Ever wonder how investment banks actually make money?
They’re not taking deposits or handing out mortgages.
Instead, they’re advising CEOs, underwriting billion-dollar IPOs, and trading everything from corporate bonds to commodities.
While your local bank profits from interest on loans, investment banks earn fees, spreads, and performance-based payouts for moving serious capital.
In this guide, we’ll break down the six core ways investment banks generate revenue today, and show you which firms are dominating the field in 2025.
Key Takeaways
- Investment banks earn revenue through six main streams: advisory fees, underwriting, trading and sales, asset management, interest income, and principal investments.
- Unlike retail banks, they don’t rely on deposits. They monetize deal execution, capital markets access, and financial expertise.
- The largest banks like JPMorgan, Goldman Sachs, and Morgan Stanley dominate across multiple streams, combining fee-based income with trading and asset management.
- Scale is everything. Even a 1% fee on a billion-dollar transaction generates millions, which is why big banks focus on high-value deals and deep client relationships.
How Do Investment Banks Make Money? A 2025 Breakdown of Revenue Streams and Top Firms
Ever wonder how investment banks actually make money?
They’re not taking deposits or handing out mortgages.
Instead, they’re advising CEOs, underwriting billion-dollar IPOs, and trading everything from corporate bonds to commodities.
While your local bank profits from interest on loans, investment banks earn fees, spreads, and performance-based payouts for moving serious capital.
In this guide, we’ll break down the six core ways investment banks generate revenue today, and show you which firms are dominating the field in 2025.
So How Do Investment Banks Actually Make Money?
Investment banking is very different from everyday retail banking.
A retail or commercial bank takes deposits from the public, makes loans, and offers checking accounts, it’s the local branch where you cash paychecks.
An investment bank, by contrast, provides services to large companies, investors, and governments, helping them raise capital, trade securities, and make deals.
You won’t walk into Goldman Sachs to open a savings account; instead, a Fortune 500 CEO might hire Goldman to launch an IPO or acquire a competitor.
Crucially, investment banks operate in the world of high finance – multi-million or billion-dollar deals.
This scale is why they can earn huge sums: a 1% fee on a $1 billion deal is $10 million in revenue. They get paid not for physical goods, but for financial expertise, risk-taking, and relationships.
To understand how investment banks actually make money, you need to consider their six key revenue streams.
We’ll break down each below.
What are The Six Core Revenue Streams of Investment Banks?
To understand how investment banks actually make money, consider their six key revenue streams.
The six pillars of revenue are: advisory fees, underwriting fees, trading and sales, asset management fees, interest income, and proprietary or principal investments.
Each corresponds to a set of services an investment bank provides.
- Advisory Fees: M&A, Restructuring, and Success-Based Deals
Investment banks advise companies on mergers, acquisitions, and restructuring deals – essentially acting as high-stakes consultants or brokers.
Just as a real estate agent earns a commission for selling a house, bankers earn a percentage of the deal value for helping sell or merge a company.
Fees typically range around 1–2% of the transaction (e.g. a $10 billion merger might generate $100–200 million in fees for the banks involved).
In return, the bank provides valuation analysis, structures the deal, and navigates negotiations.
Think of them as corporate matchmakers, pairing buyers and sellers of businesses – and earning a commission when the “marriage” closes.
- Underwriting Fees: IPOs, Bonds, and Capital Raising
When a company raises capital by issuing stocks or bonds, an investment bank underwrites the offering.
Underwriting is like flipping a house for profit: the bank buys the new securities from the issuer, then resells them to investors at a higher price.
The difference (or underwriting spread) is the bank’s profit.
Banks charge 4–7% of the amount raised as fees for an equity IPO, for example.
For a $1 billion IPO, that could mean $40–70 million in fees.
The bank takes on the risk of placing the shares or bonds with investors.
Underwriting is like flipping a house: the bank “buys” a company’s stock in bulk and quickly sells it to the public for more, pocketing the spread.
They get paid for pricing the deal right and successfully selling it out.
