Front office roles at investment banks

By | February 6, 2014

For those trying to find your place within investment banking, here is an overview of what the different front office roles actually entail:

Sales

You get to the office around 6am in order to spend most of your day on the phone trying to sell your clients products that they probably don’t need. If you’re not on the phone then you’re shouting across the floor to get prices from traders, and if you’re not doing that then you’re staring at technical analysis charts on Bloomberg – maybe you believe in them, maybe you don’t, but perhaps you can take one of them and spin a story around it so you can sell some shit to a client. Clients bitch at you, traders and researchers think you are an idiot, but at least you get to go home around 5.30pm.

Trading

You still get in early. On the bright side, you don’t have to deal with any clients in this role, but the downside is that you have to deal with salespeople, which is possibly even worse. If you’re lucky you can get to do proprietary trading, which is definitely more interesting than filling orders for clients (flow). The problem with prop is that you’re crapping bricks whenever it looks like a position isn’t going your way. Still better than being a salesman, but only marginally.

Structuring

At least there’s some variety in this role – as long as you like spending your day inventing a bewildering array of mind-bending financial structures designed to temporarily blind anyone who tries to comprehend them, at least for long enough so the salesperson can convince a client to part with enough cash now that it doesn’t matter when the whole thing turns out to be a bundle of lies. Well, that was what a structurer did before 2008. Now that everyone’s runs away from exotics like if they were the plague and vanilla is the new flavour of the day, they probably don’t have much to do anyway.

Research

This is one of the most soul-destroying positions in the bank. You get in as early as the traders, but there is no way you are going to be out before 7pm.  Fundamentally, the function of the research department in a bank is not to produce good research, but to produce something glossy that the salespeople can wave in the face of clients so that they can convince them to buy something. The research department can sit there with their huge models and their fancy analysis tools, but at the end of the day they’re employed to produce sales brochures. Oh, and don’t forget to suck a lot of client dick if you want get those Extel votes.

Quants

You are the traders’ bitch. Whenever a model isn’t working properly (or even when it is working properly, but the trader doesn’t like the results) the trader will shout at you over the phone, or even standing over your desk, demanding that you fix it now because NOTHING COULD POSSIBLY BE MORE IMPORTANT. And time after time, you’ll swallow your pride and do it, because quants are treated like second class citizens in an investment bank. You’ll try to convince yourself that the research you’re doing (whenever you get to do research rather than spending your time trying to fix a 100 MB Excel spreadsheet) is just as interesting as what you were doing before you joined the bank, but deep down you know that you’re only lying to yourself. What makes things worse is that the useless idiot who shouts at you makes 3 times more money that you do.

IBD
For some reason, some people think the job is glamorous. It’s obviously not. Walk around the offices of any major investment bank around 1-2am, and you will see this tired, haggard investment bankers crawling out of the office in the small hours of the morning and falling limply into taxis, just so they can do exactly the same thing again tomorrow, and the day after, and at the weekend. Most of them don’t even have a clue about finance, but have truly mastered the secrets of PowerPoint. You have to pity these poor souls.

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One thought on “Front office roles at investment banks

  1. LBO Daddy

    In my opinion:

    Trading>Research>IBD>Structuring>Quants>Sales

    Trading brings you the big bucks without the soul-destroying lifestyle of IBD.

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