From trader to consultant
Hey guys,
**Has anyone made the switch from trading to consulting (or know of anyone who has done this)?
**
Asking again since only search hit I found was from 2011
I'm currently attempting to do this very move. I've spent my career working in Chicago prop, both as an options market-maker and as an algo futures guy. From 2013-2016 I managed my own capital trading algos, which was great when the strategies worked, but sucked when they didn't! At the end of 2016 I decided to quit trading, but was unsure what to do next.
In 2017, I began a freelance consultancy in which I primarily targeted traders and small trading groups. I offered custom tech solutions, mostly building algo strategies, but also offering advisory on simple things like tech connectivity, brokerage/clearing negotiations and third-party application sourcing. It's been a good experience, and I realized that I enjoy the aspect of interfacing with clients and partnering with them to deliver solutions.
I also discovered, through a lot of self reflection, that I truly didn't enjoy trading. Yes, it was great when I made good money, but I was bored with it. I enjoyed the thrill of developing and testing a potential strategy, but when it was actually running live, I wanted to just move on to the next project. Plus, it's tough to sit in front of monitors for hours and hours a day, not really interacting with humans...
Since Feb, I've really focused on getting my foot in the door somewhere. I'm reaching out to any and every consulting firm I can find, from MBB to the local guys. I've had some phone screeners for experienced hire roles with Capco and Accenture, but they never went further because I didn't have that "core" consulting skill set.
Outside of soliciting more freelance work outside of trading-related projects and continuing to network my way in somewhere, what else can I do? I built a case study deck of my projects, and I've received positive feedback on the content, but so far it hasn't made a difference in my success throughout the application process.
Btw, it might help to disclose that I come from an undergrad that's known more for its SEC football success than its academic success! Oh, and I have a JD.
Thanks all, looking forward to the feedback.
Hi raymam1, any of these discussions helpful:
Calling relevant professionals! pkossako QRIFLS Pallav-Jha
Fingers crossed that one of those helps you.
giving this a bump
This is not what you want to hear, but no, not really.
Not always, but consulting firms will consider traders from big banks, either because they want to sell transformation/risk work to the trading arms of their banking clients, or because they assume you have a high IQ and know how to work your way around institutions and you have a credible story for change.
I’ve never seen a tradee make the switch from outside this mould.
You’d need an MBA as your transition platform.
thanks for your comment...
I chatted with one other local Chicago guy and noticed he went to Booth. It seems that the MBA certainly didn't hurt his chances into making that transition - but I just can't fathom a) going to more school or b) paying $150k to make the transition
And what do you want me to say?
Booth will absolutely put you in the interview room and give you all sorts of resources and classmates to case prep with.
But it still has to be you who performs well in the interview.
Of course, you have to actually get into Booth, and to do that, you kind of have to want to pay $150k to go back to school. Which you don't want to do.
So...
Well there isn't much else I need or want you to say regarding the career move...
Ideally I am looking for a little more color commentary to hear perspectives, if they exist, on various paths that people took to make the move.
Regardless, I appreciate the feedback!
My current situation is a little bit like this so I will add my 2c..
I became a Business Analyst and later a Project Manager as a response to the great recession. In 2008 I was a freshly minted CFA Charterholder working for a Hedge Fund Administrator while trying to figure out how to transition to one of the clients. I HATED working for the administrator and it showed...I was let go in October of that year as assets under administration plummeted and 2 of the funds that I covered folded. At that point I changed direction because trying to break into the HF world in 2009 just didn't seem possible.
Before that I had worked for an Equity Options Market Making firm back when the business was on physical trading floors (before it went all electronic - that drove the company I worked for out of business). When they failed I worked in Middle Office at a BB but left when it became clear there was no way I was getting to FO.
I have worked for a few smaller consulting firms. I have avoided the bigger ones mainly because I refuse to travel. I live in NYC and figure if I am going to do Capital Markets based work I should not have to leave the city. Plus, I have 2 young children and they mean the world to me.