- Trading & Sales (Markets Division)
Investment banks often have large sales and trading desks that buy and sell stocks, bonds, and other securities on behalf of clients and for the bank’s own account.
They act as market-makers, standing ready to buy at one price and sell at a slightly higher price, profiting from the bid–ask spread.
They also earn commissions on trades executed for asset managers or hedge funds. This business is akin to a wholesale shop buying goods and reselling at a markup – except the “goods” are financial securities.
A high-volume trading operation can generate billions in revenue from tiny spreads on millions of trades.
Additionally, some investment banks engage in proprietary trading, where they use the firm’s capital to take positions and hopefully profit.
Trading revenue is inherently volatile, but in good market conditions it can be a cash cow.
For example, a bond trader might buy corporate bonds at 99 and sell at 99.5 – that 0.5% spread, multiplied by huge volume, is income for the bank.
- Asset Management (Wealth & Funds)
Many investment banks have asset management or wealth management divisions, investing money on behalf of clients (institutions or high-net-worth individuals).
They charge fees based on assets under management (AUM) – often around 1% per year of the assets.
So if an investment bank’s asset management arm oversees a $100 billion portfolio, it might earn roughly $1 billion annually in management fee.
This is steady, recurring revenue (in contrast to one-off deal fees). It’s analogous to a subscription service or a management fee for handling someone’s property: the bank collects a small percentage each year for managing the client’s money.
For the bank, larger AUM directly translates into higher fees, creating an incentive to perform well and attract more assets.
Asset management also often earns performance fees (a cut of profits) on certain products like hedge funds or private equity funds, which can boost income further.
This business leverages the bank’s investment expertise at scale – one team can manage billions for many clients at once.
- Interest Income (Lending & Financing)
Unlike pure advisory firms, large investment banks also engage in lending and financing activities.
They might extend loans or credit lines to corporate clients (for example, bridge loans during an acquisition) or provide margin loans and structured credit to institutional investors.
Interest income from these loans is another revenue stream. In essence, the investment bank is also acting like a bank – earning the interest spread by lending cash.
A prime example is prime brokerage services for hedge funds: the investment bank lends money or securities to a hedge fund to enable leverage, and charges interest and fees for it.
Prime brokerage makes money through fees, interest on cash and margin loans, and commissions
In good times, the interest on billions of financing deals can be significant.
For instance, if an investment bank provides a $5 billion credit facility at a 5% interest rate, that could yield $250 million in annual interest revenue (shared with any syndicate partners).
While this looks more like commercial banking, it’s tied to the investment bank’s relationships and deal flow – they offer financing to facilitate deals and trades, profiting from the interest.
- Principal Investments (Direct Stakes & Funds)
Investment banks sometimes invest their own capital directly into ventures, companies, or assets – aiming to earn a return.
These principal investments can range from stakes in startups, to real estate projects, to launching in-house private equity or venture capital funds.
For example, a bank might take an equity stake in a fintech company or invest in a portfolio of infrastructure assets. If those investments appreciate or generate income, the bank profits.
One way to view this is the bank “eating its own cooking” – using its capital and expertise to invest alongside clients or in areas it finds attractive.
Investment banks also partner with or create private equity and venture capital funds to invest in companies, then later resell or IPO them at a profit.
hese earnings are not as predictable as fees or interest; they depend on market conditions and the success of the investments.
But in boom times, principal investing can deliver windfalls (e.g. an investment bank’s stake in a successful startup IPO could multiply its money). It’s comparable to a bonus scheme: the bank risks its own money for a chance at outsized gains.
Who Makes the Most? Top Investment Banks by Annual IB Revenue
In the world of investment banking, bigger is generally better when it comes to revenue.
Below is a ranked list of the top global investment banks by their recent investment banking revenue (deal advisory and underwriting fees, not total bank revenue).
