par Sarah Butcher
30 Mar 2005
It's the dream of many a settlements clerk, product controller and IT or risk specialist: leaving the relative obscurity of the back or middle office of an investment bank, heading for the bright lights of the front office, and transmogrifying into a very well paid trader or salesperson.
How realistic is it? Not very, say those in the know. 'A lot of people send us their CVs and aspire to moving,' says Shaun Springer, CEO of Napier Scott, the capital markets recruitment firm. 'But we wouldn't dream of presenting a back office person for a front office role.'
Anne Tinsley, a consultant at Morgan McKinley, the back and middle office recruitment specialist, is equally circumspect. 'Ten years ago it was a lot easier to move from the back office to the front office. Today it's become a very tough call.'
Why? It's all down to increasingly complex products and new graduate training programmes, say recruiters. Now that brilliant university graduates are specially trained in the arcane art of trading exotic fixed income derivatives, there's less chance for outsiders to move across. However, this doesn't mean it's impossible.
How to do it
If you do want to move out of the back office (administrative and support functions such as clearing, settlements and personnel), or the middle office (risk management, controlling, IT, desk assisting), into the front office (well paid revenue generating areas such as sales and trading), several things - must-haves, really - will help you on your way:
A friendly boss. Almost all moves into the front office are made internally. If you want to shift, you'll need someone in the bank to sing your praises.
A job which brings you into contact with salespeople or traders. Typically, this means working in the middle office. Geoffrey de Beauregard, head of the equity group at Natexis Bleischroder in Paris, says it's not uncommon for people to move from the back office to the middle office, and further forward.
Youth. Sad to say it, and it will soon be illegal to anyway, but recruiters advise it's harder to make a move out of the middle office into the front office once you're much past 25.
How not to do it
Several parameters are likely to make your front office quest a whole lot harder:
Working miles (literally, in the case of JP Morgan's settlements division in Bournemouth on the UK South Coast) away from the front office in a clearing and settlements division. 'It's almost impossible to move into the front office from settlements', says Tinsley. 'You have no interaction with the traders.'
An MBA. Plenty of back office staff think an MBA will improve their chances of making the front office transition. Think again. 'Banks won't jump at someone with a background in operations for a front office role just because they've studied an MBA,' says Andrew Hanson, head of operations recruitment at Robert Walters. Cass Business School, a City of London-based college was asked to provide an example of a former MBA student who moved from the back to the front office. It couldn't.
Announcing that your heart really lies in the front office during an interview for a middle or back office position. If anything, this is likely to discourage a bank from hiring you altogether. In his book, My Life as a Quant, Emanuel Derman, former head of the quantitative strategies group at Goldman Sachs in New York, says he quickly lost interest when interviewees for quant positions revealed aspirations to become traders. 'I needed people eager to do hard analytical work,' he says.
Sending your CV to a recruitment company in the hope they'll recognize your latent trading/sales talent. As Springer says, without prior experience they'd never dream of putting your forward. The only place your r閟um?is likely to go is the bin.
Aspiring to move from the back or middle office into corporate finance and mergers and acquisitions (M&A). Forget it, you have more chance of discovering Elvis Presley in your attic. 'Corporate finance has a very structured training programme,' says Tinsley at Morgan McKinley. 'They hire top-tier graduates who start out as analysts and go on to become associates. There are few other routes in.'
From accounting to trading
Moving into the front office may sound impossible, but it does happen. Paul Canty, a trader in the fixed income derivatives division at UBS Investment Bank in London, has done it. Having begun his career at Ernst & Young as a chartered accountant in the auditing business, Canty joined UBS as a product controller. 'I didn't want to be a trader at that stage', he says. 'At that point, I wasn't really aware of the roles that were available.'
Two years' later Canty was offered a position as a desk assistant on a fixed income trading desk. His boss intervened on his behalf and secured him a role as a trader instead. 'It helped that I already had a fairly close relationship with the desk and that he vouched for me,' he says.
Christine Morrissey, managing director and head of fixed income derivatives trading at UBS, says ACA qualified accountants working in business control can be a good source of trading talent: 'These guys are hard working: getting certified is a long process.' Morrissey says UBS moves someone from controlling into fixed income derivatives trading every couple of years. Around half of them work out.
From desk assistant to trader/salesperson
The best springboard into a front office trading/sales job is a role as a desk assistant. Desk assistants sit alongside traders and salespeople, doing everything from looking up prices to liaising with the back office on failed trades and taking simple orders from clients. If it sounds like a kind of apprenticeship, it is; Hanson at Robert Walters says desk assistants used to be the natural source of future sales and trading talent. That privilege has since passed to graduate trainees, but good assistants are still well situated.
'It's all about showing enthusiasm and interest,' says one former desk assistant turned trader. 'You need to create the right impression and develop a network of people supportive of your cause.'
It can also help to hand in your resignation. Banks have been known to promote good desk assistants who threaten to move elsewhere.
The experience advantage
Despite the odds against metamorphosing from an IT specialist or a controller into a trader or salesperson, it's worth remembering that you have one thing in your favour: experience.
Too much experience will count against you, however. Banks look unfavourably on people in their late 20s with more than eight years operations experience and a penchant for trading, says Tinsley. But a little experience is no bad thing. 'It's often better to promote someone internally than bring in a graduate straight out of school,' says Morrissey. 'They already have connections within the bank and are less needy than graduates can be.'
Finally, De Beauregard at Natexis says time in the back and middle office should be a mandatory prerequisite to working in sales: 'If a salesman doesn't understand how his transaction is settled, he shouldn't be on the trading floor in the first place.' It's worth bearing this in mind as you make a break for the front.
