How Goldman Sachs, JPMorgan & Morgan Stanley Make Billions (Explained)

Q1 2026 delivered one of the strongest quarters on record for the major investment banks and in this episode, Debs and Graham break down exactly what drove it. 

Starting with the headline numbers at Goldman Sachs, JPMorgan and Morgan Stanley - nearly $90 billion in combined revenue, up 12% year on year. 

They unpack why this quarter was unusual: all three core revenue engines fired simultaneously, something that rarely happens.

The conversation moves through each division in turn. 

On the M&A and ECM side, fees were up 40% year on year, with Graham making the case that pent-up demand is driving a deal pipeline that could make 2026 a record year. 

Trading revenues across the top five banks came in at nearly $50 billion. 

A figure that surprised even seasoned market watchers, with Debs explaining why volatility, not bull markets, is the real trading revenue driver, and why JP Morgan, 

Goldman and Morgan Stanley each benefited for very different reasons. 

Wealth management, meanwhile, posted quieter but resilient growth on the back of significant asset inflows.

The episode also doubles as an investment banking primer. 

With Debs fresh from teaching spring week programmes at major banks, she and Graham walk through how the different divisions are structured, what each one actually does, and what a career in each area really looks and feels like.

They close with the central question: is this a one-quarter spike driven by exceptional market conditions, or the beginning of a sustained recovery for investment banking?

Key Discussion Points:

Q1 earnings overview: combined revenues, growth rates and why broad-based outperformance across all divisions is unusual. 

M&A and ECM recovery: what's driving the 40% fee growth and whether the pipeline supports continued momentum. 

Trading revenues: why volatility is the key driver, and how JP Morgan, Goldman and Morgan Stanley each captured it differently. 

Wealth management: steady asset inflows, fee growth, and why it matters more than the headlines suggest. 

Investment banking divisions explained: ECM, DCM, M&A advisory, and the difference between markets and banking roles. 

Career insights: work culture, skills, deadlines, and how to think about which part of the bank suits you. 

Outlook: sustained recovery or short-lived spike?

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Transcript

SPEAKER_00 0:00

We're just seeing seeing just insane, insane volumes come through these banks right now.

SPEAKER_01 0:04

JP Morgan, Mummy's Danny, Gomer Sachs, Bank of America and the City. What do you think their combined trading revenues were?

SPEAKER_00 0:09

JP Morgan, a bit more balanced in terms of MA, in terms of corporate banking.

SPEAKER_01 0:15

Their trading revenues for equities were up 30% year on year.

SPEAKER_00 0:19

When we talk wealth channel, we're not necessarily talking about, you know, money managers and mutual funds. There's a lot more interesting stuff that these banks do as well.

Episode intro: What's the Big Deal?

SPEAKER_01 0:28

Has anything been exciting been happening as quarter in wealth management? Hello to all our listeners, and welcome to this week's episode of What's the Big Deal, where we take a look under the hood of major deals in the public and private markets and explore finance industry developments. My name is Deborah Taylor, and I'm going to use my experience from my career in investment banking to bring insights from a public

What Debs and Graham have been up to this week

SPEAKER_01 0:50

markets perspective.

SPEAKER_00 0:51

And I'm Graham Smith, and I'll use my decaded private credit investing experience to bring the private market perspective here. So, Debs, what's what's new with you this week? What's been going on?

SPEAKER_01 1:01

Yeah, it's a great question. I've been really busy this week. I've been teaching. I've been teaching at spring week programs at lots of investment banks and asset management firms. So that's been really interesting, really fun to meet the next generation of analysts. How about you, Graham?

SPEAKER_00 1:18

Uh I've been busy. I'm I'm traveling, we we travel a lot. We're on the road teaching. I'm actually in Abu Dhabi right now. Uh before before I left. I think everyone was having a big freak out, just saying, are you are you crazy for going there right now? And actually, it's been it's been great so far. So I'm here for five weeks. I'm training at one of the big sovereign wealth funds here. Uh it's a great, it's a great group, great office. So so far it's been a lot of fun. Um and it's kind of honestly, Abu Dhabi feels a little bit like LA in terms of lifestyle where I'm from. So it's it's kind of an easy transition.

