Holla Back, Office: 7 Reasons You Shouldn’t Work In The Back Office
“Andy used to want to be in the heat of things, sealing deals and wooing clients, but now he’s destined to be support staff.
Holla back, office?”
-BigLaw, BigSchmaw, The Leveraged Sellout
One of my most frequent questions lately is whether or not it’s a good idea to work in the back office of a bulge bracket investment bank.
I try to give specific, nuanced tips on everything from private equity interviews to investment banking resumes, but my advice on this one is simple:
No.
Front Office vs. Back Office
There seems to be some confusion over what constitutes “Front Office” vs. “Back Office” (and then there’s that netherworld of “Middle Office” in between the two), so let’s be clear on terminology.
“Front Office” refers to any group that generates revenue for the firm – investment banking, private equity, sales & trading and prop trading (trading with the firm’s own money rather than with clients’) are all examples.
One exception: equity research is “front office” even though it doesn’t bring in revenue. But with the way things are going, that classification may not hold up.
“Back Office” is anything that does not generate revenue – IT, accounting, HR, risk management and compliance are examples.
You might consider some of these “back office” roles – such as risk management and compliance – to be “middle office.” But let’s make things simple and just go with “back office” for now.
As you might surmise, groups that don’t bring in revenue are not viewed favorably in a culture where greed is good.
But why specifically should you not work in the back office?
1) The Front Office Doesn’t Care
This might be the biggest misconception that prospective financiers have: that it’s “easy” to transition from back office to front office.
In practice, it’s very difficult and I’ve rarely, if ever, seen it done. In cases where it does happen, usually it’s moving from “middle office” areas such as risk management rather than jumping from IT to M&A.
Often, engineers who want to move into finance are “sold the dream” on joining IT at a large bank, thinking that they’ll be able to break in at some point in the future.
But you know what? Out of every single engineer friend who graduated with me several years ago and went to work in IT at a bank, not a single one has successfully transitioned over – even though they all want to.
2) Top Business Schools Don’t Care
Business schools classify candidates into 3 categories – the “prestigious job” (finance / consulting) crowd, the “average job” (IT consulting / accounting / product management) crowd and the “did something completely different” (became a monk in Tibet / started a company / became a wandering bard) crowd.
Or as Alex Chu over at MBA Apply so eloquently puts it, the “Blue Chips,” “Average Joes” and “Vagabonds.”
Banks and other financial services firms recruit primarily at the top 10 business schools; these schools have very few students who took the “average job” path, and by doing back office work, you put yourself in this category and therefore reduce your chances of getting into one of these top schools.
Don’t believe me? Take a look at what Alex has to say on the topic:
“The difference with HBS, Stanford and Wharton is that you’ll see far more Blue Chips and Vagabonds (and by extension, less Average Joes) than you’ll see at other schools, and particularly at HBS and Stanford.”
Needless to say, HBS, Stanford and Wharton are some of the top business schools for finance recruiting.
3) The Buy-Side Doesn’t Care Either
This one mostly applies to hedge funds, but doing back office work at a large bank is not a good way to break into the buy-side.
Some people get the idea that working in trade execution support might be a good way to network with hedge funds and eventually break in.
While this logic almost makes sense on paper, in practice it’s much better to get actual experience doing trading or investing if you want to work at a hedge fund – even a small “prop shop” or smaller hedge fund would be a much better strategy for getting into SAC or Citadel one day.
And Steve Schwarzman really doesn’t care that you did IT work at a bank – so don’t expect a great reception in private equity, either.
4) Goodbye, Models And Bottles, We Hardly Knew Ye
Don’t expect too much pay in back office jobs, let alone the models and bottles you lust after (if you’re female just think of male models here).
You’ll likely be earning slightly less than what investment banking analysts make as base salary ($60K), so probably $40-50K in your first year with a very small bonus (5-15% of base salary).
It’s hard enough living in New York or London on this kind of base salary, but to barely get a bonus either… that’s like pouring salt in the wound.
5) Respect, I Never Get Any Respect Around Here
There are myths about how bankers don’t respect lawyers when working on deals, but in my experience this is rarely true; no matter what you say behind their backs, no one directly insults or disrespects lawyers.
