I work for a powerhouse AM firm and am curious if any other firms have ops group that seem more elite than some FO roles.
The group is labeled Dividend/Reorg. From what I understand, they're responsible for setting up and processing all client dividend payments on our firms mainframe system. This alone seems interesting considering how damn confusing the mainframe can be. They also handle all corporate actions, balance our firms acct(long/short positions), and one of the guys is our firms "security master". Meaning if any of us(traders) want to trade a security that isn't on our mainframe, he is the one to set it up(not sure how).
What intrigues me so much is their exposure to external firms dividend announcements. Their group is highly regulated and unlike all other departments at my firm, they're actually not allowed to trade at all. I'm assuming this is because they hear of dividend announcements before they are made public. That alone blows my mind?? How is that middle/back office? Do all firms have groups like this?
Makes me question why Ops is so heavily frowned upon.
Do the role you love and don't worry about what part of the office you sit in. If you find the work boring, look for something else. Ops sounds like a terrible place to be, but throw a BS word like Strategy in front of it and now you're talking Tier 2 consulting firms...
Completely agree. Did I mention these guys are in at 7 out at 5? I've been a long-time reader of WSO, but it's honestly ruined my perspective on operation guys. Sure, a lot of the roles are processing and faxing docs, but some seem like a pretty decent transition role.
When I first started my title was Operations Analyst, and it wasnt at a bank. Definitely no one I have interviewed with since has scoffed at it or called me a BO monkey lol.
I got my foot in the door via operations at a large custody bank. Most of the functions you describe above are done in parallel with the asset manager's custodian, so I'm pretty familiar with the work. (Our bank also provides an outsourced investment operations product for AMs who don't want to do it in house, and that team would regularly poach from our custody operations team because the competencies were so similar).
The core responsibility of many junior operations jobs is to complete an audit checklist to reconcile the data from one system or report to another, or worse, glorified data entry. Let me tell you: that can be boring. Sometimes mind-numbingly boring. For many, it was easy enough to never take the role beyond a basic understanding of the checklist in front of them. For those people, the job couldn't have been too much different from punching a clock in a factory, imo.
That said, the job is 100% what you make of it, and there was a lot about the work that I found interesting and intellectually challenging. "...considering how damn confusing the mainframe can be." No joke. There are some pretty complex systems in place to handle all of this data, and there's a constant balancing act to design them so they're custom enough to meet all sorts of unique needs, but not too custom such that they're cumbersome, inefficient, or overly susceptible to user error. The job gets way more interesting once you learn your institution's system well enough to contribute to strategic design/process conversations.
As for your firm's "security master," I'd venture he's the guy that enters every new security with the correct parameters so your reporting system treats it correctly, especially from a cost accounting perspective. Most of this work is probably very straight-forward (ie lining up each security with its CUSIP), but I'm sure it gets much more interesting with more exotic derivatives or illiquid assets. Still, its mostly an IT/accounting job.
"I'm assuming this is because they hear of dividend announcements before they are made public." I really can't imagine a reason this would be true. The dividend/reorg team is just going to input these announcements (dividends, splits, mergers, spin-offs, etc) into your system and check they're accounted for accurately and reconciled with your custodian. No way they're getting non-public information.
Ultimately, most operations roles require one or more of: IT/programming, accounting, or process/project/people management skills. But you can go an entire career in operations without ever having a clue about the "whys" of finance. You'll never conduct any type of analysis that would inform an investment decision. It's an important function and it was great place to get my start, but it can be pretty hard (impossible?) to move the needle in operations. That's why the reputation and the pay aren't usually "elite."
This is a very on point description of ops in banking. On a side note, there are some jobs considered to be ops that allow the analyst to calculate everything from the fund's underlying asset value, to investor distributions. I would imagine this gives one tremendous visibility in the firm.
It's not revenue generating. That's why ops is paid less and frowned upon by starry eyed college grads. At the end of the day, it is generally true that revenue generating staff could fulfill ops staff funcions. The opposite is generally true as well.
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