It is pretty clear on what Front Office roles are, but it isn't exactly clear what constitutes Middle Office.
For example, Wikipedia lists Risk, Control, Compliance, Treasury and Corp Strategy as Middle Office roles. But isn't Control and Compliance more like Back Office?
So what exactly are Middle Office roles?
Also, how difficult is it to break into MO jobs as compared to FO jobs. Do you need to go to a target school to break in MO type jobs.
Finally, how is compensation compared to FO and BO?
Middle and Back Office Roles
Front office sells the products to clients.
Middle office does the ancillary items in support of the sale (i.e. reconciliation of records, compliance and controls)
Back office supports the underlying development of the product (i.e. budgeting, resource management, developing/maintaining systems)
- Front Office: Investment Banking Analyst, Sales and Trading Analyst, Equity Research Analyst, Private Equity Analyst, Management Consultant, etc.
- Middle Office: Risk Analyst, Compliance Officer, etc.
- Back Office: IT&S, Accounting Analyst, etc.
Middle Office Definition and Functions
While the definition of middle office is a lot more ambiguous than the definition for back office, our users helped define the roles of middle office. Generally speaking, middle office roles directly support the revenue generation process.
Legitimate middle office roles are pretty respected by the FO and includes roles like risk management (market and credit), corporate strategy, corporate treasury, quant analytics, certain types of research, etc. These are critical roles that may not generate revenue directly (front office) but nonetheless directly support the revenue generation process and are essential to the bank. I interviewed for two of these (risk and treasury) and liked both.
Middle Office Compensation
Real MO analyst positions like risk or treasury will usually have the same 70k base as FO (whereas BO is usually a bit less). First year bonus could be anywhere from like 10k to 40k (I'd guess 15k-25k) depending on the BB and MO position. Obviously if you make it to a senior position you will make a lot of money, not FO IBD/ST money but enough to be considered "rich" (maybe 400-700kish all in, could be more).
User @dublin, a corporate development manager, shared a different experience:
Disagree slightly on comp - when I started in MO (I was in finance, but my program also had people in treasury, risk, etc), base was 60 with bonus about 8-10 (annualized), while in that same year, IB analysts were at 70 base with typical 40-60 bonuses
Back Office Definition and Functions
The back office is the section of a firm responsible for functions related to the running of the company such as:
- IT & Other Technology
The back office is an essential part of any firm and the job title is often classed under 'Operations'. At investment banks, the back office will also be in charge of completing the administrative tasks associated with trades such as settlements, regulatory compliance and position clearing.
You can read more about Back Office roles in the WSO Finance Dictionary.
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