How bad is it really... the back office

There certainly is a lot of material on this topic here, but I wanted to get people's opinions on a back/middle office Internship in an IBD recruiting context. I have been offered a summer internship at a MM in London in their treasury dept. The question I haven't been able to get a definitive answer to yet is: will this help or hurt my chances for securing an internship and hopefully FT role in IB?

LEARNING OPPORTUNITIES:

The way I see it, treasury (as well as risk/controlling and to a degree even Ops) teaches you a hell of a lot about how a bank generates its money (even though you are not directly generating that money). So, is this experience viewed more favourably for IBD than something like a corporate strategy internship at a F500?

OTHER OPTIONS:

If the above is completely wrong, and the Back office really is the doom and gloom it's often made out to be, what would people recommend as an alternative summer internship (still open this late in the recruiting cycle) that can be used as a route to the coveted IBD?

Comments (47)

Feb 1, 2017

The best advice I can offer would be to not use this website as a measuring stick. You're on a forum that essentially lives by IB or bust as a mantra - you're going to get a lot of one sided views.

I'd suggest networking a bit, get on a call with an analyst in a similar BO role and talk to him about his job; decide if it fits YOU or not.

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Best Response
Feb 1, 2017

All depends on the situation. If you have a supportive boss and like the work (which really isn't that bad and probably is more interesting and allows you to learn a heck of a lot more than learning how to sleep 4 hours a night while spending 75% of your time at work just reading the news). A year or two down the line doors will open for you if you're talented, internal mobility is increasingly becoming a focus of these firms because they can get a known commodity, slide them over, and in every single instance I have seen of this, these are the top analysts on the desk as on one hand you have arrogant asshole who landed the position he coveted right out of school, who doesn't actually know anything, versus somebody that knows pretty much everything you need and understands the firms culture and how to thrive in it.

IBD Analyst Programs are overrated. Take that from someone who had 3 offers for it and opted to go with S&T instead. I know damn well if I wanted to move to IB there are 2 groups I could probably join within a few weeks internally at this point, but I don't have any interest in working more, for marginally more money, and honestly learning less. I have done more extensive modeling during my time on the credit desk than any of my peers within IB have done. I have done an IBD internship (wanted S&T full-time so moved from IBD -> S&T, not very common) and it is really overhyped as an experience. The network effect is because you're surrounded by kids born into money who couldn't fail at life if they tried, and other kids who are just good at "fitting in". There are exceptions and every shop is different, but generally understanding how banks make money (something you would know better than anybody not in a FIG group - and even then, possibly more) which is what you would learn in Treasury is likely beneficial over taking an IBD offer you're not interested in just so you can spend 2 years partying and telling girls you're an investment banker (which they interpret as, oh wow, this idiot will pay for all my drinks and every date we go on. Sign me up).

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Feb 2, 2017

Very insightful, cheers. I must say this is a very relevant perspective, which you don't hear particularly often on this forum, thanks for the tip.

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Feb 9, 2017
supervalued:

Very insightful, cheers. I must say this is a very relevant perspective, which you don't hear particularly often on this forum, thanks for the tip.

Happy to answer further questions. I feel people on these boards are too short-sighted. A career is not a 2, 4 or 6 year proposition. You have to be thinking 30-40 years.

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Feb 12, 2017
chestnutxyz:

All depends on the situation. If you have a supportive boss and like the work (which really isn't that bad and probably is more interesting and allows you to learn a heck of a lot more than learning how to sleep 4 hours a night while spending 75% of your time at work just reading the news). A year or two down the line doors will open for you if you're talented, internal mobility is increasingly becoming a focus of these firms because they can get a known commodity, slide them over, and in every single instance I have seen of this, these are the top analysts on the desk as on one hand you have arrogant asshole who landed the position he coveted right out of school, who doesn't actually know anything, versus somebody that knows pretty much everything you need and understands the firms culture and how to thrive in it.

IBD Analyst Programs are overrated. Take that from someone who had 3 offers for it and opted to go with S&T instead. I know damn well if I wanted to move to IB there are 2 groups I could probably join within a few weeks internally at this point, but I don't have any interest in working more, for marginally more money, and honestly learning less. I have done more extensive modeling during my time on the credit desk than any of my peers within IB have done. I have done an IBD internship (wanted S&T full-time so moved from IBD -> S&T, not very common) and it is really overhyped as an experience. The network effect is because you're surrounded by kids born into money who couldn't fail at life if they tried, and other kids who are just good at "fitting in". There are exceptions and every shop is different, but generally understanding how banks make money (something you would know better than anybody not in a FIG group - and even then, possibly more) which is what you would learn in Treasury is likely beneficial over taking an IBD offer you're not interested in just so you can spend 2 years partying and telling girls you're an investment banker (which they interpret as, oh wow, this idiot will pay for all my drinks and every date we go on. Sign me up).