But back office folks are directly insulted. I’ve seen MDs yell at risk management and compliance staff because of draconian restrictions, and I’ve seen even lowly Analysts get into arguments with IT staff who are told “FIX IT NOW!!!” repeatedly.
Once again, those who don’t generate money in a culture of money are not very well off.
6) It’s A 9 To 5 Job
Yes, this is a bad thing. The problem with standard (or almost standard) hours is that learning and advancement opportunities are also very limited. If you value peace of mind and a stress-free environment more than the potential to advance, then back office work might be for you.
But I’m guessing most of you don’t fall into that category.
This type of work is more appropriate if you want to have a secure, stable job with little in the way of either downside or upside.
7) The Work Itself
Finally, the work you do in the back office is almost uniformly boring and even more repetitive than spreading comps, creating pitch books and pulling all-nighters to fix broken printers.
While you could argue that investment bankers are overpaid paper pushers as well, they actually bring in revenue via deals. And at the senior levels they focus on relationship-building, which is far more interesting than monitoring employee trades.
Ok, But Is It Really That Bad?
There are a few exceptions. As mentioned above, if you are simply seeking a low-stress environment while still being able to claim that you “work in finance,” then the back office might be for you.
Another exception: internships. It’s not necessarily the end of the world if you end up in a back or middle-office role in a summer internship, but you should try to transition out as soon as possible – it’s much easier to move over as an intern than as a full-timer.
The Solution
“Ok,” you might say, “But if I can only get back or middle office roles at bulge bracket banks what should I do?”
Simple: Go smaller. It’s far superior to do banking or trading at a boutique than to do back office work at a large company.
Sure, you might not have the same exit opportunities as your friends at Morgan Stanley IBD, but you’ll still be much better off than your friends at Morgan Stanley IT.
Boutiques are still hiring, even in this market, and are often the best strategy for those who are transitioning into finance from other careers.
Holla Back…
…if you can find me a single example of someone who successfully moved from back office to front office.
In the meantime, focus on doing client-facing work anywhere you can – that’s always better than being the IT guy (or girl).
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Tags: Back Office, financial services recruiting, investment banking, investment banking groups, understanding investment banking
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middle/ back office turned bankers is rare (perhaps next to none), but I have heard of middle/ back office turned traders, not that it happens commonly but it does happen.
Yeah the trader option is a bit more viable but it’s still an uphill battle. And usually traders are moving over from something related, like execution support, rather than accounting or IT.
I am actually one of the few people who was able to move from the middle office, to eventually a prop trading role at a BB IB. But everyone’s intuition on this topic is correct. Aside from myself, I knew one other person who was able to make a similar transition out of hundreds who wanted to. The networking, and extracurricular work involved in such a feat is gargantuan. You must put yourself in a situation where you are visible to senior decision makers and can develop a relationship with them. You also need to choose a “rabbi”. You need to make this persons needs a priority in every situation. In this way they will support your push to the front office which may meet with resistance from your boss. On top of that you must figure out a tangible way that you can show you deserve to play with the big boys. In my case I completed the CFA examinations and was awarded the charter (was hired as a junior trader after level II).
Finally, as in most of life, luck needs to be on your side.
Yup, very good insights there. People always ask me about the CFA and my response is usually the same: “No, not really worth it” – but as you’ve just shown, sometimes it can be helpful in specific cases.
Hi,
I found your site a few weeks ago and have been addicted since. I really appreciate all the knowledge (and specifics of what not to do) you’ve shared.
I also had 2 questions:
1.) Would you consider employing the same tactics with a pure science background (i.e. Chemistry, Biology, Physics) as with engineering? Do the recruiters view them as the same?
2.) What’s a good method for identifying and applying to boutiques? Job websites? (I’m a graduating senior at UC Berkeley, but I’m afraid that the Haas business school undergrad crowd would over shadow me in the recruiting process.)
On your first question: yes, recruiters view scientists and engineers basically the same way. You’ll need to fight hard to avoid being roped into the back office. I’d recommend looking at smaller places.
thank you
be careful not to sell yourself short. a hard science background is something that banks respect, so be confident when you apply for front-office roles.