Most of the work I have done in the last 8 years or so has been centered around replacing one pricing / trade execution / reg reporting system with another at a number of the big banks. I do ok money wise ( about $ 170k or so annualized) but I am out of work for periods in between projects. This is ok for me because my wife is doing well and I can pick up the slack with the kids, house, etc. As you and jtb already know - the high end places like McKinsey seem to be super selective and you probably don't have a good shot....but there are a million smaller consultancies that you could team up with.
From where I sit the biggest challenge of pursuing this from an entrepreneurial standpoint is: getting on the approved vendor lists of major banks. I have no clue how to do this... but if you can partner up with an existing smaller firm that is on or can get on approved vendor lists at major banks I am sure you could make quite a bit of money.
Hope this helps...
@Port Ricky thanks for sharing - sounds like you are independent and/or do freelance?
I've had a few bites with boutiques here in Chicago. I've recently had a conversation with an ex-Northern Trust guy who now works in the Finance Knowledge Center at BCG. Not client facing, but is a route in...
I haven't read the wall of text you put up but I know someone pretty closely who went from trader --> MBA business schools">M7 --> consulting and can answer (some) questions on their behalf if you're still interested.
Hi Making Gravy that would be great, I'd appreciate you and your friend's help
Hi.
I was in the same situation and my motivation was quite similar (boredom, long hours sitting on your ass etc). So i moved from trading to consulting (big4). I didnt want to do any "strategy" stuff, i was mostly interested in financial risk and related topics. I would say that was the reason for choosing big4. And frankly speaking, i suspect i was not an ideal candidate for MBB-kind of firms. Transition was quite smooth. However, i lost in cash, but i have strong belief that neither bank nor consulting will make you rich. The only way - own business or personal account trading (not gambling, but smart trading/investing). I guess my case is a little bit different as i have degree from ivy league uni, i have experience in banking (not prop shop). The latter may be important as essentially i moved from client side to consulting having experience with banking internal stuff (regulation, risk man ). So in your case i would say mba or ms degree may be very supportive. Or you should keep running own consulting business making your case on that.
In general, prop shops are considered in corporate world mot very seriously unlesd these are big names.
Try big4. Spend few years there, go further. This second, non-mba, option.
I think you easily could. The PM on my current project came directly from prop trading and went to deloitte --> current consultancy. You've probably accumulated a fair skillset and knowledge base to be valuable client side when it comes to financial services. I'd look into FS consulting at big 4, accn, ibm, fti, etc.
Its definitely possible in some firms. Big 4 FS practices as mentioned earlier are more flexible in terms of hiring non traditional employees and you can use that as a stepping stone.
I do know that Accenture hires former traders in their trading optimisation teams in the UK and Singapore, but I'm not sure what the situation is in the US. You may want to give that a shot if you are open to moving abroad.
https://www.linkedin.com/jobs/view/accenture-trading-investments-optimi…
https://www.accenture.com/gb-en/careers/jobdetails?id=00578089_en
I worked with an MBB project manager who previously worked for ~5years as a trader.
However, it seems that he used an MBA to transition to consulting.
I'm sure it's doable but most consultants probably day dream about being a trader so it's not common...
You could easily break into implementation consulting or financial services strategy at a big 4 level firm... I doubt you can get MBB without MBA. Try networking your way in for a few months.
My honest advice is learn to love trading and get rich. It's an actual skillet you have, vs consulting which is more vague. As far as i know, trading is far more lucrative and prestigious and you can probably live anywhere you want. Would not advise consulting over your current path.
Hi all,
I'm thankful for the additional commentary and glad to see more anecdotes. Thus far I have not encountered anyone who went from trading into MBB, so I'd like to hear more about that background...
I'm currently chatting with a Strategy& guy and looking at KPMG's fin mgmt consulting practice group, and I just began my true attempt in networking through MBB.
