Hi,
Would a position as Risk Analyst in a big investment bank be considered a middle office role? What about P&L Analyst?
Would they be bad starting roles in the industry for someone who wants to work in the front office in the future?
Thanks
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Yeah, it's middle to back office depending on what kind of trading desks you support. I'd say that if the goal is to work FO you should try to go there straight away. BB BO boutique FO.
What about doing some time in MO and the go for a masters and apply to FO with the masters already done (23 by then)? Would the masters be a good way to bet into FO?
Depeds on where you are based, but in Europe I think that could be a good idea. Just get your story right on why you want to move from MO - FO, like taking on more responsibility, facing clients, etc.
I always love this question. I've been in roles that colleague insisted we're FO, but I was of a different opinion. I think of it like this, if I told a first-year university student what I do, would they think it's cool? If so, it's FO.
market risk sits w/ s&t = front office
credit risk = middle office except for JPM where its apart of IB
Market risk is not FO
I’d argue that credit risk is closer because you work with bankers and possibly assist on deals but market risk is mostly providing recommendations and reports for the firms positions as a whole entity/ liquidity risks
Market risk is FO as in many banks it's in the S&T group which is FO
yes its fo in s&t group
Aspects of market risk do sit within the FO at certain banks, but the pay doesn't automatically align with FO comp.
To echo, market risk is front office. Pay is on par with other S&T roles. You work directly with both sales and traders on a daily basis. You talk to clients on a daily basis. Can be a very technical role.
What about P&L analyst?
thats also middle office / back office...but its better than unemployed
Honestly I’m not too familiar but from the title I’m assuming you would report and follow the P&L of a trader everyday... so by definition it’s not front office.
Front office is client facing AND revenue generating. Always keep that in mind, any support function would be excluded.
Market risk is not front office. Yes they sit on trading floor but it's not front office...front office bring revenue. Don't know how else to clarify this more...
If you're in reconciling, compliance, front office technology, developer, risk, HR, settlements, trade support, any functions in operations... doesn't matter if you move risk within books for the trader, you're not front office.
One lesson I did learn to be true. If the job has MO in its title, it’s definitely not MO. Think that’s the only one that can be a misconception. Risk is always MO.
Wtf how are people suggesting market risk and credit risk jobs are FO. Look around on LinkedIn, none of these roles have a single Ivy League grad anywhere in sight. It’s just asian kids from Baruch. First sign that a position isn’t FO. Do the research, it’s not hard.
That's a pretty ridiculous way to gauge whether a position is FO. Also, as a matter of fact there are "Ivy League" kids in credit risk roles (ones that come to mind: Cornell, Harvard, Dartmouth, etc.) which is a MO function. At the end of the day, risk in general is not FO as it does not produce revenue, it only assists bankers.
Risk is not front office.
Getting from middle/back to front office is a function of how you spend your free time.
If you go into the middle office job thinking that you have a leg up because you're rubbing elbows with the front office and can dazzle your way to FO by being that special middle officeguy who impresses FO guys, you'll be disappointed. You'll apply for FO and realize that your competition is some other guy who spent his free time learning the directly relevant skills needed for the FO role.
In other words, there's no back door option when plenty of people are waiting at the front door. Its crucial to acknowledge that FO involves a heavy skill set that you don't yet have, and will need to invest time into acquiring.
If you go to middle office and then also spend your free time wisely, you can compete successfully at the front door plus have a small leg up by virtue of the fact that you know some FO guys.
What kind of skills would those be?
In many cases, middle office people have a much greater technical skill set (statistical analysis, VaR, simulation analysis, complex algorithmic modeling). Skill set in FO is much more difficult to attain however, since it's primarily soft skills and selling ability.
You may be right about the technical skill set of risk people. Speaking as one FO person's view, I'm pretty skeptical of how much of that skill set is really the individual. I think a lot of FO people would assume that one person built the algo or risk model and everyone else on the risk team just plugs things into it.
Risk Analyst and P&L Analysts are MO. It's not a dead-end if you want to go to FO (though if you can start in FO that's obviously the best). You need to have a good story when interviewing why you want to go to FO; some roles in S&T require good understanding of risk management so depending on where in FO skills are transferable.
For example I started out interning in BO (Credit Risk Tech) and MO (Credit & Market Risk) before transitioning into S&T, went back to school and moved to buyside.
Would a masters be good?
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