Actually I came from a science/engineering background and can tell you firsthand that while banks do indeed respect it and while you can get front office roles, finance/related-majors do have an advantage. Not insurmountable and no reason not to be confident, but the advantage is there nonetheless.
What of a dual major. B.S. in Biochemical Engineering and a B.S. in Economics. Chemical Engineering from a top 5 school (currently tied at 2) and the B.S. Economics, not so much….Georgia Tech. Would there be good chances for that breaking in IB/PE/HF? What of BB?
Sure, but why bother with engineering as well? It’s a lot of work and doesn’t help you that much with actually getting into finance.
oooohhhh nvm on the 2nd question. I found your link to the wallstreetoasis.com thread. yayy.
I know this post does not have any correlation to my question but I am wandering when banks give out their full time offers.
Do they wait till the very end? Or if they like you, would they have already given it to you?
This applies to IBD, Sales & Trading, boutiques…anything…
Usually they tell you at the end, but sometimes they’ll do it halfway through depending on the bank/group. Never earlier than that, though, it’s just too hard to tell before the halfway point.
What would you call private equity accountant who works on different funds and with fund managers directly on a daily basis?
PE is a bit tougher because it’s buy-side and there isn’t nearly as much administrative infrastructure required… in the end I’d say an accountant is an accountant, though you’re probably better positioned to break into PE/banking than a normal accountant at a Big 4 or someone working in the back office at a bank.
A Fund Accountant.
Great post, very informative while answering a lot of questions I had lingering for awhile.
I had a question related somewhat to the topic of back office positions in regards to Transactional Advisory Services performed by some of the larger accounting firms.
Financial analysts in TAS work on transactions with investment banks and private equity groups from my understanding.
How would the prospects look for someone transitioning from TAS to investment banking or related finance career?
It’s generally much easier to get in from TAS… those are not really back office in the same that IT/HR/accounting are because they actually work on deals.
I’ve actually seen quite a few TAS guys break into banking/finance so it’s definitely possible. Easiest path – contact existing clients and guys you’ve worked with before on deals.
I read that post and got a bit scared, haha. I’m a rising sophomore, and all I could find for an internship was in a portfolio analysis and risk group at a large money management firm. is this a decent internship for a freshman, or am i doomed to back office boredom? haha, totally serious, tho.
That’s fine for a freshman… portfolio analysis isn’t really “back office” in the same way some of the other things here are. Plenty of time to move up and out.
Would you consider a credit exec for a commercial bank back office? What if they are working on IB-type deals and have a say in pricing etc
If they actually work on deals and pricing them with bankers, no, not exactly back office. There’s always a gray area; you’re better off than HR or IT people obviously but not as well positioned as someone who’s done IB.
I know plenty of kids who did middle office (CFO’s, treasurey, risk management) at bulge brackets and used the name brand to get their resume noticed at middle markets/botiques for full time jobs or who moved 1 year out. I would say passing the CFA 1 or using your free time after your leave work at 5 to demonstrate your interest in front office work goes a long way there as well. But yes, I mostly agree with your comment. The one suggestion I would add is that it’s better to take a “front office” job at a non-bank for a couple years out of school than take middle office or back office. Working for the Fed/government, doing sales/bus dev, programmer at a website/high tech firm or corp dev at a company is better than middle or back office. I think the point is that you want to work in the front office of whatever company you work at. Playing a support role anywhere is going to be less exciting and leave you with fewer options.
Yeah, good point. “Front office” anywhere, whether it’s at a bank, a normal company, or even the government is always better than being the support person.
I’m working in Product controls/risk management for credit derivatives now at a bulge bracket, after a bit of a vagabond period (off-broadway theater), I’m trying to figure out if I want to return to a non-finance life or if I want to plow further into the fire (health insurance! 401k! salary! hurray!). I found the general sense of the entry to be correct, but I’ve got a few notes:
- Everyone I know in IT and controls has a starting salary of at least 75-80k + decent bonus. (in my bank we get bonus based on how well the group you support performs, not sure how it goes in others)
- The desk that I support has 2 traders that moved up from IT, and 2 who moved up from product controls. Granted, they spent at least 3-4 years in their middle office job first, but they did get to the desk.
