[philrapo]

Broadly speaking, investment banks perform two roles:

1) Act as advisors in financial transactions. You expect them to have your best interest in mind here. That's the core reason you are paying them -- to give you good advice and look out for you.

2) Act as brokers when you want to buy or sell something. Sometimes it's hard to find buyers or sellers for your particular transaction. Imagine trying to sell a hotel... or a 10% stake in Tesla... or a few million barrels of oil. You might not know anyone who has interest in that, but you still want to buy or sell. An investment bank can help broker a transaction. In this case, you're (implicitly or expicitly) paying for liquidity, i.e. access to their relationships with buyers and sellers around the world. The service being provided is arranging a buyer(seller) for your transaction. (The service is not about providing advice in your best interest).

There are certainly examples of shady dealings in role #1 above.

But in role #2, a customer of an investment bank generally understands that the service is matching buyers/sellers, and you don't rely on the investment bank to do your diligence. You're not paying for advice in this case.

It's like if your real estate agent was representing both the buyer and the seller, and you know they get compensated only if a transaction occurs. of course you expect that they are doing everything in their power to get everyone to transact.