SPEAKER_01 1:52

Gosh, that's amazing. Really interesting that you're over there. Um yeah, so you feel safe?

SPEAKER_00 1:58

I do, I do. Although, I mean, well, I think this episode will come out in a few days after we record. Everyone in the office today was talking about the fact that the the ceasefire technically expires, I want to say tomorrow night. So we'll see, we'll see what happens. I mean, we'll probably know what happens by the time, by the time this actually goes up. But talking to everyone from last time, it was it was kind of an annoyance rather than anyone feeling really, really worried. But right now it does very much feel like business as usual. Everyone's in the office, everyone's out and about. Honestly, until today, I hadn't even thought about anything since I've been here. So just keep my fingers crossed that that setup stays through the next next month anyway, while I'm still out here. But so far it's been a lot of fun.

SPEAKER_01 2:42

Gosh. Um and actually what you're talking about, what's going on in the world, is obviously uh having massive effects on the uh public markets, well, the markets in general. Um, so maybe a little bit of relevance to our

This week's big deal: Q1 bank earnings

SPEAKER_01 2:54

discussion today.

SPEAKER_00 2:55

Yeah, I mean, I'm sure we'll talk, we're gonna talk about bank earnings today. I mean, we'll talk about what the big deal is in a second, but you know, volatility is gonna play into that a little bit. So, yeah, living, living and breathing that every day or real time right now, anyway. So big deal this week is all the investment banks posted their Q1 results. And it's probably not gonna be a surprise to anyone given what we talked about, I guess, a few a few episodes ago, talking about a record, record-breaking MA. We've been talking about some of the big IPOs coming down the pipe this quarter and this year. So, spoiler alert, it was a great quarter for investment banks. So we're gonna get in a little bit to the detail of some of the results. Take an opportunity to talk about what investment banks actually do, especially for anyone who is looking to get in the recruiting cycle and wants to up their knowledge a bit more about you know what ECM is, DCM, capital markets, all that, all that good stuff.

SPEAKER_01 3:49

Oh, I think there's an acronym alert there as well. So we have to make sure we uh deal with those acronyms. Um but yeah, definitely this is going to be um a little deep dive into bank earnings for Q1, which was uh one of the best quarters ever for investment banks. Um, in terms of what we'll cover, first of all, we'll do uh a little bit of unpacking of the Q1 earnings, what was strong, what's what's surprised, and how this links to the macro impact drop because there's been so much happening in the in the world in uh Q1. Uh secondly, we're going to use those results as a lens to explore the different parts of the investment bank and how investment banks make money. And finally, we'll answer the key question is this a return to sustained grade for investment banks, or is this just a short-lived spike? Now it's very topical that we're doing this. As I mentioned just at the beginning, I've been attending spring week training where we do quite a lot of technical training for people just at the even, you know, just at university who are exploring potential careers in investment banking, and we spend a bit of time explaining the different moving parts of an investment bank. So if you have been attending a spring week training session, then this is definitely the episode for you where we'll take a bit of a deeper dive and also, as I say, look at the numbers as well. So let's kick off, Graham. Let's talk a bit about Q1. Um, I'll start with a bit of an overview and then um it would be great to hear your

The headline numbers: $90 billion combined revenue, up 12% year on year

SPEAKER_01 5:07

thoughts on that as well. Um, I think the main headline is that Q1 was quite extraordinary in terms of uh the numbers. I think the main investment banks, the three main ones, uh JP Morgan, Morgan Stanley, and Goldman Sachs, together they had combined revenues of just under $90 billion. And that's just for one quarter. So that's really impressive. Yeah, I know. And that's 12% up on last year. So um, it is significant uh improvements uh on last year. Um but I think really what makes this a standout quarter is that this wasn't just outperformance on one part of the investment banks, it was actually across all divisions. There's three main engines, if you like, for generating revenue. We've got investment banking fees, trading revenues, and also wealth fees as well, so the wealth management fees. So across all the areas of the investment bank or the main areas, they did really well. And that's quite unusual because what tends to happen is you'll get outperformance in one area and then underperformance in another area, depending on the market conditions, and they kind of yin and yang kind of against

M&A and ECM fees: up 40% year on year — weak comps or genuine recovery?