- People who started in a hard science (math, physics, engineering) fields seem to get ahead of the “finance” and “finance engineering” types far, far faster. Exactly the opposite of what I expected. (ie: I can’t remember bloody debits and credits, but I can figure out your model and tell you why it exploded.)
- very few people work 9-5. (good lord I’d be thrilled if I did) if you work only 9-5 you are most definitely not going to get ahead. at all.
- even controls abuse IT. avoid IT at all costs.
ok possibly not the most constructive comment but merely my experiance.
Thanks for the comment. Yeah IT does tend to pay higher… also might be easier to get into trading from there.
Still, when all is said and done I feel you are much better served going to a smaller bank and actually doing banking / trading vs. starting out big, doing back/middle office work and waiting years to transition over.
IT, BB, Never abused. If you go and ask a question like “You want this is blue or green?” when half of the positions of the desk are limiting down of course you will be abused. Leave those questions when the positions are limiting up and you will even get invited for drinks afterwork.
Networking, social skills … remember?
Holla Back…
“…if you can find me a single example of someone who successfully moved from back office to front office.”
I can give you TWO at Goldman Sachs. I know a girl that did a couple of years in ops and moved into fixed income sales.
I know a guy that did 18 months in IT that moved into IBD after about a year.
Enough said you sceptic.
Ok, you win.
Does it count when someone starts in front office, goes to back, then returns to the front?
Rhetorical question, just wanted to bring up that Goldman shifted some of their front office FI sales 1st year analysts to back office at the beginning of last year before switching them back.
Great site, wish I had found it before I was halfway through my first year.
I suppose that would count, but I think it’s a bit of a contrived example… I guess Goldman and other firms might do that if the economy is bad, but normally it’s pretty rare.
there’s always someone that bucks the trend. i will email you a wild example tonight.
Looking forward to the story, I might publish some of these (anonymously) next week.
I think publishing anonymous real world accounts would be something worth reading indefinitely.
It would really add to the understanding of qualities that allowed individuals with unconventional backgrounds to progress at particular firms.
I wouldn’t mind reading those one or two who break into finance through completely uncharacteristic methods as well…(enjoyable to read)
Yeah I’ll post some of the stories I’ve received next week.
Thank you for you posts here. They are very helpful.
I have another question/concern: I got back from my 2nd round interview at GS Operations in the Treasury division. They told me it may take up to 10 days before i can hear from them about the offer. Two days later, they invited me for another 2nd round interview, but this time in the Securities settlements… I am little bit concerned…
The interview went well though, i tried to close the offer by “getting the hook” with interviewers. So, should I really still have to expect any good news from the Treasury? Are they just giving me a second chance? Any thoughts here?
What does it mean to you?
Thanks for the insights
Hard to say, different groups run differently. I think you’re still in the running and have a good chance; if I were you I would be persistent and follow-up repeatedly just to make sure everything is on track.
oh yea i love hearing stories~~ yea more stories on m&i !!
Hi,
I’m a hedge fund accountant doing the daily reconcilations and cutting NAVs on a large $11 billion mutli-strat hedge fund. I just recently graduated from college and this was the job that I happened to land.
My question is what is the best way to crack into the ibanking field? Should I be looking for an analyst position at a smaller ibank boutique? work on my cfa? work a few more years in back office and get my mba? Any insight/suggestions/tips would help.
Thanks in Advance.
CFA is basically useless; spending more time in the back office won’t help too much either as it will take many, many years before you get in via that route and getting an MBA.
I would definitely focus on looking at smaller firms and leveraging any contacts you have in the industry.
why is the CFA not really needed for banking???
I just did my rop 20 MBA and passed level I CFA as I try to get into that dark hole called equity research. what I found funny is that NONE of my friend bankers pursue the CFA. all the guys who want to do research/be PMs live and die by these 3 letters, on the other hand…
now, call me an idiot, but wouldnt having more of the skills and knowledge that come with the CFA charter make you a “better” banker??? I only know equity analysis, but there would seem to be a lot of overlap, esp on the FSA and equity portions of level I and level II CFA….
is it my naivete to think that banking is less about hard core analysis and more about putting a pretty powerpoint together??? if that it is the case, it seems bankers make such good $ b/c a) they work crazy 100 hr weeks and b) banking per se brings in revenue while research does not (trading commissions getting thinner, etc)
so back to my original question, why dont more bankers pursue the CFA? I know one dude who took level I, failed, but after he got a banking job, decided to quit on the CFA charter.
just wondering — thanks in advance.
