How often do people move from back office to front office?
I'm going to start work as a business analyst working in Technology at a large Asset Management firm in London. I really like the exposure to new technologies (big data, cloud, AI) etc, however in the long term (5-10 years) I hope to move over to the front office (e.g. Investment - Equity).
The two main reasons being the client interactions and the better comp. I wanted to know how plausible this is/how often it happens? I would characterise myself as ambitious, confident, but not necessarily smarter than other analysts with my job. Would an MBA help in making this transition happen?
I interned in what most people on this website consider BO (ops), started in MO (risk/compliance), and now work in an investing/allocator role. In reality, where you start, especially coming out of college, doesn't matter after you've had a couple months in the real world.
So, work in your current role for a few months, figure out what you want to do, and put yourself in a position to get the job. Do a lot of reading (CFA Institute, white papers), networking, and make sure you're good with Excel and potentially a coding language or two. I'm not saying you'll walk into a BB IBD role, but finance is a big industry and its definitely possible to move to a more lucrative/interesting role pretty quickly.
A friend did BO and moved to FO after networking and CFA. Though I think it really depends on the firm...for example BO at some firms, you will never see light of day. I think MBA would help or at least passing CFA level 1.
back office / technology doesn't teach you how to make investment decisions, or how to analyse a company, financial security or the macro environment. These are very specialized skills, that takes years on their own to learn. So, the ability to transfer to the front office often comes down to networking. Thru those back office jobs, you will get exposure to front office people. If you are a star at your job to those people...then after a couple years you can express interest in front office.
Things like the CFA don't teach investing (tho, they do teach you the dictionary definition of lot of terms)...CFA is useful background information...but generally not necessary...you don't see many traders, bankers or hedge fund managers with CFA credentials...because its generally just not necessary. CFA is something that is a credential...and has value when credentials make a difference (such as a financial adviser). I'll agree that it is hard and takes time and effort to pass the tests..and you will learn a lot thru that process. But i've never heard a CFA holder tell me that the CFA helped them make a trade decision. Extra knowledge isn't a bad thing...its just hard to determine the value of getting it.
So, how do you learn actual front office skills? Sadly, the only way is thru experience. So you have to network into a position...and then that is when the real learning begins.
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