Independent Advisor or Investment Bank

What the fee difference means

Large investment banks typically work on a success fee paid only on completion, usually proportional to deal size. This structure can encourage a 'get a deal done, any deal' bias.

Independent advisors typically combine a fixed advisory fee with a smaller success fee. This increases the incentive to be patient and wait for the best offer.

The risk of conflicts of interest

Large banks usually run other relationships at the same time — lending, brokerage, asset management. This can create situations where the bank's own interest with a given buyer candidate does not align with the seller's.

An independent advisor works for a single party and has no revenue-sharing relationship with any other financial institution; this increases the impartiality of the advice.

Which fits which transaction

For very large, listed, or internationally capital-market-facing deals, a large bank's distribution reach and brand can be decisive.

For mid-sized, private-to-private deals, personalised execution, continuous senior attention and lower total cost usually favour an independent advisor.

Process intensity and team continuity

At large banks, the senior banker who wins the mandate often hands the process to a junior team after the first meetings. At an independent advisory, the person who takes the mandate runs the process through to closing.

This difference is felt most in complex negotiations: having the person you speak to be the same person making the decisions speeds the process and reduces misunderstandings.

Asking the right question

The right comparison is not 'who is more famous' but 'who represents my interest, at my deal size, with the least conflict of interest'.

For most mid-sized transactions that question favours an independent advisor; for large deals requiring capital-market access, the answer can shift.

Frequently asked questions