To be perfectly blunt with you, there is very little hardcore analysis required in investment banking.
At a fundamental level, banking is a sales job – and like any sales job, it’s about persistence and effort more than deep insight or being a math/finance wizard.
So yes, banking is most definitely more about putting a pretty presentation together than anything else.
Bankers don’t pursue it because it’s a poor return on time – hundreds of hours of study required for minimal career impact.
Agreed. I spoke to a co-worker of mine who is a research analyst and former banker and she characterzed bankers as having knowledge that is several feet wide but only a few inches deep and analysts as having knowledge that is more like a foot wide but several feet deep, relatively speaking.
The absolute volume may be similar but the type and quality appears to be different. I’d definitely say that there is deeper analysis being done on the research side than in banking.
That said, bankers typically go the PE route and don’t need to pursue a CFA designation whereas people in research traditionally go the AM/hedge fund route that values the CFA significantly more. Of course, bankers are obvioulsy moving into hedge funds at a higher rate but I still see a majority of those that do decide against the CFA..
Bankers do not NEED the CFA as the CFA’s focus is on investment management. Bankers do analysis but highly skewed to corporate finance (-m&a, floats etc) whilst CFA is HIGHLY skewed towards investment analysis – everything from portfolio construction, equities/fixed income/alternatives analysis, accounting analysis, portfolio management.
The CFA is highly regarded in funds management whether you’re talking about mutual funds, hedge funds or private equity. Bankers highly regard IBD experience of some form- proves you’re able to bend over backwards and work til 2am everyday, 7 days a week.
sorry, that should read “top 20 MBA” : )
all that schooling and I still can’t spell!
I worked in the back office and it sucked but I still got into Wharton.
Well there you go… even the back office is not the end of the world.
How about Jerome Kerviel of Societe Generale? He was in the back office and moved up to be a trader. Hes now going to jail, but theres an example of someone moving out of the back at a fairly big bank.
See the next post in the series:
http://www.mergersandinquisitions.com/tales-from-the-back-office/
I know of at least one of our grads who made the move from TAS to the front office.
I know of a couple of others who went into BO (accounting), passed Levels 1 and 2 of CFA and eventually made the move to equity research. But it took a lot of networking and sending out something like 50 resumes over a year’s time. My sense its that most people in the back office get complacent. I know of no one who moved from BA to an IB FO position.
You can move, but it’s not easy, and takes a lot of work (and a strong stomach for rejection).
Yeah, TAS to front office is much easier. Even ER is somewhat easier to move into than banking because there’s less interest.
Agree on the complacency comment – I’ve even seen that one happen with front office guys…
I work in middle office at a bulge bracket bank . Out of a dozen sales/traders on our desk today, 2 moved up in a couple years time from assistants punching tickets to salespeople covering blue chip clientele. Most people it seems get burned out/complacent after a couple years of abuse in middle/back office, stop trying to move to the front office afer realizing it is difficult, or transition to management/officer positions in middle/back office, which precludes ever moving to the front office. I storngly believe you first need to absolutely convince yourself that you are cut and ready for a sink or swim oriented front office position, then pursue it tenaciously, in an animal-like fashion. I do not know anyone who moved from middle/back tofront office who wasnt extremely aggressive and vocal about their desire to move.
Yup, agreed on all fronts… it’s very easy to get complacent in a back office-type role.
I know a lot of poeple who have gone from a big 4 public accounting firm to investment banking and equity reseach. Not sure whether you consider public accounting on par with in-house accounting but I think they’re different and can lead to different opportunities.
That’s true, Big 4 is certainly different from in-house accounting and still better than back office work.
Do you think working as a Financial Analyst(budgeting and forecasting etc) in Operations at a Bank will have any sort of exit opportunities. One hope is transferring internally. I am a finance graduate and will be taking CFA level 1.
Can I tell my future interviewer that the market was bad when I made this decision. Maybe I can leverage my graduate degree and a CFA level 1 to show my commitment.
Thanks!