SPEAKER_01 6:13

each other. Um whereas this time we had results where we had really strong performance in all the main areas, so we definitely need to take a bit of a dive into why that is. So a few data points for you trading performance, really exceptional, 20% up year on year. If you look at the three main investment banks, we've got recovery in MA and also capital issuance, and the fees from that were 40% up year on year, and then we've got really robust growth in wealth management from huge asset inflows, and their revenues were up 10% year on year. So let's start off with the biggest improvement, which was in terms of the recovery in MA and capital issuance, which was 40% up on their fees from last year. Um, so Graham, the analyst in me wants to know first of all, what's driving that, but also whenever we see really amazing revenue growth, the question I always ask myself is well, hang on, is this flattered by really soft numbers from the previous year? You know, are we starting from a really low base or what we used to refer to as weak comps, or is this genuinely really amazing performance?

SPEAKER_00 7:22

I mean, it seems like it seems like it's a bit of both, right? I think uh a year ago in terms of MA volume, MA deal fees, we were at a particularly, particularly low point. Obviously, we're at a really, really high point right now. So I think it's both, it's both starting from a slightly lower base, but also just volume last quarter was just incredibly, incredibly strong. So we talked about some of the some of the big deals that are really driving that, that mega, that mega deal pipeline. Again, I think it's still this tail of two halves a little bit. You've got the big banks working on the mega deals that are just doing insanely well. And those mega deals are driving, they're driving advisory, advisory fees, they're driving equity capital markets fees when you're underwriting, when you're underwriting equity issuances. Obviously, we've got some big IPOs coming down, coming down the pipe as well. So I'm expecting we'll see some of that continuing in Q2, Q3, whenever SpaceX, Anthropic, OpenAI actually, actually get to market enlists. So it looks like it looks like we're both at a really, a really strong point right now. And I can see, I can see there being some some tailwind still in terms of I don't think we're I don't think we're through this backlog of MA that we had talked about a few weeks ago. You know, I think what had happened is everyone had really pushed the pause button on on MA and deal doing, and that kind of that really helped dampen that that starting position kind of low base we're starting from. And everyone's just just kind of said, hey, we can't wait on the sidelines forever. Obviously, we're in turbulent markets right now. There's a lot of uncertainty, but ultimately we just need to get deals done. And we're gonna take a view on some of the some of the things that are making deals a little bit easier right now in terms of a perceived, you know, easier regulatory framework, at least in the US, and just say, hey, let's let's push through and get as much of this done as we possibly can. So I think we're just seeing we're seeing just insane, insane volumes come through these banks right now. And to your point, it seems like it's it's kind of coming from all directions right now, which is not not often the case.

Is this just the start of a record-breaking year for deal fees?

SPEAKER_01 9:33

And you mentioned actually, it sounds like from what you're saying about the pipeline, that this is actually just the start of what could be a record-breaking year in terms of deal fees. But there's plenty more to come. It's not just all all you know, one and you're done in Q1.

SPEAKER_00 9:49

Yeah, quite possibly. I mean, just based on the stuff that that we know about. I mean, obviously, I don't know, I don't think many of us know too much about the upcoming MA pipeline because that's that's private until it's not, right? We know what the publicly announced stuff is right now, what what happens the rest of the year, like who knows? We do have these big IPOs that are coming. That's gonna be great for equity underwriting fees across the banks. Just given the size of so many of these deals, it's not like it's gonna be one one book runner for any single one of these IPOs. So I can see this being just a really, a really great year to be a banker, especially if you're a banker at one of the at one of the big bulge bracket firms. Um we'll see, we'll see how the year pans out in terms of the the kind of mid-market and and smaller size deals as well. Like I said, we've we've really been seeing the mega deals, what's driving, what's driving volume right now in Q1. I don't I don't think I have a view yet in terms of how that how that plays out the rest of the year. I don't I don't know if you do either yet. I think it's kind of kind of tough to tell yet. Um, but certainly you're if you're at you know, Goldman, JP Morgan, Morgan Stanley, you're probably feeling pretty good about life right now.