These figures are estimates for 2023 (a relatively slow year for deals) and illustrate who leads the pack:
| Rank | Investment Bank | Estimated 2023 IB Revenue |
| 1. | JPMorgan Chase & Co. | ~$7.2 billion |
| 2. | Goldman Sachs | ~$6.0 billion (est.) |
| 3. | Morgan Stanley | ~$5.0 billion (est.) |
| 4. | Bank of America (BofA) | ~$4.0 billion (est.) |
| 5. | Citigroup (Citi) | ~$3.0 billion (est.) |
| 6. | Barclays | ~$2.5 billion (est.) |
| 7. | Deutsche Bank | ~$2.0 billion (est.) |
| 8. | UBS (includes CS) | ~$1.8 billion (est.) |
| 9. | BNP Paribas | ~$1.5 billion (est.) |
| 10. | Wells Fargo | ~$1.4 billion (est.) |
| 11. | HSBC | ~$1.2 billion (est.) |
| 12. | RBC (Royal Bank of Canada) | ~$1.1 billion (est.) |
| 13. | Jefferies | ~$1.0 billion (est.) |
| 14. | Nomura | ~$1.0 billion (est.) |
| 15. | Evercore (leading boutique) | ~$0.9 billion (est.) |
These figures cover investment banking fees (from M&A advisory and capital raising) and exclude other revenue sources like trading, consumer banking, or asset management. For example, JPMorgan’s ~$7.2 billion in 2023 IB fees was only about 6.8% of the ~$106 billion in total global IB fees that year.
But JPMorgan’s total revenues were much higher – over $150 billion in 2023 when including retail banking, trading, etc.
In fact, at JPMorgan the entire Corporate & Investment Bank division (which includes trading) accounted for roughly 30% of the company’s revenue, while the majority came from its consumer and commercial banking arms. The table above focuses only on the “investment banking” segment.
It’s also worth noting 2023 was a subdued year for deal-making; 2024 saw a rebound (global IB revenue jumped ~26% to $86.8 billion in 2024).
The rankings of the top players stayed fairly consistent, though: J.P. Morgan maintained the #1 spot (it also led in the first quarter of 2025 with 8.6% of global fee share), with Goldman Sachs #2 and Morgan Stanley #3.
The top five (JPM, GS, MS, BofA, Citi) collectively tend to command a hefty share of the fee pool.
Importantly, “IB revenue” is just one slice of these banks’ total earnings.
Many on the list have large divisions outside investment banking (for instance, Wells Fargo’s IB fees are small relative to its consumer banking income).
Meanwhile, pure investment banks like Goldman Sachs rely almost entirely on the businesses we described in the six streams.
Always distinguish IB advisory/underwriting fees vs. total revenue, a bank might be huge in consumer lending but a minor player in M&A, or vice-versa.
How Each Top Investment Bank Makes Money
Every investment bank has its own strategic focus and mix of revenue streams.
Here’s an overview of how some of the top firms and other notable players make money, with a focus on the split between advisory fees, trading, asset management, lending, etc.
- JPMorgan Chase & Co. (JPMorgan)
JPMorgan is the largest U.S. bank and a powerhouse in investment banking. It has a highly diversified business model.
Advisory & Underwriting
On the IB side, JPMorgan earns massive advisory and underwriting fees, it’s often #1 in global M&A and capital‑raising league tablesglobaltrading.net.
Trading & Sales
It also has a huge trading operation (in bonds, currencies, commodities, equities, you name it) as part of its Corporate & Investment Bank division.
Asset & Wealth Management
In addition, JPM boasts a large commercial banking arm and a thriving asset & wealth management business.
Interest Income & Lending
This means it also earns substantial interest income from corporate loans and credit lines, as well as recurring fees managing money for clients.
What Sets JPMorgan Apart
In essence, JPMorgan makes money every way an investment bank can: deal fees, trading profits, management fees, and net interest from lending – all at tremendous scale.
The firm’s breadth (from Wall Street advisory to Main Street lending) allows it to profit in various market conditions.
For example, if trading revenues dip, advisory might be up, or vice versa.
JPMorgan’s ability to cross‑sell is a big competitive advantage.
It is often said that JPM “does it all” – and its financial results show a balance across M&A fees, underwriting, trading income, and interest earnings that few others match.
- Goldman Sachs
Goldman Sachs is perhaps the most iconic investment bank, known for its aggressive trading culture and top‑tier advisory franchise.