It’s ok but I would try to get out ASAP because it generally leads nowhere.
Does the blue chip, average guy, vagabond rule work for law school admissions??
I’m not an expert on law school, but for that it’s much more dependent on GPA and LSAT score… they’re not looking for “well-rounded people” as much as they’re looking for people who have done really well academically. If you got an LSAT score near 180 and had a 4.0, for example, I imagine you could get into almost any law school.
I just graduated from a top 15 university and had a really tough time finding a job in this awesome job market we’re having. I reluctantly accepted a middle office trade support role at a bulge bracket firm. I have already heard of a few of our group jumping to the desk. I’ve realized quickly though, that I have a better educational background than 99% of my group. My question is how much does a brand name degree factor into making this jump (as early as possible)?
It will help, but not as much as it helps with getting the job in the first place.
How much people like you and how you’ve done so far play a bigger role.
Almost a year after this post and I’ll be starting a FO role in Jan…be proactive, be visible…it can happen!
There you go. Congrats.
Hi,
In regards to what ‘Alex has to say on the topic’ blog is it true that you are less likely to be accepted into a good business school if you are older then 27. If so why?.
And where does an engineering job go under? because i’m sure that many engineers will first go under their own field first before applying for a good business school.
Thanks
Yeah, your chances do decrease as you get older because they are leaning more and more toward younger people.
Engineering could go either way, but most likely it would be considered an “average joe” type of position because it’s not as “prestigious” as banking or consulting.
I personally think that’s a stupid way to look at it, but people are obsessed with prestige…
Oh ok,
But how is it possible when people say that ‘alot’ of people who have completed engineering degrees (from top undergrads i presume) will later go on to do an MBA at a top business school to break into finance when alot of these guys just worked as engineers.
Thanks again
Well, it does happen and if you’ve gone to a top undergrad it’s easier to do this.
A lot of it depends on how you present yourself and what your other qualifications are – if you have a lot of other impressive accomplishments, those could give you a needed bost.
Thanks, i have another question.
Looking at that file it seems that the top business schools classify only the top IB and top MC and top HF & PE as ‘blue chips’ which emplys that going to a boutique firm may not be such a great idea and you may be better off going into the army or something. What are your thoughts on this?
3) Average Joes — worked in decent jobs (IT, accounting, some random corporate job, 2nd tier consulting, etc.).Or they are they went to okay undergrads, and worked at no-name hedgefunds.
I don’t quite agree with him on that point. I’ve seen lots of boutique bankers get into top business schools, and I’ve seen comments from some admissions committees members who have stated that they don’t place too much of a difference on which specific bank you worked at.
Sure, having a name like Goldman will help you more vs. some no-name place, but the difference is not nearly as big as it is between finance and some other fields.
Regards to your engineering question: they go to funds management and work for a quant fund. Or do a phd and become a quant for and IBD.
These days employers highly regard people with quantitative backgrounds whether you’re coming from pure maths, physics, engineering or computer science. They’ll take into account whether or not you have any finance experience and whether you’re able to translate the math into something a trader/analyst/fund manager can understand. The theory is that you can teach the business/finance concepts to a quantitative person and they should be able to apply the numbers to it. But its very difficult to teach stochastic models to someone without a quantitative background.
Hey there, I just came across your blog — I’ve already been reading it for the past hour and can’t wait to come back for more!
My question is a bit of a deviation as it relates to the standard message of this post. I spent 99% of my time in public accounting auditing investment management clients (funds), mainly alternative investments. Then I skipped over to private industry to do some “back office” accounting for IM and Treasury. Most recently I spent a bit of time as an analyst doing valuations.
Anyway, my question is, do you think the same difficulty holds true for someone who might just want to go from back office to the middle office — say, treasury/cash management, etc. rather than leaping from back office to the front?
No, it’s easier to go from back to middle than it is to go to the front. I don’t know how much easier on an absolute scale but definitely not as hard.
Hi, I work in the Front office in Consumer Banking in a top 3 Retail and Commercial Bank. What are my chances of getting into the Front Office of an Investment Bank. Do i have better chances than Back Office people already in Investment BAnks?
Yeah I’d say your chances are higher but it’s still an uphill battle from consumer banking – I’d focus on smaller places as they will be more receptive to your story.
