Why pay? Perhaps because, for a moment, at least, they believe.

…
The first thing to get in your head is that every single
Girl can be caught – and that you’ll catch her if
You set your toils right…

No one.

I am well aware of the many reasons I and my peers use to justify our fees, which include but are not limited to those you recite. What continues to puzzle me is why our clients continue to *pay* what we ask. Surely you can see that is a different question.

We do not talk of the *value* of investment banking services in this fair assembly; we puzzle our brains over their *price.*

TED would say: How quickly said client forgets the years of courting leading to engagement; the corporate development activities, the introductions and the entertainment. And what of the risk? The opportunity cost of time spent only to see a competitor win; or worse to lose because of a perceived conflict. Yet why pay?

But love is blind and lovers cannot see
The pretty follies that themselves commit;
For if they could, Cupid himself would blush
To see me thus transformed to a boy.

Because the banks’ owner and clients are being played by the bank employees who are constantly threatening to move across the street and are thus busily competing up the banks’ costs?

What is interesting is that this condition has not changed, notwithstanding years of complaints and repeated predictions of the imminent demise of investment banks’ “excessive profits,” usually by firms who were trying to disintermediate them.

I agree with Pickering that the services are largely commoditized, and that there is fierce competition among the market participants. The real mystery is why fees have not dropped. Either the market for investment banking services is not efficient–e.g., is characterized by large barriers to entry–the fees we charge on average are in fact “fair,” or something else is going on.

I am open to suggestions. Thoughts, anyone?