<p>Analysts need incentives in order to work the hours they do. Given this, they are paid relatively large sums of money (to other entry positions).</p>
<p>Investment banks are able to do this because (looking now at just the financial advisory and capital raising side) of the fees they charge. It is a high margin business, there are not that many capital intensive expenses. You just need people.</p>
<p>That is a very basic overview. I don’t have time to elaborate much.</p>