Oooh - Stay away from "back office" technology/IT jobs in finance
The general stereotype, consensus and perhaps truth seems to be all positive for front-office and all negative against back-office roles. Went through all the blogs/forum posts on the topic and am not gonna try and fight the tide. Does this mean, for someone with a computer science degree and 5 years of software development experience in non-finance industries, the recommendation would be to stay put where they currently are, outside of financial firms? I've been working at product-based software companies (both big and small) over the years but have always yearned to be at a HF/AM shop instead.
Why is being a software developer in Asset Management or at hedge funds being shunned upon - from the interviews that I have been invited for, at a few brand name HF/AM shops, I saw a pretty decent level of smart professionals conducting these interviews. They came off as polished individuals, seemingly appearing fit to interface with clients.
If working at a HF/AM shop in software development is considered a career path with a negative association attached to it (even at $120k-150k/yr salary ranges??), why is working at product based software companies in a different industry, such as pharma/biotech/insurance etc. (shops where the "software" IS the "front-office") any better (at a marginally lower range, say $110-130k)? While the top percentile of people in any career may end up being successful compared to the rest, the average Joe with a traditional software development career at these non-financial shops isn't making anywhere close to 7 figures either.. I beg to question, if someone that brings home $120-150k building software at a HF is looked down at, shouldn't the same guy then also be looked down at no matter where else he builds software by the folks out here?
I believe there are definitely some high IQ as well as polished and personable individuals that work in software development outside of finance. Why is it conveyed upon as being really hard for them to transition over to front-office roles? It is upsetting to be told this when one is willing to study and learn whatever the pre-requisites may be, to enter such roles (CFA? Economics/math/stats undergrad all over again? Anything else?).
Front office is a client facing role. Clear communication and writing skills are tantamount. It doesn't matter if you claim you have a high IQ, your writing is terrible. Studying for the CFA only indicates interest in finance. You should determine whether that "love for wanting to be part of Wall Street" is a pipe dream that you are trying to convince yourself.
Thanks sir fearless. Heading to the library now.
Thanks sir fearless. Heading to the library now.
In my view, unless you're doing specialised IT work with a team that needs specialised IT services that they can't provide themselves, a role in a hedge fund/AM/IB IT team is nowhere near the revenue generating parts of the business. The role will teach you nothing about how they make their money. You may as well be working IT in a law firm or some corporate.
1 Thanks SSits. . . so then I beg to ask, who are these folks that do end up taking these jobs? I have changed over 5 full-time jobs and interviewed at 20+ software jobs and can definitely speak to stating that the interview process is definitely tougher at hedge funds compared to software jobs in other industries from the exposure I've had. From that it seems like the people already employed in the financial domain at least seem to be smarter. . . what is the justification these people already in the financial tech space gave to themselves when deciding to stay here?
2 Also, are you then saying if I am planning to take the CFA, knowing the back-end process in finance-tech roles will give me absolutely zero advantage in understanding the CFA curriculum?
I don't know. They fix my IT problems and then I hang up the phone.
Yes I am.
I'm curious what exposure "towards the investment process" you see yourself getting working in IT at a financial company?
Referring to job descriptions like a couple of these at AllianceBernstein:
1 http://careers.peopleclick.com/careerscp/client_alliancebernstein/exter…
2 http://careers.peopleclick.com/careerscp/client_alliancebernstein/exter…
. . . . so would these qualify as dead-end jobs too and I'd learn nothing more about finance/investing taking up these vs. staying at my current job (where yes, software IS the front office)...?
One would be working on enhancing and supporting the software thats used by portfolio managers. I don't see how this won't make one more aware of capital markets and how transactions are processed on the backend vs. a software developer that say, writes code for non-financial industries.
One would be working on enhancing and supporting the software thats used by portfolio managers. I don't see how this won't make one more aware of capital markets and how transactions are processed on the backend vs. a software developer that say, writes code for non-financial industries.
iConsult gave you the best advice in this thread so far but honestly don't see you as being smart enough for those types of roles based on this thread
The guy who does this for our portfolio management team does not get any real market knowledge besides some very specific aspects that are useless without the context of all the other information he's not getting.
If you want front office, and you work in software, why not try to go somewhere where software IS the front office?
Having worked at startups as well as big public software product based companies in various sectors (all non-finance based), and having seen the career path of the average software guys that have been at these places for the longer term 10+ years ahead of me, I don't see how they are doing any better than the software guys in finance firms this forum tends to hate on a lot. I guess my point is, if you didn't have major equity at the non-finance startup, or are in your 10th year as a software guy at some big software company growing at the rate of inflation, you don't have any sort of "multiplier" in your income either, the way a sales/front-facing role might have.