Advisory & Underwriting
The other major piece is advisory and underwriting fees: Goldman is regularly among the top 2 in global M&A fees and equity underwriting, which brings in billions in fee revenue each year.
Trading & Sales
Historically, Goldman made a large chunk of its money from trading & markets activities. Even today, roughly two‑thirds of its revenue comes from Global Banking & Markets (which includes trading
That means things like bond trading, stock trading, commodities, and so on are big profit centers – Goldman acts as a market maker and takes principal positions, profiting from market flows and spreads.
Asset & Wealth Management
It also has a growing Asset & Wealth Management division, about one‑third of revenues, managing investments for clients and its own private‑equity funds – this provides more stable fee income (management fees, incentive fees).
Interest Income & Lending
Unlike some rivals, Goldman has minimal consumer banking (it dabbled in it with Marcus, but is scaling that back), so it lives and dies by Wall Street.
What Sets Goldman Apart
Its business model is essentially: advise on the biggest deals, underwrite major offerings, and trade everything under the sun. Goldman takes a “high beta” approach – when markets boom, it often makes outsized profits; when markets stall, it can hit rough patches.
Still, its ability to command premium fees (for example, advising Twitter’s sale or Apple’s bond issuances) and to capitalize on trading opportunities makes it one of the highest‑earning banks.
In short, Goldman sells financial expertise and market access, whether that’s helping a firm go public or providing liquidity in the bond market – and it charges top dollar for both.
- Morgan Stanley
Morgan Stanley is another Wall Street giant, with a model that has evolved significantly in the past decade.
Advisory & Underwriting
The other half of the business remains traditional investment banking: it’s a top player in M&A and equity underwriting (particularly strong in tech and healthcare sectors).
Trading & Sales
It has robust sales & trading desks (especially in equities) and still makes significant trading revenue, but generally with a bit less risk emphasis than Goldman.
Asset & Wealth Management
Traditionally, Morgan Stanley was very similar to Goldman – heavy on trading and investment banking advisory. However, post‑2008, Morgan Stanley shifted focus toward steadier revenue by building a massive wealth management arm.
Through acquisitions like Smith Barney, Morgan Stanley now manages trillions in client assets, producing stable fees. In fact, in 2023 its wealth and investment management divisions contributed about 58% of total revenues, marking a huge strategic shift.
Interest Income & Lending
This means a large portion of Morgan Stanley’s money comes from managing money for affluent individuals and institutions (earning that ~1% AUM fee, plus brokerage commissions and interest on loans to those clients).
What Sets Morgan Stanley Apart
To summarize, Morgan Stanley makes money through a mix of fee‑based wealth management (providing steady, interest‑like income) and high‑end investment banking and trading. This balanced model means MS can weather storms (the wealth side is stable even when trading or M&A slow down).
It’s often said that former CEO James Gorman “reinvented” Morgan Stanley into a wealth‑management powerhouse, making it less volatile. But make no mistake – Morgan Stanley still thrives on big deals and market activity; it’s just augmented by the cushion of managing rich people’s portfolios.
- Bank of America (BofA Merrill Lynch)
Bank of America operates a large investment banking division (branded as BofA Securities, formerly Merrill Lynch) alongside one of the nation’s biggest consumer and commercial banks.
Advisory & Underwriting
On the investment banking side, BofA earns hefty fees in debt underwriting and leveraged finance (thanks in part to its huge lending capacity) and is among the leaders in M&A advisory as well.
It often ranks top 3 in global debt and equity issuance volumes.
Trading & Sales
The trading arm (especially in fixed income) is also significant, though typically a bit behind Goldman or JPM in risk‑taking.
Asset & Wealth Management
Additionally, BofA has a sizeable wealth management arm (via Merrill Lynch Wealth Management) generating management fees.
Interest Income & Lending
Where BofA really stands out is the integration of commercial lending with investment banking: it will lend billions to a corporate client (yielding interest income) and in return often win the mandate to underwrite that client’s bond or stock offering (fee income).