SPEAKER_01 11:00

Yeah, it's interesting when you asked about, you know, if I have a view. I think I'm genuinely surprised by how strong deal flow has been, just because when the markets are so jittery and we've had very jittery markets for a whole host of reasons. Um it's unusual to have this really strong performance in deals. And as you mentioned, it's kind of really just a reflection of the pent-up demand rather than this being, you know, the natural sweet spot for when you know the timing of when deals usually can

Investment banking divisions explained: M&A, ECM, DCM and LevFin

SPEAKER_01 11:26

take place. Um I think also, um so you mentioned a few acronyms, ECN, DCM, I know also other parts of investment banking which have unusual names like Left Thin. Can you just elaborate on what the different parts of investment bank do and how they kind of contribute to the fees?

SPEAKER_00 11:43

Yeah. So I think the the easiest one to understand, I think, for most people is probably MA, where well, maybe it is, maybe it isn't. I don't I don't know, where you're you're providing, you're really providing advice to people. You're providing some valuation advice, you're providing services to actually get the deal done. You're facilitating the transaction, brokering a deal, you know, facilitating between buyer and seller, and you are getting paid, in essence, a in essence a success fee for uh for getting that deal done. It's not all a success fee, but that's that's the majority of the of the fee pot. That's why when you see so much deal activity, you see these record-breaking MA fees. Then you have the parts of the bank that help these companies not just not just merge with one another, but access the capital markets and raise capital. So ECM or equity capital markets, this will be the side of the business that is working on, say, SpaceX, Anthropic, and OpenAI's IPOs, underwriting the equity, running the books, and actually bringing these public companies to market or private companies to the public market for the first time. So DCM or debt capital markets, you're generally helping investment grade companies raise debt finance. So think think bonds, like investment grade bonds as a as a as a particular point there. Contrast that with leverage finance or lev fin, which is really what what I used to do, where you're still you're still in the debt capital markets, but instead of the traditional investment grade bonds, you are more in the high yield space. So you know, think traditionally called junk bonds. Like I just still kind of hate that name, but higher yield, higher leverage, higher risk, that's what that's what the lead fin business in these banks tends to do. So those all those businesses all fit together to to really to really facilitate these uh these kind of record-breaking fees we're seeing.

SPEAKER_01 13:40

And is it fair to say then that the ECM and DCM teams, they're much more focused on the public markets, left fin, it's much more exposed to what's happening in the private markets. And if that's right, then how does that kind of play into what we've been seeing on the on the deal flow side?

SPEAKER_00 13:58

I would say that's that's generally true, although it's not like, I mean, let's take let's take the lead fin team at an investment bank. It's not like it's not like all these loans are completely private. Like a lot of a lot of what these teams will be doing is of course underwriting, underwriting loans and then distributing. A lot of these, particularly big deals on the on the lead fin side, still have at least liquid or semi-liquid, liquid loans to get traded around the market. So I think the this is probably a deal that was in the books last year, but the the big EA underwrite, I think was what maybe like the biggest, the biggest lev-fin deal basically ever. Like I think a lot of that, a lot of that debt as an example will be, will be somewhat liquid. So, you know, really on the on the credit side, we're really talking about the the type of borrower necessarily rather than uh rather than whether something is public or private. And then of course you have you have the investment bank, investment bank kind of led fin teams, and then you have more mid-market private credit, which is what I used to do. So you know, you got all kinds of all kinds of stuff outside the the core investment banks, but investment banks are generally focused on those, on those kind of big, big underwrite deals.

SPEAKER_01 15:13

Just looking across the major investment banks, that's JP Morgan, Morgan Stanley, Goldman Sachs, I think they all had pretty good quarter in terms of their fees. But any big takeaways that you want to

Fee breakdown: Goldman, JP Morgan and Morgan Stanley compared

SPEAKER_01 15:24

highlight there?

