Trade Support = Best Finance Career
Ok so this may be a controversial take but I think trade support is the best finance career. My friend is 3 years out of college and clears just over $200k TC at a HF. He also only works market hours (8-5).
Meanwhile, all my friends who entered banking and consulting have all flamed out and make less with longer hours. What's the catch? I cannot think of any.
Trade support roles, especially at hedge funds, can indeed offer a compelling combination of compensation and work-life balance, but there are some nuances to consider. Based on the most helpful WSO content, here’s the breakdown:
Why Trade Support Can Be Attractive:
Compensation: Earning $200k total compensation (TC) three years out of college is impressive, especially when paired with reasonable hours. Hedge funds often pay well for operational roles because they are critical to ensuring smooth trade execution and compliance.
Work-Life Balance: Working market hours (8-5) is a significant advantage compared to the grueling hours in investment banking or consulting. This allows for a more sustainable lifestyle.
Stability: Trade support roles are less exposed to the high-pressure, PnL-driven environment of front-office trading. This can mean more job security and less stress.
Transferable Skills: These roles often involve exposure to trading systems, risk management, and operational processes, which can be valuable in other finance or tech-related roles.
The Catch:
Limited Upward Mobility: Trade support roles typically have a ceiling in terms of career progression. Moving into front-office roles like trading or portfolio management is rare, as these roles are often seen as operational rather than revenue-generating.
Niche Skill Set: While the skills are valuable, they are often specific to the systems and processes of a particular firm. This can make transitioning to other industries or roles more challenging.
Perception: In the finance world, trade support is sometimes viewed as a "back-office" or middle-office role, which may not carry the same prestige as front-office positions. This can matter for those who value the status associated with their job.
Market Dependency: While the hours are better, trade support roles are still tied to market hours, which can mean early mornings or occasional late nights depending on the asset class or region.
Final Thoughts:
Trade support can be an excellent career for those who prioritize work-life balance and solid compensation over prestige or rapid career advancement. However, if you’re someone who thrives on high-stakes decision-making or wants to climb the ladder to front-office roles, it might not be the best fit.
Your friend's experience highlights the potential of these roles, but it’s essential to weigh the trade-offs based on your long-term goals. If you’re considering this path, make sure to research the specific firm and role, as the experience can vary widely depending on the organization.
Sources: The Efficient Career Hypothesis: Almost All Jobs Are Priced In, The Efficient Career Hypothesis: Almost All Jobs Are Priced In, https://www.wallstreetoasis.com/forum/hedge-fund/quant-hedge-fund-career-progression?customgpt=1, https://www.wallstreetoasis.com/forum/trading/qa-1st-year-bb-london-rates-trader-taking-your-questions?customgpt=1
Trade support is decent, but if you want best risk to rewards ratio, market risk is much better. You basically never get fired, you make pretty damn solid money, and you work good hours. It's a 9-5 with the best middle office pay.
QR is also a pretty good gig. Most of the QRs I know work 40 hours, some more advanced down to 30-35 if they're really really good at what they do. The problem is just that they need to constantly compete for signal, so you trade off some of that security and ease of breaking in for higher pay and more interesting work.
Really, I don't think any job is "perfect", so to say. It's a fallacy to think that you can find a perfect job, because it doesn't exist. Everything is priced in. Higher pay and potential earnings/ability to climb the ladder almost always comes with a downside, like hours, difficulty of breaking in, highly technical work that most people aren't smart enough to do, etc.
Best bet is to find the best job for you. Establish early what you prioritize most in a job, and be honest with yourself. From there, you can just figure out where that places you.
Totally agree, wise words - but just thought it was interesting given how obsessed people are with banking and consulting. Trade support jobs are available to people with any college degree and require minimum technical skill, so I think that is what makes it stand out. From what I understand quants have to be top 1% at math and even people in risk are highly proficient at math.
Trade support still requires a bit of leg work to get in. It's not as open as you'd think at a top firm. Also, it falls into the category of "great jobs no one has ever fucking heard of", like many others roles in the support and middle offices of banks. Most students are either hyper aware of finance and therefore only aim for the top roles, or are majoring in finance/business just cause, and want to be a "Financial analyst" or some other generic term. For that reason, trade support isn't a role most people know about. It just gets passed up on unfortunately. But it is a good job.
Good at math, sure, but not top 1%. Most quant work is research based. You can be an incredibly good mathematician, but a terrible researcher. I've seen this plenty. Really smart people who still P-Hack or misinterpret data. There's still massive issues with overfitting in quant funds despite the intelligence of hires. I would say if you can get a 3.7+ at a T30ish school in the US, you can probably do reasonably well in quant. To emphasize my point, I majored in applied math in college, and managed to get some quant offers, and later after my SnT stint(and a brief tech stint) I went to a prop firm as a trader/researcher. As for risk, it's more like 3.2 at a T100 school. Risk doesn't require too much complex math. It's interesting work, sure, but a lot of the problems in risk are solved problems.
Quant is much harder to secure for an average student, but risk is really something I would say anyone with a reasonably sized head can get into. To give a bit of anecdotal data, I looked at my linkedin at risk people(and knowing many risk people I've worked with through 3 firms) and I would say only 25-30% are really math people. 60% are going to be econ people, maybe econ/math, and around 10% will be other in some category.
I would still say if you're interested in anything related to markets, get a STEM degree, and that includes trade support and risk. You'll just have way more success with a STEM background in markets especially.
Trade support seems like a ton of work though to be fair. At least at my firm, I've worked with the Operations team who does trade support and they're ALWAYS working (often before 8 and certainly after 5 or 6 on any given day). It's really an accounting and portfolio recon job more than anything. Just seems not very balanced and it doesn't seem to pay super well unless you're like 10 years in and some type of lead controller.
Agree with your insight about QR and risk. I do some quant risk stuff and work with the risk guys and what you said about the math skills is pretty accurate.
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