefined and customizable reports for easy data visualization.

What users are saying:

Easy to use interface, all reporting and accounting functionalities in one place. However, the GUI of the software is somewhere not appealing.”

- Axys Review, Kartick R. 

5. Camra 

Camra is portfolio accounting software dedicated to the insurance industry's investment needs. Offering support for multi-currency and multi-instrument portfolio accounting, Camra helps insurance businesses manage complex securities and investments that conform to industry regulatory standards.

What users are saying:

“It’s a great tool to navigate different sets of data. However, it had some conversion issues to deal with in order to make the data more meaningful.”

- Camra Review, Michael C.


Make your next investment count 

Investment banking doesn’t need to be complicated. Working with expert investors to trade and manage your financial assets can help you diversify your portfolio and effectively mitigate the risks of the ebb and flow of global financial markets.

Build, track, and manage your wealth with investment portfolio management software designed to help you grow your capital’s worth.

Investment Accounting Software
Are you invested?

With investment accounting tools, keep track of your investments, how the market is performing, and what returns you're seeing.

Investment Accounting Software
Are you invested?

With investment accounting tools, keep track of your investments, how the market is performing, and what returns you're seeing.

Investment Banking: What It Is and How You Can Get Started As a branch of traditional banking, investment banking focuses on buying and selling securities for profit. Learn more about what investment banking is.
Holly Landis Holly Landis is a freelance writer for G2. She also specializes in being a digital marketing consultant, focusing in on-page SEO, copy, and content writing. She works with SMEs and creative businesses that want to be more intentional with their digital strategies and grow organically on channels they own. As a Brit now living in the USA, you'll usually find her drinking copious amounts of tea in her cherished Anne Boleyn mug while watching endless reruns of Parks and Rec.

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