I'm genuinely curious. What do traders learn that someone in a FIG group doesn't that has any relevance outside of trading or closely related areas?

Must be why traders have a much more broad set of exit opportunities than investment bankers.

Array

Feb 9, 2017

If you have to join the back office, I'd say the treasury function is the most interesting part of it and the experience you can leverage off best for FO roles.

Feb 10, 2017

It depends what you want to do with your career / life. If you're fine with good hours, good work-life balance, low pay and a low ceiling, then do back-office. If you want to do front-office stuff, don't take internships in BO. They will not help.

Feb 11, 2017

Low pay?!

They get paid well in London. First year analyst in BO get paid 39k base and MO around 43k and FO get around 50k.

Feb 11, 2017

I believe the above poster was referring to a lack of sizeable bonus in those roles

hmm

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Feb 11, 2017
doppelanger:

Low pay?!

They get paid well in London. First year analyst in BO get paid 39k base and MO around 43k and FO get around 50k.

People that call it low-pay are disconnected with reality.

Yeah, you are not in the 97th percentile of earners, but you're making a solid living.

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Feb 12, 2017

I don't really know shit about shit about the BO. But honestly, it sounds kinda chill. You go to work for like 8-9 hours a day and do simple tasks, maybe read some news, drink a little coffee, go out for a longer lunch. Then you leave by 5/6PM and still make more money than 90% of people in the country. This forum lives by the idea of "IB or bust", which is fine, but for normal people standards BO on Wall Street is a sweet gig.

Feb 12, 2017

how much does BO make a year on average? If I may ask?

Feb 12, 2017

According to Glassdoor, you should be comfortable six figure range within a few years. Never going to clear a 100K bonus though. But I wouldn't know from experience.

Feb 15, 2017

Agree. The nature of this forum is more FO-friendly which is perfectly fine, but there are many BO jobs with a very decent salary (Compared to, say, accounting, insurance, most of other industries). Employers know this, so the recruitment process they use and work quality standards required are not low. You won't see Ivy-leaguers lining up for BO jobs, but I doubt you will see a lot of losers being accepted.
We actually had a hard time recruiting people for our function due to the requirements. Languages, significant prior experience, certifications...Not as easy to find this in the workforce. Not to mention when these BO functions are offshored - Again, while we're not talking about MIT-trained quants or IBD associates, you can imagine the value of these jobs in emerging markets where opportunities in finance are scarce, but the pool of qualified applicants is also small.

Obviously, as non-revenue generating functions, bonuses are low, entry level FO people will make more than you do.
Regarding "quality of life", while I have no direct experience I have friends in Ops/tech who work a lot too, but I guess for most it's not so bad.

Feb 12, 2017

The issue with BO work is the lack of exit opportunities, skillset and not being in a revenue generating role. Job pays fine and you could go into F500 or something along those lines. There are also different jobs within operations which will have more benefit or skills than simply clearing trades.

I did BO for 5 months and wanted to leave within the first month, but that is just me. Pay is fine when you compare it to similar type jobs (F500/accounting), but obviously pales in comparison to IB, PE, HF, etc.

Different strokes for different folks. But yeah, this site is obviously FO focused which is why BO gets no love.

Feb 15, 2017

Would back office be good for someone who had to attend a non-target (say, online-type friendly) degree program as a way to break into IBD?

Feb 15, 2017

If you have no other options and IBD really is your dream then BO is not a bad plan B. But it is really far from ideal.

Feb 15, 2017

I worked on a BO consulting engagement. It was one of the worst experiences of my life.

Feb 15, 2017

I would go with the consensus with how you feel about the role overall and what your goals are for this career industry. Personally I think working 8-9 hours a day and making decent/good money is awesome, but from what TNA said, what exit opportunities are there for BO folks?

Feb 15, 2017

Did BO and MO jobs with UBS, Citi and Merrill - assuming that brand names will help me land FO roles, and assume that there will be exits. Worst idea ever!!! My co-worker at Merrill is VP now - but yes still at his Prime Brokerage MO/BO role, with a CFA, he still can't move to a FO role. I had to get a Master degree, re-brand myself. Did IBD Summer Associate internships > then got myself a FO role ER at an investment bank.