SPEAKER_00 15:25

Yeah, let's see. Let me just look at my look at my notes here. I mean, so if you want, if you want kind of the pure play example that like MA is really back, look at Goldman, right? They're always kind of top of the league tables. Their their advisory fees this quarter were up 89% year on year. I mean, that's just that's just insanity. I mean, they were they were up across the board. They took, they took a little bit of a hard time for missing some estimates on their fixed income side, but that was still up, right? It's just up everywhere. Um, so they're you know really, really focused on on MA. JP Morgan, a bit, a bit more balanced in terms of in terms of MA, in terms of corporate bat, corporate banking, in terms of lending. I mean, obviously, we also know JP Morgan from the consumer banking business. It's big, it's it's diversified. You know, we'll talk a little bit around how a lot of these banks are looking to diversify and smooth out some of these earnings. Because the the the flip side to investment banking fees being back and up in a big way right now is there's no guarantee that's gonna be the case in in another year. So, you know, kind of something we'll talk about in a few minutes. Uh Morgan Stanley also up. I mean, Morgan Stanley has done an incredible job as well on the on the wealth channel. And again, something I think that a lot of these banks are looking to add more of just because it provides a bit more of a stable revenue stream, unlike these advisory fees that are really just dependent on MA volume.

SPEAKER_01 16:54

Okay, Graham,

Trading revenues: the $50 billion question

SPEAKER_01 16:55

I've got a challenge for you. Um trading revenues across the biggest five investment banks, that's Jopy Morgan, Morgan's Dani, Goldman Sachs, Bank of America, and City. What do you think their combined trading revenues were?

SPEAKER_00 17:07

Wait, well, okay, what was our stat from the very beginning that you opened with where you're like in Q1, the combat was it combined revenue for was the top three investment banks in total across everything?

SPEAKER_01 17:18

All their revenue streams was just under $90 billion.

SPEAKER_00 17:21

Just under $90. Okay. All right. So let's take take half that, take, I don't know, $45, $50 billion.

SPEAKER_01 17:29

Yeah. Pretty good actually, Graham. Yeah, it was just under $50 billion. But that is impressive. That and that was a big surprise across the streets. And in fact, probably the biggest surprise in the results of just being reported by the investment banks. And I think part of that is although we know that things like market volatility, which we have definitely had in Q1, they do contribute to good trading revenues. Um, but they are very um, it's very hard to predict trading revenues and notoriously difficult to build real expectations around. So I think the market knew they would be good, but not quite how good they were going to be. So it was a big surprise. And I think there are three key drivers of the volatility that we've seen in the markets. Uh, we know that there has been um AI disruption fears, we've had the AI scare trade, and that's been you know a really big impact, particularly on the equity markets. We've had obviously geopolitical tensions causing you know, widespread concern around what's gonna happen, but also that then bleeds into concerns around uh the rates environment. So if you have concerns around inflation because of oil prices, then that then leads to concerns that interest rates are going to go up to counteract that inflation risk.

Three drivers of Q1 volatility: AI fears, geopolitics and rates

SPEAKER_01 18:47

So all of that combined has created so much volatility in the markets. And you know, if you're managing money and you're positioned, you know, you have a portfolio that reflects certain expectations, well, all of those events could really cause you to, you know, change your view. And that means you have to change your positions, that means you've got to trade. Who benefits from that? Well, it's investment banks because they are the they're basically the market makers, they're the ones that you know facilitate that trading activity. So it's led to just the most amazing set of trading revenues um across the street. But I think what's really interesting is actually you see different banks benefiting in different ways from you know the market conditions. Let me explain what I mean. If we start off with JP Morgan, um they dominate uh in terms of their fixed income trading, their revenues for fixed income trading were up 20% year on year. Um and as I mentioned, that's a huge amount is due to their interest, you know, interest rate uncertainty. You know, if you're expecting a certain rates environment and that completely pivots during the quarter, then so much trading activity happens off the back of it. So for JP Morgan, the story was about fixed income trading. Whereas for Goldman Sachs, less so, in fact, they didn't do so well on the fixed income trading side, but actually they did really well on the equities trading side. It was a standout performer for them. Their trading revenues for equities were up 30% year on year. Now, Goldman Sachs is really well aligned uh with hedge funds. They are you know one of the leading prime brokers, and you know, there's been a huge amount of hedge fund activity. You know, hedge funds you know go a bit crazy when it's volatile markets, they you know, quick movers and do lots of trading then. So they've really benefited at Goldman Sachs from that, um from that side of things. And then Morgan Stanley, again, they've also done very well, but again, on the equity side, it was their equities training that was very strong, um, but for very different reasons for Goldman Sachs. Um, and as you mentioned earlier, Morgan Stanley have a very strong presence in wealth management, also institutional trading as well. Um, so as you can see, although they've done all three main banks have done very well on the trading side, it's really for quite different reasons. I think the other thing I would just highlight, and maybe a bit surprising if you're kind of new to analysing banks, is the fact that it is volatility in the markets that really um enhances trading revenues. It's not um, you know, you might assume that it's when the markets are booming uh that that's when lots of trades happen. It's not. It's when there's actually lots of uncertainty that people are having to change their positions and therefore conduct lots of trades.

