We’ve all heard the saying “bigger is better”. But when it comes to investment banking, that’s not always the case. Now more than ever, smaller firms can offer a myriad of advantages over their bigger counterparts.
For example, small firms are much better positioned when it comes to dealing with the ailing economy. Large firms tend to be heavily involved all aspects of the financial sector. As a result, they’ve borne the brunt of the fall out from the ongoing crisis. Many have responded by adopting a defensive posture and focusing heavily on damage control. This leaves them little time to focus on serving their clients.
Smaller firms can also offer their clients the kind of personal attention and high-level service that is often hard to come by at bigger companies. Large companies have many clients and will often cater to their biggest and most prestigious customers. Smaller clients can end up feeling like just another face in the crowd. Smaller firms see the worth in each and every client and will make their best people available to all their customers. They are enthusiastic and have an entrepreneurial spirit.
Another advantage of smaller firms is their open mindedness and willingness to innovate. They realize that one size does not fit all, and they aren’t afraid to “think outside of the box”. Decisions don’t need to go through layer after layer of hierarchy and bureaucracy before they can be implemented. This gives a smaller firm the flexibility it needs to design and execute an individual approach that is specifically tailored to each client’s needs.
Big companies have an entrenched culture. They are resistant to change and are reluctant to deviate from their standard operating procedures. This cookie cutter mentality interferes with their ability to act in the best interest of clients who don’t fit the mold.
It’s easy to see why so many companies are turning to smaller firms for their investment banking needs. No matter the client’s industry or size - and no matter what the economy is doing - small firms provide excellent service, fresh ideas and great results. “It’s not the size of the dog in the fight; it’s the size of the fight in the dog.”
Robin Trehan is management and financial expert. He can be reached at www.keyfunds.com