What Makes Investment Management A Front Office Career?

The front office of an investment bank is the department dedicated to helping the organisation make money. This office includes corporate finance, sales, and advisory roles. They service clients directly, offering financial products for clients to purchase or trade to generate revenue for the bank. The front office is the most client-facing division of an investment bank and is responsible for generating the majority of its revenue.

Investment banking

The front office is usually responsible for generating the majority of revenue for the firm. It includes three primary divisions: investment banking, sales and trading, and equity research. In investment banking, professionals advise clients on mergers and acquisitions and capital-raising strategies. Sales and trading involve the buying and selling of products, from commodities to specialised derivatives, on behalf of the bank and its clients. Equity research involves analysts closely following companies to write reports on their future earnings prospects, which are then sold to other financial professionals for investment analysis.

The front office in investment banking is distinct from the middle and back office. The middle office manages risk and ensures compliance with regulations, while the back office handles the day-to-day operations, administrative tasks, and technical support for the firm. While the front office has the most direct contact with clients, it relies on the support of the middle and back office to function effectively.

Sales and trading

Sales is the client-facing side of the sales and trading operation. Salespeople "cover" clients, providing market information and setting them up to trade with the firm. They relay and quote prices from traders, pitch ideas and trades, and build relationships with clients. They also manage access to the rest of the firm, such as meetings with research and traders. Successful salespeople need strong interpersonal skills, as well as numerical ability and attention to detail. They must be able to articulate trade ideas in a clear and convincing way. Salespeople are usually divided by asset classes and client types.

Trading involves watching the markets and providing price quotes. Traders have a niche part of the market that they focus on. There are more simple products, like corporate bonds, and more complex products, like contingent options. Simple products trade more frequently but have smaller margins, while complex products trade less frequently but have larger margins.

Equity research

The front office of an investment bank is the department dedicated to generating revenue for the bank. The front office is client-facing, and its employees are experts who generate revenue by providing direct client services.

Wealth management

The front office has the most direct contact with clients and is usually responsible for generating the majority of revenues for the firm. It relies on the support of the middle office and back office, which provide risk management, compliance, and analytical, technical, and administrative support services.

The front office of a financial services company may include the corporate finance team, while in other industries, it might refer to a receptionist or salesperson. The term "front office" can also have a more specific meaning in certain industries, such as investment banking and hotels, where it refers to the reception area where customers first arrive.

Corporate finance

There are many different career paths in corporate finance because there are so many different kinds of jobs. Entry-level corporate finance jobs include financial, cost, and business analyst positions. Mid-level corporate finance jobs include cash or mergers and acquisitions manager and senior financial analyst positions. Senior-level corporate finance jobs include chief financial officer (CFO) and chief executive officer (CEO). Entry-level positions are available for those without a business-related graduate degree, while a graduate degree is preferred for mid- to senior-level positions.

Frequently asked questions