Post-GFC regulations: why banks no longer trade with their own money

SPEAKER_00 21:25

Because this is, I mean, we're we're not really, I guess, in the same world we were in in pre-2008, where these banks had huge prop desks and were taking taking massive positions with their own balance sheet. Right. This is really on the on the trading side, we're really talking about facilitating trades, you know, making making markets, you know, acting as prime brokerage for hedge funds, you know, that that kind of thing, rather than you know, they're making giant profits because they've taken a huge risk position and and just made a crazy return when markets have gone up.

SPEAKER_01 21:58

For sure. The regulations can Completely changed after the global financial crisis. They aren't trading with their own money, sort of making their own profit. When they're market making, it's usually the thing that we refer to as match principle trading, where they do take the risk themselves. They buy shares or buy uh bonds to then sell on to a counterparty. So they're taking that risk, but it's a brief risk. They're not going to sit on that, on their own book, on their own balance sheet for an extended period of time. So yeah, it's all about volatility in the markets that's uh creating this boom in their trading revenues. And whether that will persist, well, that's really you know the big question that none of us can answer. It depends on what's going to happen with geopolitics. Um, it seems very much like the AI trade is still playing out. We'll see where that's gonna go. So um, yeah, who knows, you know, where where things will go, but definitely it sets up, you know, uh the banks for a very strong year uh in terms of the

Wealth management: the quiet outperformer

SPEAKER_01 22:57

trading revenues.

SPEAKER_00 22:58

Yeah, I was to say that I guess that that kind of leads us on to on to the last, the last kind of pillar. If we have, we have general investment banking and trading. Now we'll talk about wealth management, which I feel like is kind of the I don't know, we never we never used to talk about that very much in the context of investment banks. I mean, certainly when I was starting out, I mean, in Italy a long time ago now, I started in 2005. Like, we're old devs. Like, what are you what are you gonna do?

SPEAKER_01 23:26

We are old.

SPEAKER_00 23:27

When I was right, when when I was starting out, no one really talked about wealth management too much, certainly at these banks. Most of the banks had some kind of wealth management division, but it was never, it was never much of a focus. I feel like that's that's changing quite a bit these days. I mean, look like Morgan Stanley's a really good example of that, and he's probably always been the front runner in the in the wealth management space. I mean, I was even thinking back to you know days, days at Aries when uh you're raising, you know, raising closed ends, closed-end investment funds, but like one of the one of the vehicles that we raise money through was like a Morgan Stanley feeder. So, you know, really when we talk when we talk wealth channel, we're not necessarily talking about you know money managers and mutual funds. There's a lot more interesting stuff that these banks do as well. And really, and really works with the other, with the other sides of their business, right? Kind of introducing, introducing you know, wealthy individuals into other deals the banks are working on, private capital transactions. It's not just, it's not just the kind of vanilla stuff that a lot of people tend to think about. And I think the reason that the banks are so interested in this kind of revenue is it tends to be a lot more, a lot more stable, right? You've got an individual who who parks, I don't know, a few million bucks at one of these banks. They get their management fees, uh, they're getting fees every time, every time these individuals trade as well. Uh, and it just it helps to round out what can be some some more volatile, more volatile income streams from things like MA, where this really depends on MA volume. Um and yeah, I think you have you have kind of a a corresponding feature in the asset management world as well, where you've got management fees where you look at when you value an asset manager, you place a much higher multiple on that fee income because it's a lot more stable and recurring than you do on the on the performance fees, um, you know, the the carried interest, because you just don't know where that's gonna where that's gonna go. I think the wealth management channel for banks is kind of the same. It might not be as big or as sexy, but in terms of the the quality of the income stream, they're pretty, pretty high because it's pretty reliable. Um, so I think we're seeing that as a much bigger focus for a lot of these banks, you know, certainly these days, compared to 20 years

New products and the private markets opportunity in wealth

SPEAKER_00 25:48

ago.

