Although I am no longer with the sell-side, I do have a fair amount of contact with them every now and then.
This discussion of underwriting and risk-taking is an age-old one. The research team takes positions, put money where their mouth is because, hey why should we listen to you if you are not putting your own money in.
The problem is advisory-only teams and boutiques that don't underwrite. Essentially M&A,and boutiques, their weakness, their lack of convincingness stems from their attitude toward RISK. In all 3 parties, no risk is borne by the advisors. The worst case is they lose their clients. The best case is they get paid for doing very little. What I mean by little, they are not dangling themselves, they start with NAV of 0 (Assets - Liabilities) and can't possibly go less than that (and their overhead is close to 0 and low barrier to entry) and their personal fortune is protected (the incorporation takes care of that), but their clients do.
This does sound like a shady business, and yes probably it is. Unless your own money is at risk, you are not going to work your ass off (as it goes without saying). Now, auditing firms are different (technically they are "advisory-only" firms). They are often on the fixed wage and are required by law.
It continues to be discussed whether the "impartiality" that is often used to defend the legally-not-required advisory-only business model. I strongly doubt that. The shady business exists inas well.
Now I don't want to get into the discussion of risk-sharing (among market participants) and how much risk a bank should bear and we kind of saw what would happen if we miscalculated that in 2007 - 2008, soon after the recovery from the crash of the beginning of the 21st century. The Federal Funds rate just returned to a normal level (thanks to Mr Greenspan). The scene looked quite different from where we are today. Similar things were discussed about the rate hike. We will leave that for another post.