Good discussion thus far
candid questions from a trader weighing switch to consulting! (Originally Posted: 11/20/2014)
Hi all - firstly, please excuse the neophytic nature of any of these questions; I've done some thorough searching, but still had a few questions regarding the industry, as well as some guidance as to whether consulting truly is the right calling for me. As an abridged intro, I've been working on Wall Street for five years as a derivatives trader since graduating from uni. There are a number of things I enjoy about trading; the constantly moving nature of the markets; the macro/strategic acumen needed to generate alpha. Things I don't like/why I'm leaving: just hate the pseudo-gambling nature of trading; yes you might have a great idea, but ultimately you're at the mercy of a mercurial market most people can't outperform; the stress that comes with sitting on a position, the lack of flexibility/exit opps outside of the industry, and lastly, the regulation of banks is making trading a lot less sexy/fiscally rewarding than it was pre-'07.
Enter consulting: I'm drawn to the strategic nature of the work, the ostensibly smart people you work with, and the apparent flexibility of exit opportunities thereafter. After a number of rounds, I've gotten an offer at a boutique strategy consulting practice.
Questions:
What are the moments on the job that make you wish you were doing something else? i'm not simply asking about the "hardest" part of the job; but those moments everyone faces in any job, where the drudgery of the work seems to consume/override any positives temporarily, that make you wish you were in another career.
Is the traveling truly a grind? Do you get used to it after a while? Are you effectively wiped by the end of the week?
Because of all the traveling, is there time to pursue side projects/entrepreneurial stuff, or are you completely destroyed by the end of the week/traveling?
On the plus side: in spite of all the grind/cons, do you feel truly edified/fulfilled by the job, both intellectually and professionally?
Why does it seem almost everyone only spends 2-3 years at most at consulting firms, then tries to leave? What's the biggest barrier to lasting at a firm and making partner, etc?
How impervious (or susceptible) is a skilled management/strategy consultant to downturns in the economy? Is it like banking/finance (in and out), or do most consultants find a place to land?
What is the proverbial 'nirvana' for many consultants? Making partner? Running a business? CEO of a Fortune 500?
Is an MBA pretty much expected to keep climbing the ranks in the corporate/consulting track?
Are exit opportunities for boutique practices (think LEK/Marakon/Parthenon) considerably less than MBB?
Apologies for the mouthful! Appreciate any feedback! Thanks -
All great questions - would be happy to share my thoughts. I was at MBB for 2-3 years then switched to a boutique firm for better lifestyle post-kids and for a tighter focus on the type of work I liked best vs. the generalist model. Been now at the boutique firm for ~5 years and am now a partner. Also, coming from a quantitative background, I had some wall street offers when exiting academia and can share my thoughts on why I chose consulting over finance.
First, why I chose consulting in the first place and continue to love it 8 years later is the variety of intellectually stimulating problems I get to work on that are based in the "real economy". Finance would have been initially more lucrative than consulting - not so sure these days - but I had had enough of abstract number crunching and wanted to get some real world experience that touched upon a broader set of interests and skills.
When I first started at a MBB I thought it was nuts that people left after only 2-3 years, but when you get to that point you understand why. Unless you want to run the distance to partner, the exit opportunities don't get better after that point, when you've essentially "punched your card". If you end up working in NY and focusing on finance clients, you wouldn't be doing so much traveling and lifestyle might be an improvement. I was working in less geographically-concentrated industries and so was traveling every week Monday-Thursday, and on those travel days working until midnight or so. It was tolerable when I started and still saw myself "paying my dues" when moving to a new career field, but I don't think I ever saw that life being sustainable in the long run.
It's a lot different in the boutique world where I'm at now. I take 1 or 2 day trips a week, else am working in the office. So ~3 days a week I see my kids in morning and after work and have my weekends largely free. It's hard to see though how I would carve out time for another professional interest such as a start-up. To succeed at the partner level, you really need to be "all in". There will still will be crunch periods and the role is more demanding than in industry, but for the independence, variety, stimulation, and compensation I wouldn't now do anything else.