So, I'll agree that doing software in a financial firm isn't the last stop to success, but I would tend to disagree on how thats any worse than coding at a business "where software is the front office". There are way too many average Joes (smart IQ but I only use the word average in comparison to potential 'wall street pay') in their 10th year at these places at $150k/yr range.
What they say is true about back office work at a bank. It is boring and dull and you are in no way a part of the business.
IT is IT wherever you go, and honestly, if you have a passion for software engineering, stay at your current job. If you are interested in working in finance, then switch, but know that it is a long road to your goal.
The key is to network and work towards your goals. You're referring to client-facing roles, so I wouldn't think that taking an IT role at a bank would be the best decision. Perhaps try to gain some business knowledge and sales skills (consulting for IT, business school). If you're interested in a more technical role at a bank that IS involved with some investment decision-making, trading, etc., IT is literally the rock bottom. It would take a lot of work to move up, but it is possible. Network hard and prove to the people you are interviewing with that you are ready to make such a serious transition.
The CFA isn't enough to "break in."
I have recently made this jump so maybe this can help. Sorry for the long post but it's all relevant to how I made it to front office. Here's the summary: your back office job doesn't mean shit and they don't give a fuck about your projects or whatever. You have to know the job you want and investments inside and out with relevant ideas they can make money off. In the 4 hours of interviews I had I spent less than 2 mins talking about my back office experience. Do not bring it up first because most front office people will immediately check out mentally when you bring it up and you have no chance, regardless of how good you may actually be.
Firstly I am in Toronto and the front office employment market is not very optimistic at the moment. My story may not be applicable to those outside of Toronto.
I always knew I wanted to get into Equity Research, sell side or buy side. since undergrad I wrote many ER reports myself on stocks and always loved doing it. My stocks also performed relatively well and that fed my determination to keep at it.
I graduated UG in May 2008 from a non target school with mediocre overall grades but one of the highest in my finance classes. My parents just moved to the US at the time and my mom was sick with terminal cancer so to help her I went with them. I took up a job in the accounting department at a paper mill while there. They offered me the controller position before I left but I turned it down knowing my ultimate passion was ER. The salary was good relative to how easy the job is most of the time, let's say 80k base.
Afterwards I came back to Toronto, just wrapped up CFA level 1. With my background I had no success with landing FO interviews. Money was getting tight so I needed something to pay the bills. I took a job at the call centre for a global mutual fund company, less than half the offer I got to stay at the paper company. I kept up with my reports and through this job I was able to meet local PMs that came for presentations. They helped me refine my research and report writing skills by giving tons of feedback.
A job came up in the data management department. I got the opportunity to learn bloomberg and talk with global PMs and traders for support and system project work while finishing the CFA. Did this for 3 years while looking for a job in ER.
I kept at my reports and meeting with local PMs. Last year one of them really liked one of my ideas. We spoke at length about it then he went to meet the management team in Europe. He then bought a block of shares. The same day he made the buy, an analyst position opened on his team. I thought this is it! I interviewed with another junior PM and she didn't seem all that impressed with what I had done. They told me to give another idea so I did. They said they had a bad experience in that industry and will never buy into it again. I tried to explain why it was uniquely different than other industry participants but they didn't agree (that stock is up over 100% when I recommended it a year and a half ago). Then they told me they wanted someone with south east Asian experience, whatever.
Had interviews in sell side ER after, always heard the same response: we like you and you accomplished a lot by yourself but here's this guy from another bank who already covered the same stocks. I kept at it and just landed a job in ER at a boutique in Toronto. applied through my local CFA society, no connections at this shop. I mentioned almost nothing in my application about what I actually did in data management. I just mentioned I worked with senior PMs and traders as well as the reports I wrote for the PMs. This time they wanted some one with a strong background without direct ER experience. I beat out people with top marks at local target schools with MBAs.
The point is you have to know investments, be confident, and pitch profitable ideas. Your school, CFA, and back office job doesn't amount to shit.
Anyway that's my long drawn out story, sorry if it's too long but hope it helps someone who was in my position.
if i got an email from OP i would ding him solely on his writing style without reading any of it
Thank you for your feedback. I have edited my original post and hope I am able to convey my questions a little better to the folks on here! :-)
If you want to work at a HF/AM shop in software development and make the 120k-150k a year, go for it! Give the job your own connotation - don't pay too much attention to negative reviews on a topic like this. The financial services industry is a prestigious industry that demands a high degree of professionalism which is why most of the IT professionals seem smarter to you. I consider IT in finance a step up from your typical software developer. I say if you want to do IT in finance, do like Nike and "just do it."
Voluptatem aut labore maiores et. Consectetur sequi a et veniam sequi voluptatem aut. Ut quia quasi eius exercitationem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...