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Feb 15, 2017

Aside from the usual stuff people say about pay, prestige, etc, my thing is back office honestly just sounds so boring. Compare: "we help the bank manage internal liquidity requirements and ensure that we are in compliance with SEC/FINRA regulations" versus "we advise institutions on mergers and acquisitions and capital raising". One clearly sounds more interesting than the other...at least to me.

Feb 15, 2017

And good answer. Means you're into IB for all the right reasons.

Feb 15, 2017

This is legit the only answer. At the end of the day, all jobs suck to a certain degree. But, some of us are just nerdier than others and will be happy if we get to put together advisory materials. Other people might be able to handle 8 hours of work around other stuff, so they can take home their pay and do other things with their time. It's not really about specifics like pay or prestige, because what's prestigious about investment banking when the majority of the population doesn't even know what it is or hates it because to them 'it creates no product' and destroys the whole universe? And, you can't even be successful in the industry unless you really give a shit about it, as if it's your own entrepreneurial effort.

Feb 15, 2017

I did a MO internship at a BB. If you network with the people in IBD while doing your internship, at the end of your program you can opt to apply for mobility. That's what I did.

Feb 15, 2017

Back office is not bad at all. You can make decent money and at times leave at 3 o'clock on a Friday. People act like BO is so horrible yet when have we ever heard someone say "I'm having the time of life in IBD!"? It never happens. Not to mention the fact that most people in HF, PE, etc. don't stay at the same firm very long.

Work in 90% of cases is boring and the fact that BO pay is good and light hours makes it a good enough job for me. Like anything else in life, the people make all the difference and it is a reason why I stay away from hiring certain types of ivy kids.
'

Feb 16, 2017

The most important part is that not all MO/BO jobs are created equal. Would you rather process cash wires all day or look at the P&L, positions, and risk in a book? Neither are FO yet one sounds more interesting than the other.

It's not about whether something is FO, MO, or BO. Are you fulfilled in your role and the career path that it leads to? No? Then do something about it. If you want to be a trader, then take the necessary steps to get there. But if you don't land there, do not lose hope.

There's much more to a career than whether something is revenue generating or not. You have to think holistically. Do you like the company? Are you passionate about what the company does and what your role is? How's your boss? Is there room for growth and promotion? How's the culture? These things are irrespective of the FO because there is no guarantee that you will like anything about your FO job.

The perception about the BO is that the work and pay sucks. That's totally true in some cases, but that's not a blanket statement. I'd hardly say that working 50-60 hour weeks, making $200k all in, living in a 5000 square foot house because the COL is stupid cheap, and really enjoying what you do falls into the blanket statement that the BO sucks.

It's all about what you make of it. Become engaged in your career no matter what it is. If you are in accounting, get your CMA, CPA, MPA, etc. If you're in finance get your CFA, CAIA, etc. Why? Because that's how you become engaged in your career. It's how you own your shit. It's how to become an expert in your field. I know people who work in the BO who are literally geniuses For an accountant, landing an Accounting Policy job at a BB is like a finance guy landing a job in IBD at a BB.

I'm not going to sit here and tell you that reconciling accounts all day is the way to go. It's probably not and if you enjoy that then kudos, but seriously, look at how many different non-FO jobs are out there. And they absolutely pay differently that one another.

From the day you join this website, your head is filled with this FO or bust mentality, but it is just a mentality. There is hope and there is opportunity everywhere. I cannot stress this enough. I am not knocking the mentality, but I am trying to provide a voice of reason for those who desperately want to get to the FO but are in MO/BO roles.

If you hate your MO/BO job, do something else. Use your experience as leverage into something better even if it's not FO.

One of the most important pieces of advice I've ever received is that you have to understand that your career is probably going to be 40 years of working. It is not a race. If it takes you 10 years to land that epic job, then fine. And who's to say in a few years, you still want to go into IBD or PE? There's no guarantee.

When I graduated college, I knew nothing. Absolutely nothing. And it took me at least 5 years to realize that. People who say that they hated their MO/BO job, I get it. Yeah you probably hated "your" job, but that doesn't mean that all the jobs (which are probably like 10 different ones to 1 FO job) are the same.

That is all.

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Feb 17, 2017

It is not doom and gloom. There are people that like it but it can get repetitive really fast. My view is if you are no longer using your head, what is the point?

Feb 17, 2017

Totally agree. And, to be honest there is way more in this than purely your job description - You can have a job which sounds great in paper, generate revenue and get good comp and still want to quit as you'll feel you're not really learning anything new, using your intelligence.

Always stay hungry, and I'm not talking only about bigger bonuses. If you do, you'll be happy whether in FO, MO or BO.

Feb 17, 2017
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