Regarding exit opportunities for MBB vs. boutique (assuming latter is a "prestige" boutique), the difference is more one of breadth vs. quality. MBB generalist route is great if you don't know what you want to do - it opens a lot of doors and allows you to explore different industries. Boutique route forces you to choose earlier, but if you land in the right industry for you, you build up experience and your network faster. Exit opportunities are as high in quality, but more correlated / limited to the focus of the boutique.
Finally, regarding "nirvana" - it depends. If you continue to enjoy the client-orientation mindset of consulting and the variety of experiences in the long term, staying through to partner is great - good lifestyle / compensation balance and you have far more independence than in an executive role in a company. Some people decide they want to be in the client's seat and be the one making the decisions and taking the credit, and so move to industry. But don't expect to make a jump right into a CEO role, or really any role with P&L responsibility until you establish yourself through some initial assignment in a strategic role.
Hope these thoughts help as you consider the transition.
@KenB This was fantastic, and precisely what I needed to read. Cannot thank you enough for the wise words. Do you mind if I PM you with a few more pointed questions? Best -
@"KenB" Thanks for the write up!!! I really enjoyed it
Sure - if you have further questions, just let me know.
Good discussion SB'd
From Energy Trading (internship) to Full Time Management Consulting (Originally Posted: 06/19/2014)
Hello All!
I have a few questions in regards to full-time management consulting recruiting. As the title mentioned, I am currently a rising senior interning at a energy trading shop and have found out that it is not for me. I want to personally work WITH companies and solve solutions, not sit behind 8 monitors all day, every day for the rest of my career. The career tragectory is also pretty bad...as the skillset learned pretty much transfers to nothing else except trading.
So a little background about me: - Attending a decent public university (think University of Texas, Texas A&M, etc) pursuing degree in finance - Cumulative GPA: 4.0 - Currently interning for supermajor (think BP, Shell, Chevron) in their trading arm - Previously done a internship after sophomore summer at a commodities analytics house (think Bloomberg, Thomson Reuters but for energy)
Since I am not very familiar with consulting FT recruiting, is it still a possibility to lateral over? How would you spin a story with a trading background, and how does it look to a consulting recruiting if this candidate didn't have any previous consulting internships?
I guess the good thing is that I enjoy the energy industry, so I would like to focus on that. Just not trading.
Any advice would be appreciated..thx!
(Update 7/25/2015)
I thought I should update this thread since its been about a year since the last post, for people that are interested or are thinking about making the change. I have currently been working full-time in consulting for a month and a half, and I absolutely LOVE it! The environment and culture at my shop is absolutely fantastic. I don't feel scared or doubtful asking questions because the person might not have time, and I definitely don't get yelled at for being confused at a specific concept. This is extremely close to a university classroom setting (which I excelled at) and my co-workers are very similar to the best professors that I've had. One thing that bugged me the most when I asked questions during my internship was (if I was lucky to get an answer) that it always started with "Well, if you think about it a little harder" or "If you took some time to actually look at the problem." That definitely doesn't happen here.
I've learned that culture and fit is the most important thing in a job. It can make 10 weeks either hell or an amazing experience. So for any rising seniors who didn't like their internship, don't be afraid to look elsewhere!
Consulting firms do hire a lot through FT OCR, are you at UT BHP, because that and A&M are at different ends of the spectrum.
Would you guys say that recruiting for full-time is easier or harder than SA recruiting?
Did you get your energy trading internship through campus recruiting or online application?
Campus recruiting
Did Shell and BP go to your campus specifically for trading or as part of their general recruiting? How competitive are the energy trading internships?
Pretty competitive and yes it was specifically for trading. Now any advice on the consulting side of things?