The bank’s interest income from loans is a major revenue source – far larger than pure‑play investment banks – because BofA’s balance sheet is massive.
It gathers low‑cost deposits from its retail bank and can use that to fund loans and credit lines to big corporate clients, earning a nice spread.
What Sets Bank of America Apart
So, Bank of America makes money through multi‑faceted banking relationships: net interest margin from one of the largest pools of deposits/loans in the world, plus all the classic IB fee streams (M&A, underwriting, trading, advisory).
In a strong economy, this is very profitable (both loan demand and deal‑making flourish).
In a weak economy, BofA’s loan book might cushion or, conversely, credit losses could hurt.
But overall, its model of being a one‑stop shop (lend you money, help you raise capital, manage your investments) has produced one of the highest revenue totals in the industry.
- Citigroup
Citigroup (Citi) is another global bank with a significant investment banking operation embedded in a universal banking model. Citi’s strength historically lies in its global reach and fixed‑income franchise.
Advisory & Underwriting
Citi is a top underwriter of bonds worldwide – governments and companies around the globe tap Citi to issue debt, and Citi earns underwriting fees for those bond offerings.
It also has a solid M&A advisory unit (though generally ranked slightly below the JPM/Goldman elite in M&A league tables).
Trading & Sales
Trading is a big component: Citi has long been known for its prowess in foreign exchange (currency trading) and fixed‑income trading. So a good chunk of revenue comes from markets activities – trading currencies, bonds, commodities for clients and the firm’s own account.
Asset & Wealth Management
Citi’s consumer bank is large internationally, and it offers transaction services such as cash management and trade finance that produce fee income.
Interest Income & Lending
Like BofA, Citi also has a huge lending and transaction banking business (especially in emerging markets), so it earns interest income from corporate loans and hefty fees from transaction services (like cash management, trade finance) for multinational corporations.
What Sets Citi Apart
Citi’s global footprint also means it makes money by connecting investors and issuers across borders – e.g., arranging a bond in Asia, an IPO in Latin America, etc., taking fees in the process.
In summary, Citi’s model is global universal banking: it may arrange a $5 billion bond for a European government (earning a fee), facilitate currency exchange and interest‑rate hedges for that client (trading income), provide the client a loan or credit line (interest income), and even handle their cash management. All those services generate revenue.
Citi might not have the absolute top M&A fee ranking each year, but its breadth ensures it captures a lot of business in debt capital markets and international banking that others might miss.
- Wells Fargo
Wells Fargo is primarily known as a domestic U.S. commercial bank, but it does have an investment banking arm (Wells Fargo Securities) that’s meaningful, though smaller than the bulge‑bracket peers.
Interest Income & Lending
Wells makes the lion’s share of its money from interest income on loans – mortgages, business loans, credit cards – given its huge deposit base.
Advisory & Underwriting
It often acts as a lender and underwriter in syndicated loans, high‑grade bond issuances, and some equity deals, earning underwriting and advisory fees, typically for mid‑sized clients.
Trading & Sales
Wells also has trading desks, mostly flow trading to support client activity; trading is a smaller portion of revenue.
Asset & Wealth Management
Wells Fargo also has a sizable wealth management unit (Wells Fargo Advisors), contributing fee income from managing client assets.
What Sets Wells Fargo Apart
In essence, Wells Fargo’s investment banking business is an extension of its commercial banking dominance: it monetizes client relationships by offering capital markets services, and in doing so adds a nice fee kicker to its interest‑based income.
But compared to others on this list, Wells is still more bank than investment bank.
It makes money mostly from net interest margin (as a lender) and only secondarily from Wall Street‑style fees. This makes its earnings more stable but also less “high‑flying” in boom times.
- UBS
UBS, based in Switzerland, provides an interesting case study of an investment bank that pivoted to wealth management.
Asset & Wealth Management
UBS makes most of its money from its global wealth management franchise, serving ultra‑high‑net‑worth individuals.
Advisory & Underwriting
Now, UBS does have an investment bank, but after the 2008 crisis and a big trading loss in 2011, UBS deliberately shrank its riskier trading operations.
