Relationship Banking

Clients frequently use the same investment bank for advice on different deals, even in very different areas of expertise. Maintaining such relationships might be costly to investment banks as they have to maintain a workforce that has sufficient capacity to work on the requirements of their clients, while it is not known if they are actually requiring any advice and in which area. Hence, investment banks might run staff levels that are at times too high and who could work on other deals to generate additional income, while at other times staffing levels might be too low to work on all the deals clients seek advice on. This would require staff to work long hours, which is compensated by investment banks with high salaries, adding to their costs.