SPEAKER_01 25:48

So, Graham, you're already selling it to me here. And that and I know it hasn't really been grabbing any headlines, wealth management. You're making it sound really boring. You said it's not even sexy. So um you mentioned the high quality revenue streams. Is that all that sort of is attracting the investment banks here, you know, is the fact that there's kind of this slow and steady kind of, you know, the thing of the hare and the tortoise, it just keeps plodding along, generating revenues? Or is there something exciting? Has anything been ha exciting been happening this quarter in wealth management?

SPEAKER_00 26:16

Well, I think there's there's there's more than just the there's more than just the the kind of stable management fees. I mean, they're they're genuinely, I do feel like they're genuinely inventing new products in the wealth channel and really bringing wealth investors more into more into say the the markets I used to be in where you would historically only ever raise institutional money. So you go to pension managers, sovereign wealth managers, um, you wouldn't, you'd never even think about accessing the wealth channel. And you've got to have different, different structures and different vehicles to cater for the demands and interests of people in this channel. And I think some of these banks are doing this pretty successfully. Again, I think Morgan Stanley is kind of the standout example of that. Um, so I'd expect to see more of that from the banks over the coming quarters and years for sure.

SPEAKER_01 27:05

Yeah. And I did read that there have been some inflows uh into, you know, to wealth management. And that's really kind of boosted their fees this quarter, hasn't it?

SPEAKER_00 27:15

Yeah, indeed. I mean, especially in I mean, you also, I mean, I don't know, I I'd imagine in times of volatility, like who do you, if you've got money to manage, who do you go to trust? Like one of these big, one of these big investment banks, maybe they're gonna charge a little bit more than than someone smaller, but you're probably you're probably in fairly safe hands. So, you know, it's not, it might not be the the sexiest side of the business, but it's it's definitely it's definitely one for these banks to uh to grow a little

Career opportunities: what record earnings mean for hiring

SPEAKER_00 27:46

bit.

SPEAKER_01 27:46

Yeah, interesting. So I guess we've talked through um the kind of the main takeaways from the um from the earnings. Uh anything you want to highlight uh around kind of roles and sort of career uh opportunities within these different parts?

SPEAKER_00 28:04

Oh, let's see. I mean, it seems like, well, look, when when things are when things are good and there's and there's money going around, then in theory, in theory, demand for analysts for new jobs is gonna be higher than higher than normal. So, you know, let's let's hope if you are, if you're in the position where you're looking for a job coming out of school, that going into recruiting, recruiting now is, you know, in theory, uh, in theory, a pretty decent time. Like I don't have, I don't have a view into the actual recruiting pipeline of any of these banks, but just on the basis that things are busy literally across the board, like now is a now's an interesting time to get involved. And then, I mean, in terms of, I don't know what you think, Debs, in terms of where where you want to sit at at each one of these banks, like what kind of team you want to be in, a lot of that just depends on, depends on your your personality and what you find, what you find interesting. Like, do you find, do you like the do you like the the chase on the deal? Do you find that kind of environment, environment interesting, then then M ⁇ As for you? Are you way into the public equity markets, then ECMs, same thing with the credit markets for for DCM? I don't know so much, I don't know about you, so much about finance, I think, is just what you're personally wired to wired to gravitate to and to like. And that's that's how I always think about you know what what kind of job to go for.