It focuses its investment bank on areas that support its wealth clients and Swiss corporate clients – for example, advisory on deals, and underwriting bonds/equities for corporate clients.
Trading & Sales
It still makes money from trading, especially equities and forex where UBS has market‑making strength in Europe and Asia.
Interest Income & Lending
It also earns interest income from lending to wealthy clients (margin loans, real‑estate financing).
What Sets UBS Apart
UBS’s model is high‑volume wealth management plus a client‑driven investment bank. It sells itself as a safe pair of hands for rich clients’ money and a top advisor for strategic transactions, rather than as a trading powerhouse.
With the integration of Credit Suisse, UBS might aim to modestly increase its IB fee share, but wealth management will likely remain its profit engine and identity.
- Barclays
Barclays is a major British bank that operates a transatlantic investment bank alongside its UK retail bank.
Trading & Sales
Trading and markets have long been a core strength for Barclays – it’s known for a strong fixed income, currencies, and commodities (FICC) trading franchise.
Advisory & Underwriting
It has a solid M&A and equity underwriting business, often ranking top 6‑7 globally, and participates in many U.S. deals thanks to its Lehman heritage.
Asset & Wealth Management
The bank also provides financing to clients, which supports its underwriting mandates.
Interest Income & Lending
The bank’s lending book isn’t as large as JPM/BofA, but it does provide financing to clients, generating interest income and helping win underwriting mandates.
What Sets Barclays Apart
Barclays makes money by connecting capital across the Atlantic: whether it’s arranging a bond sale for an American firm with European investors, or vice versa, Barclays is in the mix earning fees.
It tries to be a European answer to the U.S. bulge bracket, and largely succeeds in trading and debt underwriting, while playing a strong niche role in M&A.
- RBC Capital Markets (Royal Bank of Canada)
RBC is the largest bank in Canada, and through RBC Capital Markets it has built a reputable investment banking business internationally.
Advisory & Underwriting
In Canada, RBC dominates M&A, equity issuance, and bond underwriting. Internationally, it leverages expertise in natural resources and energy to win mandates.
Trading & Sales
RBC runs sizable fixed‑income and equity trading operations serving institutional investors.
Asset & Wealth Management
It also has a large wealth management arm, generating steady asset‑management fees.
Interest Income & Lending
RBC’s strong balance sheet supports corporate lending, which in turn secures fee opportunities.
What Sets RBC Apart
In summary, RBC makes money by being a big fish in the Canadian pond and a savvy player in select international areas. It’s a more conservative operator than U.S. bulge brackets (less likely to take huge trading bets), but that aligns with its culture as a regulated bank in a stable banking system.
- Jefferies
Jefferies is the largest independent investment bank in the U.S., focusing on Wall Street activities without a traditional retail bank.
Advisory & Underwriting
It focuses on investment banking and capital markets services without a traditional retail banking business, carving out a strong niche in mid‑market M&A advisory and in industries like healthcare, technology, energy, and leveraged finance.
Trading & Sales
The trading side of Jefferies is also notable – it runs sales and trading desks in equities and fixed income that serve institutional investors.
Asset & Wealth Management
It also invests some of its own capital in deals (merchant banking) and historically has an asset management arm.
Interest Income & Lending
Because Jefferies doesn’t have stable deposit funding, its cost of capital can be higher; thus it focuses on fee businesses and quicker trade turnovers rather than holding large loan portfolios.
What Sets Jefferies Apart
Jefferies’ independence allows it to avoid some conflicts. In short, Jefferies makes money by hustling for deals and trading commissions in the cut‑throat investment banking market. It’s like a smaller, more nimble version of a bulge bracket.
- Raymond James
Raymond James is a financial services firm strongly focused on wealth management and retail investors, with a growing mid‑market investment banking arm.
Asset & Wealth Management
About two‑thirds of revenue comes from the Private Client Group, which manages portfolios and charges fees and commissions.
Advisory & Underwriting
The other side of Raymond James is its Capital Markets division – essentially a mid‑tier investment bank. Here, it earns M&A advisory fees and underwriting fees primarily for middle‑market companies.
