Markov:
It used to happen all the time. Jim Chanos was a stockbroker, for instance, as was Julian Robertson I believe. Nowadays, you see it less often.

I'm pretty sure Buffet was a broker for a while as well.

Competition is a sin. -John D. Rockefeller
 
Hooked on LEAPS:
Markov:
It used to happen all the time. Jim Chanos was a stockbroker, for instance, as was Julian Robertson I believe. Nowadays, you see it less often.

I'm pretty sure Buffet was a broker for a while as well.

I'm pretty sure Buffet isn't a hedge fund manager.

 
Best Response

Quant geniuses - no. There's a specific style of HF that only hire mathletes and comp sci majors, but that's more of a (large) niche within the HF industry.

The best brokers have a good nose for stories / stocks that'll work. They get paid well to pitch PMs ideas that work. In the past, brokers were known to do a lot of work on names themselves. Guys who still do that are thought of as "old school", while today it seems the role is more about knowing your client and what they look for, and making sure they are current on news/research flow. The worst brokers call you on names that don't fit your style or focus and simply read the key bullets on the latest research reports.

It's a tough leap though to go from "guy who can spot a good idea" to "guy who should be managing a portfolio".

They also live in an environment where you get paid for a good idea but don't get un-paid for a bad idea (yes, your HF clients will be angry if you sell them on something that doesn't work, but there's no claw-back of commissions). That means that brokers are calling you on a daily basis with new longs / shorts and have a low hit rate of getting a client in a new idea. More importantly, it's the PM who decides whether the idea is really good or not (so brokers tend to not get a ton of credit for bringing a new idea unless its something the PM definitely would have missed).

Brokers (generally) don't have the analytical capabilities to serve under a PM. Yes, if you got your CFA that would show stronger capabilities, but it isn't like you'd be performing due diligence or modelling companies in your role as a broker - you'd get that info from the research team.

So all that is to say that it is an unlikely transition (but never impossible). You'd need to find a receptive audience who would think "I've got extra AUM and this guy seems like he can spot winners so why don't I hire him rather than just pay him commissions for the same role".

 

brokers/people in wealth management more easily transition to starting their own funds a la chanos, robertson, etc. as opposed to working at a fund. A good broker already has a list of wealthy clients that trust them, from that it just takes a good strategy and desire to run a fund to start your own

 

I really appreciate every ones input. If I do choose the broker positions the income potential is infinite if you think in technical terms, however, I completely understand the first 1-3 years is all cold calling and establishing a book of clients. But hey, I'm only 21, and if I don't like what I'm doing after 3 years I'll still be young enough and hopefully will have made some cash, and can go back to school (hopefully top) pursue an MBA, a CFA, and see if I enjoy the analyst side. I work my ass off in any job, therefore if I go hard for three years who knows what could happen.

side note:

It's all very nerve racking because I keep thinking "is this what I really want to do?". The truth is I don't know, I just know what interests me and the analyst and broker role both interest me in different ways. If I had my choice I'd be an analyst and be a broker second if it didn't work out, but its been nothing but tough luck with applying for analyst positions. Maybe I'm taking the easy way out by choosing a broker gig, but maybe I wont like the analyst position once I get into the nitty gritty 100+ hour work weeks. If anyone has been in a similar position any insight would be much appreciated!

 

At 21, do not take a broker position. You will fail. What rich person is going to give a 21 year old their money? Rich people usually have kids older than you, which means they won't take you seriously. Forget about transitioning to a hedge fund, you will fail at this job. You're kidding yourself if you think this is a stepping stone to something else.. You have almost a zero percent chance of success. Do something else, anything else really. If this was the 1970's or 1980's and some people still accepted cold calls, maybe you would have a chance.....but now!? Seriously, how many cold calls do you take and give money to?

Let me reiterate: don't take this job.

 
SirTradesaLot:
At 21, do not take a broker position. You will fail. What rich person is going to give a 21 year old their money? Rich people usually have kids older than you, which means they won't take you seriously. Forget about transitioning to a hedge fund, you will fail at this job. You're kidding yourself if you think this is a stepping stone to something else.. You have almost a zero percent chance of success. Do something else, anything else really. If this was the 1970's or 1980's and some people still accepted cold calls, maybe you would have a chance.....but now!? Seriously, how many cold calls do you take and give money to?

Let me reiterate: don't take this job.

This is exactly the advice I am looking for, thank you. My other option is pursuing a masters in financial risk engineering from Pace University or NYU Polytech, then hopefully some where down the road get an MBA from NYU or Columbia (assuming I do well on my GMATS and get 3.5 or higher in my masters program). My GPA blows right now at undergraduate, and my school is not known for anything finance related therefore I'd have to "re-invent" myself so to say at a masters program. Plus, I think a masters in financial risk engineering would be a pretty desirable degree to have for the hedge fund industry? correct me if I'm wrong.

 
gd91:
SirTradesaLot:
At 21, do not take a broker position. You will fail. What rich person is going to give a 21 year old their money? Rich people usually have kids older than you, which means they won't take you seriously. Forget about transitioning to a hedge fund, you will fail at this job. You're kidding yourself if you think this is a stepping stone to something else.. You have almost a zero percent chance of success. Do something else, anything else really. If this was the 1970's or 1980's and some people still accepted cold calls, maybe you would have a chance.....but now!? Seriously, how many cold calls do you take and give money to?

Let me reiterate: don't take this job.

This is exactly the advice I am looking for, thank you. My other option is pursuing a masters in financial risk engineering from Pace University or NYU Polytech, then hopefully some where down the road get an MBA from NYU or Columbia (assuming I do well on my GMATS and get 3.5 or higher in my masters program). My GPA blows right now at undergraduate, and my school is not known for anything finance related therefore I'd have to "re-invent" myself so to say at a masters program. Plus, I think a masters in financial risk engineering would be a pretty desirable degree to have for the hedge fund industry? correct me if I'm wrong.

I've never heard of a financial risk engineering degree, so I couldn't tell you anything about that. How is it different from financial engineering? I don't think this is a very popular degree among hedge funds, considering that I've never even heard of it.

It's unlikely you're going to get a job at a hedge fund right out of school or one of these programs, I would shoot for a job in research or trading or something like that right now. I think you're thinking about all of this in the wrong way, to be honest. "hedge fund" by itself doesn't really mean anything...what kind of fund do you want to end up at long term? If you want something like long/short equities, then equity research, banking, or asset management (mutual funds) are good places to start. If something more rates or derivatives based, think about starting out in trading. it's late in the process, so you might need to start a campaign with smaller firms for a chance to break in somewhere.

I don't know how shitty your grades are or your school is...how bad are we talking about here? How many people have you contacted at some of these firms (not online resume submissions)?

 
SirTradesaLot:
At 21, do not take a broker position. You will fail. What rich person is going to give a 21 year old their money? Rich people usually have kids older than you, which means they won't take you seriously. Forget about transitioning to a hedge fund, you will fail at this job. You're kidding yourself if you think this is a stepping stone to something else.. You have almost a zero percent chance of success. Do something else, anything else really. If this was the 1970's or 1980's and some people still accepted cold calls, maybe you would have a chance.....but now!? Seriously, how many cold calls do you take and give money to?

Let me reiterate: don't take this job.

100% correct. Sb for you.

 

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