Trading floor vs. M&A: work culture and what it's really like

SPEAKER_01 29:22

For sure. I mean, when I'm uh talking to uh people at Spring Weeks, for example, I talk about how important it is that you understand the different roles um and the different skills required in, you know, and and and kind of as you mentioned, the different the nature of the roles means that the actual sort of work, you know, the the work-life balance, uh, the way that you know the role that you play is going to be so different. You know, you'll might be, you know, thinking about going into investment banking in quotes, but actually if you're working in the markets division, that's we often talk about that being quite buzzy, lots of news flow, you need to be able to respond very quickly to new information. Uh whereas if you're working in investment banking, it can be very high pressured, very deadline driven, but maybe more like working in a library where it's very quiet and focused. Um, and that, you know, you know, I was on the public market side, I quite like a buzzy environment. You're on the private market side, maybe, you know, you like a bit more of a library. Um, but that's we it's quite important that you think about the.

SPEAKER_00 30:24

I wouldn't I wouldn't call it a library, but okay.

SPEAKER_01 30:28

But it's but it and also, but you know, your attitude to deadlines, I'm not great with those. You're probably better at them than I am. Um but it's just things like that.

SPEAKER_00 30:36

I still work well under pressure, though. I'm a procrastinator, yes. I mean, that's just but that's just been me forever. So you're an essay crisis person. Oh, yeah. Yeah, 100%. One thing I will say is like if you're if you're coming into coming into this field now, I feel like most of you have it better than we did. I I feel like everyone probably says this at some point, but everyone I know, just talking to talking to analyst associates I've trained with investment banks or people who have moved on from investment banking into private equity, private credit, whatever else, has generally said that things have gotten a little bit better in terms of work-life balance. So I do feel like all those initiatives that that banks have undertaken to make life slightly better for people seem to have seem to have done something anyway. Not gonna say you'd be leaving your desk at five or six every day, but maybe not till two in the morning, literally seven days a week. I mean, I don't think my literally the first year I started working at Lehman Brothers, and I guess we I can we can talk all the crap about Lean we want, because they're they're gone, right?

Graham's first year at Lehman Brothers

SPEAKER_00 31:39

Like, I don't think I had a single day off my entire first year. Like, literally, literally, like no weekend days. I didn't take a single vacation. It was it was pretty bleak. Actually, moving to London was was way better because you got on the European vacation schedule and got like actual five weeks of vacation. And yeah, you work like crazy when you're in the office, but people were still okay with you taking a break every once in a while. Like that was that was not the case at at Lehman in in the US anyway. So I don't miss those days.

SPEAKER_01 32:12

I definitely think there's a difference between markets and investment banking because markets are just so tied to the markets. Uh, you know, you definitely you know sometimes you have to stay late to finish the research note, but you just don't have those deadlines. Um, the flip side is you know, never get too attached to a holiday that you planned because you know you could be planning to go away, and then suddenly there's some news flow, and then that just blows your vacation plans out of the water. Um, so they kind of are trade-offs, um, and definitely there's geographical differences. I know sort of you know, sort of vocational allowances different in Europe versus the US. Um, so there are some there are differences there. Um, but I think the number one thing that I always try and highlight to junior analysts or to Spring Leagues students is the importance of just feeling passionate about finding out more about the companies. We've done a lot of kind of big company analysis along that alongside ideal dissection. And I think that reflects

Final advice for anyone recruiting into banking right now

SPEAKER_01 33:11

the fact that both of us are quite interested in what companies do, what their business models are, and how that drives the numbers. And that's so important because you know, if there will be times when you're working until 2 a.m. And you don't mind that so much if you're actually interested in what you're doing. I I can only imagine it's quite painful if you're doing it and you just find it utterly boring. So that sense of you know finding it interesting is so, so important.

SPEAKER_00 33:35

Yeah, no, but tell anyone's out recruiting right now. Well, good good luck, and hopefully, hopefully all this activity just means it's a good time to be looking for a job or looking for a job in this world right now.

SPEAKER_01 33:46

So I think that's it for today's episode of What's the Big Deal? And if you enjoyed our dive into Q1 bank earnings and our exploration of roles in investment banking, please do uh like and um leave us a rating. And if you're watching us on YouTube, please do like and subscribe and leave us a comment. So until next week, and at the same time, a new deal and some fresh insights for myself and Graham.