Investment Banker

Clients have asked us to help clarify some terms they hear used inconsistently in and around our industry. Definitions we've seen for the term "Investment Bank" are varied and include:

"an intermediary between an issuer of new securities and the investor. The investment banker buys new securities and then sells them to the public at a higher price, earning a profit on the spread. Depending on the arrangement with the issuing company, the investment banker may perform the functions of underwriting, distribution of securities, and advice and counsel." (Source: All Business, a D&B Company)

By these definitions BTS is not an investment bank. Out of confusion regarding the term, some industry players using the term don't fit this definition either. Neither is BTS a "broker dealer". A broker-dealer is "a person or firm in the business of buying and selling securities operating as both a broker and a dealer depending on the transaction. Technically, a broker is only an agent who executes orders on behalf of clients, whereas a dealer acts as a principal and trades for his or her own account. Because most brokerages act as both brokers and principals, the term broker-dealer is commonly used to describe them." (Source: Investopedia)