Currently working in front office although doesn’t feel like it, at one of the big 4 accounting firms in the investment management, thinking of getting into a fund accountant position at a hedge fund get some experience then eventually become a due diligence officer for a hedge fund. Is that the best option for someone coming from a big 4 accounting firm to follow then the average accountant leaving the big 4 and going to work for a bank in the bank office. Aren’t due diligence officers considered front office. Thanks.
Yeah that’s one option, you could also move into the TAS group and then leverage that to get into banking rather than a hedge fund… one advantage of a hedge fund is it tends to be easier to move from back office to front office at smaller firms. Due diligence offers are sort of front office but not really.
What do you think of Goldman Ops vs. Touchstone Partners for a summer internship? I’m trying to decide between both. I already have front office experience from last summer and this is my final junior internship.
Never do back/middle-office when front office is an option… even if it’s at Goldman.
I wanted to comment on the IT perception within Finance. There are tons of different roles each with different level of prestige. I worked for an Bulge Bracket bank in an quant/analytic positions where our main role is to develop financial models to price complex securities. That’s usually much more prestigious than building reports for the trading desk. Some bank will put these groups under research and others under IT; though the recruiting process is similar to Capital Market or Investment Banking, we only go to Top Schools. Many of my friends have moved to Trading, Investment Banking or pure Quant Research.
IT can really be a misnomer.
Yeah there are different roles within IT and what you did certainly sounds better… still, when all is said and done it is quite difficult to move from a pure back office position to IBD. Others may be easier.
I started my career several years ago (5+) in a middle office position in credit trading at GS. There were a number of my colleagues that eventually moved on to front office positions in both sales and trading, including 2 people that got jobs as GS prop traders and another that now has his own P&L in flow. I bailed after a couple years and started over as a first year in IBD at another BB bank (lost 2 years of experience but was worth it). Maybe times have changed and this isn’t as common now, but at the time it didn’t seem all that difficult to do at GS, especially if you wanted to do sales.
5 years ago the market was in recovery mode so that probably made it easier… and as others have mentioned, middle/back office to sales/trading is easier than getting into IBD because they’re more closely related.
Hi, I worked front office for about 2 years, execution role and hated it. Considering trying to get into a back office role, to use my product/process knowledge. Am I insane? (thought I should add that I only left Front office due to redundencys x2!)
Thanks
I guess you could do it, but it’s quite an uncommon move as far as these types of transitions go… would be hard to make the move back as well.
I want to start by saying that your website is extremely informative. Thanks !
I have a couple of questions..
1. Under what group would you classify being a private banker at a global bank (non BB), in terms of mba admissions? Also, the position is in Latin America, and right from the start I’d have to find and form relationships with wealthy clients in order to build my own portfolio of clients… I wouldn’t really have to “assist” other senior bankers.. The office is fairly small and I probably could have a notable impact..
2. I have a back office offer at a BB, also based in Latin America..The office is small though, nothing like NY.. do you think it is worth accepting this in hopes of moving to front office.. given that the office is small and could make it easier?
My goal is to go to a top MBA in about 3 to 4 years..and from there I would like to be a FO Associate at a BB in NY and I would also consider PWM in NY.. which of the previous two offers would roughly maximize my chances of getting into a top school and then moving into a FO role?
Thank you !
Private banking is not back office work, but its also a notch below investment banking or private equity.
I would not accept the back office offer – better to do private banking instead as its easier to move from there into FO and then MBA
“Private banking is not back office work, but its also a notch below investment banking or private equity.”
- So if it is not back office, then it is considered front office in the industry?
- By a notch below, do you mean it is seen as an “average job” in terms of Bschool admissions or more prestigious than that but not as much as Ibanking/consulting?
So, is this consensus right?
Private Banking –> Top MBA –> IBD Associate is much more likely to happen than Back Office ..> Top MBA –> IBD Assoc.?
Thank you.
Yes it is front office but it is not as good as banking / trading / PE / consulting etc.
And yes, I would say private banking -> top MBA -> IBD Associate is more likely than starting off in the back office.
