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.
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...
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.