How Investment Banker, Corporate Bankers, Lawyers, Consultants, Private Equity guys, Traders… see the world?

When one of my good friends recently mentioned to me that his perception of the world changed after he worked for 10 years with a large insurance firm, I began to ponder how widespread this type of perception shift is in working adults. Specifically, he stated to me that he gained a significantly broader understanding of the global economy after starting to work in the insurance industry. For example, he failed to realize how many major corporations there are that impact the economy that he was completely unaware of before he started his job. With his comments, I started to think how the global economic view of different individuals in unique fields may vary. Some of the specific professions I have focused on include:

Investment Banking
Investment bankers work in a professional position that requires them to view companies as vehicles that can be divided up for profit. When they view companies, they dissect them to determine if there is increased profitability through splitting divisions up, leveraging departments and buying or selling certain divisions or sections.Corporate Banking
On the other hand, corporate bankers view companies in terms of potential risk and liability. They review companies in terms of how likely they are to fail and what the net effect of failure may be. Because of this, they view companies in terms of assets and liabilities, and they attempt to position themselves in a manner to stay ahead of the competition in capital markets.

Corporate Lawyers
Corporate lawyers generally have a thorough understanding of the law, and they take a fine-tooth comb to legal documents to determine areas that may be interpreted uniquely for the benefit of the company. They also understand the limits of compliance rules, legislation and rights, and they actively work to these limits in an effort to establish their client in the most advantageous way possible.

Business Accounting
Accountants are trained to work with clients relative to economic ownership. They view businesses in terms of revenue streams, liabilities and assets. They view equity and profit in terms of financial benefit to a company, and they do not focus on the legal ownership.

Insurance Companies
Insurance professionals view businesses by monitoring and gauging risk and liability. They assign a potential monetary number to risk and liability, and they view negative events that never materialize as a premium or gain for their own company.

Institutional Investors and (some) Hedge Funds
Investors often focus on the market value of a company and compare that against the potential value it may be worth. They view the difference between these two value in terms of risk and reward, and they understand that their ability to tolerate some risk may yield a greater reward.

Traders and (some) Hedge Funds
Professional traders generally want to join in the market’s momentum rather than look for a needle in the haystack. They may prefer to lead the market in order to gain maximum profit, but they must be attuned to the trends in the marketplace in order to take advantage of the markets with minimal risk to themselves. They generally do not monitor the value of a company, and instead, they focus on consumer sentiment.

Consulting Firms
Consultants are professional problem solvers. They look at all of the problems and issues that a company may be dealing with. They measure and quantify those problems, and they analyze the cost and benefits associated with different potential solutions.

Private Equity Firms
Private equity firms are unique because they blend a unique look on companies by adopting many of the mindsets of investors and consultants. They look at the potential profit the company may provide through an investment, and they inspect the problems of that company to determine what possible solutions may be used for maximum gain.

How do you see the world, and how your industry see the world, let us know below.

One response to “How Investment Banker, Corporate Bankers, Lawyers, Consultants, Private Equity guys, Traders… see the world?

  1. Pingback: Future Uncertain for Swiss Private Banks | Alpha Banker·

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