I’m just devastated after reading this! Here’s my story: I recently graduated from a Masters of Accounting program and also hold a Bachelors in Mathematics. I’ve passed all the CA exams as well. I was yet to complete my hours requirement, but I got offered an analyst position at an Insurance company. The job description said that I’d be working with the corporate finance group on some projects. I was offered around 70K + 10K bonus(based on my annual salary). 2nd day at work I realized this was a back office job. I ran home today to research the prospects of switching out of this crap and I’m utterly disappointed after reading this. It’s been only 2 days and there’s nobody else who’d pay me 80K right now. The CA firms in my area have been hit very hard and the chances of me finding a job at such firms are close to none. Mind you, it’s only been 2 days. What do I do? As well, I’m writing the CFA level 1 exam in December.
I would stay there for awhile and see what develops…. things might improve and you haven’t been there that long. If there’s no improvement, start thinking about other firms and spin what you did as front-office experience instead
Thanks for your response. In your article, though, you’ve been bashing back office jobs left right making me think I’m trapped in something I will neither be able to highlight my resume proudly nor be able to get out of easily. Reading this really devastated me as I personally believe with a CA and CFA i’ll make a good M&A analyst (I love that stuff starting from the equity price fluctuations to the tax consequences of mergers), but there’s no one I can show my skills to in the mine I am stuck in – serious lack of motivation after reading this article. Maybe I’m wasting time in the back office? Should I just sit at home and just study for my CFA maybe??
Since I still have 14 months of time to spend at a CA firm to get my “designation”, would you recommend I go back to a firm and spend that time doing boring audits and tax reviews; or should I just highlight “passed exams” on my resume nad try my luck, after I pass a couple of CFAs, at smaller investment banks/PE? Thanks again for your help!
Keep in mind that this article is mostly relating to investment banking specifically… not insurance companies.
You can always network your way into other jobs if you’re persistent enough – it’s 99.99999999999999% about networking and 0.0000000000000001% about the CFA.
I would try some cold-calling and alumni networking now and see what the response is… if they’re not receptive, try to go to a Big 4 accounting/valuation group first.
I work at one of the remaining BB IB banks in NYC. I’ve been here since Summer 2005 and have seen 11 out of 65 operations and finance analyst that were in my analyst program make it to the front office. Only two made it to IB, one to merchant banking and the rest to fixed income sales and trading. I myself had two interviews, one in the late summer of 2007 for a mortgage trader position through the traders I supported (needless to say what happened with that offer) and second in the early summer 2008 in global capital markets, also got in through the traders I knew. I actually got the offer for GCM but a week later was taken away because it was the layoffs week. Not sure how people will be hiring in the future, but its VERY possible as long as you have the character, the brains and the luck. Actually I spoke with my friends about it and we came up with the formula, 80% luck, and 20% hard work. But that 20% hard work has to be 100% filled up along with impressing the right people. If you work hard but the wrong people are looking, you are sh*t out of luck.
These days, I don’t know where I’ll be heading myself.
I will graduate with a degree in finance and begin working for a well respected financial services, news and media company this year. What is the probability of making the jump into IB from a company like this? What are the best methods of breaking into IB from this industry and when should I start networking? What is the best way to prepare myself for the interview process and job duties? (Read books like IB: Valuation, LBO and M&A)
It’s all about networking… go for media-focused boutique banks and start cold-calling and contact alumni maybe a few months into your job. Try to make the move a year in so they take you more seriously and so you have some solid experience to speak about.
I notice that “unstable” traders are the ones who abuse people in general and are the ones who get booted first. Abusing people is a sign of internal weakness, BAD for trading (and in the eyes of the floor’s MD)
Hi,
I am in need of your suggestion for my situation.
I was graduated 2 years ago in Finance in one of the Canadian Universities. And started working as a Trade Statement in a Custodian Bank and was laid off in april 2009. Took me another 8 months to find another job in RBC Investment as Senior Officer in Operation.
Now I am 25. And I feel like stucked in this back office darkhole.
Is there anything that could help in going to the Front Office.
You mentioned CFA isn’t that particuarlly useful. Anything I could study in boosting up the chance?
Starting off in a small boutique as an assistant?
I’d strongly suggest moving to a boutique as an analyst at this point – you could also try networking and moving from back office to S&T, as that can be easier than IBD.