Trading & Sales
Additionally, Raymond James underwrites municipal bonds and other debt through its fixed income arm, earning underwriting spreads and trading profits in muni and corporate bonds.
Interest Income & Lending
Raymond James Bank provides loans funded by client cash balances, generating net‑interest income.
What Sets Raymond James Apart
Raymond James’s model is often described as “Wall Street + Main Street.” It generates steadier income from advising millions of individuals on their investments, and supplements that with deal‑based income from corporate clients.
- Truist (Truist Securities)
Truist Financial is a large U.S. regional bank formed from the 2019 merger of BB&T and SunTrust.
Interest Income & Lending
Truist’s overall business is heavily weighted to traditional banking – taking deposits and making loans
Advisory & Underwriting
Truist Securities makes money by offering investment banking services to the bank’s corporate client base, primarily through underwriting and advisory fees on mid‑sized deals, and through syndicated lending fees.
Trading & Sales
Truist’s investment bank engages in fixed income sales & trading, largely to distribute the debt it underwrites and to serve institutional clients in its region.
Asset & Wealth Management
The bank provides treasury management and other services that generate ancillary fees.
What Sets Truist Apart
Truist makes money by being a full‑service bank to mid‑sized companies – loans, advice, capital markets all in one. The investment banking fees are smaller than its net interest income, but strategically important for growth and client retention.
- Stifel Financial
Stifel is a mid‑sized investment bank and wealth‑management firm, often grouped among top regional brokers.
Asset & Wealth Management
Global Wealth Management typically contributes about half of revenue, delivering stable fees and commissions.
Advisory & Underwriting
On the investment banking side, Stifel has aggressively grown by acquiring boutique advisory firms and hiring bankers from bigger firms, focusing on middle‑market M&A and public equity offerings.
Trading & Sales
Beyond deals, Stifel’s Institutional Group has an active broker‑dealer business – providing equity research and executing trades for institutional investors.
Interest Income & Lending
Stifel also has a bank entity that provides loans, often mortgages or securities‑based loans to its wealthy clients, generating interest margin.
What Sets Stifel Apart
Stifel makes money by catering to the financial needs of the under‑served middle: mid‑sized investors and mid‑sized companies.
By taking care of these clients, Stifel turns a profit through cumulative fees and commissions.
- Cantor Fitzgerald
Cantor Fitzgerald is renowned for its bond‑trading heritage and remains trading‑centric.
Trading & Sales
Cantor makes money by providing market‑making in various securities – U.S. Treasuries, government agency bonds, mortgage‑backed securities, corporate bonds, etc.
Advisory & Underwriting
In recent years, Cantor Fitzgerald has also expanded into investment banking advisory and underwriting on a smaller scale, including a notable presence in SPAC IPOs.
Asset & Wealth Management
An asset‑management arm sponsors real‑estate and investment funds, bringing management fees.
Interest Income & Lending
Because it’s not a bank, Cantor doesn’t have deposits or a loan book; any financing revenue comes from securities lending or margins on funding client trades.
What Sets Cantor Apart
Overall, Cantor’s profile remains one of a trading‑focused firm: it profits by facilitating trades and capturing spreads, with advisory and asset management providing diversification.
Closing: Why Investment Banks Make So Much
In summary, investment banks earn huge revenues by taking tiny margins on gigantic transactions. If you charge even 1% on a $10 billion deal, that’s $100 million in revenue from one transaction.
Do that a dozen times a year, and you’re at a billion. Scale is the key: large clients and big deals mean a little fee percentage turns into a lot of money.
Speed and trust also matter, big companies pay handsomely to get a deal done quickly and correctly.
As Britannica aptly puts it, “Capital gravitates to where it’s treated best. Investment banking provides many of the essential functions that ‘treat capital well.’”
In other words, if Wall Street is the engine of capitalism, investment banking is the high-octane fuel powering it forward.
Investment banks may seem mysterious, but at heart they exist to help money find its best use.
By advising companies on strategic moves, enabling big financings, and supporting investors, they keep the wheels of business and innovation turning.