From what I understand indirectly, consulting firms don't care about your previous experience as much as, say, banks. Of course I can be wrong. They do like high GPA. Your 4.0 GPA certainly would help a lot.
Now, there is an issue. If you get this internship though OCR and you get a return offer and accept it, the career office of your school may not allow you to renege it and do OCR for consulting. But if you get a return offer and turn it down, what happens if you don't get the consulting offer? So you need to be very careful in evaluating your options.
By the way, what kind of kids get internships for energy trading? What are they looking for in the applicants? My very vague impression is that there are more A&M kids than UT kids in energy trading. Am I wrong on this?
more aggies in energy trading from what i've seen; the same for ut ibd and consulting
All I know is from my own experience recruiting at consulting firms from an energy trading internship background. But what I experienced is that once you're in the interview process your past experiences won't have much bearing on your outcome. In networking though, having had bigger name commodity internships helped a lot with meeting and speaking to people in the Texas offices of consulting firms. This certainly resulted in me getting interviews I would not have been offered otherwise, but again, it didn't matter in the interviewing process. If you're in Houston definitely use this summer to set up a ton of coffees/drinks/lunches with consultants in Houston.
Hi Hedge. The types of kids interning with me at my shop are all really nice people. I don't know too much of their backgrounds, but they all seem really bright. There are alot of Aggies at my shop, but that's because A&M is a target and there are alot of older alumni there that are Aggies. From what it seems like, they look for work ethic as their #1 trait (trading isn't rocket science, just need to pump in the hours to do well). It was fairly simple for me to convey that with my GPA..but if yours isn't very steller then I would say really show them that you are willing to work hard
Thank you for the reply. I am not a student. I asked these questions for a Texas relative of mine.
Did you do Shell's online assessment tests? What's conversion rate from internship to full-time at Shell and BP? After the graduate development program, how many get to be junior traders?
Would you say if one wants to do energy trading, A&M is a better choice than UT?
So I've started to reach out to everyone in the consulting industry. My internship is ending in ~3 weeks or so, and by now I am 100% certain that I am not interested in this business. Too much of the "I'm here to make money, intern go wash my car" kind of attitude. I know I wouldn't be able to grow and progress with the type of culture here at this shop.
If you come back as an FT, you would no longer be an intern and you won't have to wash the car.
(Update 7/25/2015)
I thought I should update this thread since its been about a year since the last post, for people that are interested or are thinking about making the change. I have currently been working full-time in consulting for a month and a half, and I absolutely LOVE it! The environment and culture at my shop is absolutely fantastic. I don't feel scared or doubtful asking questions because the person might not have time, and I definitely don't get yelled at for being confused at a specific concept. This is extremely close to a university classroom setting (which I excelled at) and my co-workers are very similar to the best professors that I've had. One thing that bugged me the most when I asked questions during my internship was (if I was lucky to get an answer) that it always started with "Well, if you think about it a little harder" or "If you took some time to actually look at the problem." That definitely doesn't happen here.
I've learned that culture and fit is the most important thing in a job. It can make 10 weeks either hell or an amazing experience. So for any rising seniors who didn't like their internship, don't be afraid to look elsewhere!
Prop trading to management consulting (Originally Posted: 01/29/2011)
How often does this type of transition happen, and when it does happen, is it usually a more or less lateral move, e.g., top trading firm --> MBB?
It seems that bankers often make the move to consulting, but I was wondering how candidates with prop trading backgrounds are viewed by top consulting firms
I think one of the problems/risks with prop trading is that no one outside the field recognizes the names. I doubt many at MBB really know what GETCO or Jane Street are, even though to people "in the know" they are probably more prestigious than a BB. Also, the skills are very different, so I would be surprised if it were easy to move from prop trading to MBB, even coming from a top trading firm like those I mentioned.
Depends on the type of trading being done (algo, day trading, directional, fundamental analysis, etc.)
Depends on education background (undergrad, MBA, other masters, PhD)
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