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Featured Finance Industry Dictates Changes to Job Market

Discussion in 'Career Advice' started by Ken Abbott, 11/4/13.

  1. Ken Abbott

    Ken Abbott Managing Director

    This article appears in QuantNet 2013-2014 International Guide to Programs in Financial Engineering.
    The job market for quants has changed inexorably. The “particle finance” trend of the last 20 years is on the wane. While funds will still be able to trade on a prop basis, banks’ ability to do so has been severely restricted.
    Some may see this as a pendulum, but most agree that the aggressive trading styles seen in regulated financial institutions will never be seen again.

    Does that mean that there are no more jobs for quants? Certainly not. It does mean, however, that the nature of the job market will be different. The growing number of quant finance programs also suggests that there will be much more competition for these jobs.

    The following suggestions may be helpful in the job hunt.
    1. Stop focusing upon HFT positions—there aren’t that many jobs out there, and many of the people who get those jobs find that it’s VERY hard to make money.
    2. Consider positions in model review, audit, and price verification. Those areas are growing rapidly.
    3. Check the job ads at the regulatory agencies (FRB, SEC, OCC, CFTC, and FINRA). Many people get their start at these organizations.
    4. Think about jobs outside of banking. Corporate treasuries need quants, too, as do data/ media companies.
    5. Know the industry. Be able to identify the top firms in each sector in which you interview (hedge funds, banks, insurance companies, etc.) Read the industry press. Know the regulatory landscape.
    6. Know the company. Read their annual report. Know their position in the industry and their strengths and weaknesses. Read all recent news articles about them.
    7. Don't spout off about all the big-name academics you know. Everyone else knows them, too.
    8. Have a good reason for wanting to be in finance. Wanting to make lots of money isn't one of them. Be convincing or you'll be tagged as a gold digger.
    9. Dress the part. Show up for your interview in business attire. Wall Street isn't Silicon Valley.
    10. Speak clearly. One of the biggest challenges facing many quants is being articulate. Most senior executives, while intelligent, aren't quants. Be able to express complex concepts in simple terms.
    11. Don't pad your résumé. If you make a major omission or misstate something, there's a good chance you'll be discovered and dismissed. Be prepared to discuss any topic you mention in your vitae. The quickest way to get dinged is to come off as a faker.
    12. Have an opinion. Show that you've thought about the issues facing the industry. Keep on top of current events.
    13. Don't get thrown off by a tough question. Pressure is part of the business. Do the best you can. If you simply don't know the answer, say so. Don't try to fake it. One flubbed response doesn't ruin an interview.
    14. Don't talk salary. The market is reasonably efficient. If you try to negotiate too hard, you will run into difficulty.
    15. Stop worrying about GPA. It probably won't matter that much unless it's really low.
    16. Don't brag too much about your programming expertise unless you're interviewing for a programming job, whiles there's an overlap, most quants aren't programmers and most programmers aren't quants.
    About the author
    Kenneth Abbott
    is a Managing Director at Morgan Stanley, where he is the Chief Operating Officer for Firm Risk Management. In addition, he also supervises the risk management of the Investment Management businesses. He is also responsible for legal entity risk management for Morgan Stanley’s US swap dealers and and sits on the investment and valuation committees for the Morgan Stanley Private Equity and Infrastructure funds. Previously, he ran market risk management for Bank of America’s Investment Bank. He has over 30 years banking experience, including 14 years at Bankers Trust as an analyst, trader, and risk manager. Ken has a B.A. from Harvard in Economics, an M.A. from NYU in Economics and an M.S. from NYU/Stern in Statistics and Operations Research. He is an adjunct faculty member at NYU, Baruch, and Claremont and sits on the Board of Trustees for the Global Association of Risk Professionals (GARP) and the NJ Scholars Program.
  2. Andy Nguyen

    Andy Nguyen Member

    Thanks a lot @Ken Abbott for sharing your advice with our community of budding finance professionals. I'm sure it will help many people get on the right path in finding their first job in the industry.
  3. Ole Bueker

    Ole Bueker Member

    Good points, agree especially on points 2 & 3 - in the coming years there should be quite a lot of demand in these areas.
  4. Lana

    Lana New Member

    Yes, it is very true, I see that while checking for the quant positions. Thanks a lot for putting all this together!
  5. Kelvin Chui

    Kelvin Chui New Member

    This seems to contradict the mainstream opinion here. Can you explain a bit more on that?
  6. Ken Abbott

    Ken Abbott Managing Director

    You can't assume that quants all sit on the desk developing models. Most quants I know are in supporting functions. They occasionally write snippets of code, but I wouldn't consider them programmers.

    In fact, at my firm, I'd guess that if you were to ask even the desk quants if they were programmers, they'd say no.
    #6 Ken Abbott, 11/13/13
    Last edited: 11/13/13
  7. vaqueas

    vaqueas New Member

    Spot on Ken...well articulated...it would be great if you can share some tips for how students can make their profile attractive enough, so that employer can call them for interview...(considering you are not from ivy league)...and to make their profile attractive, i assume students have to do great projects...what are the parameters that make good projects for employers?..any tips will highly appreciated...i am talking about projects in reference to financial engineering.
    #7 vaqueas, 11/19/13
    Last edited: 11/19/13
  8. Ken Abbott

    Ken Abbott Managing Director

    First, clean up your résumé. I saw a guy get dinged recently because of bad grammar.
    Second, if you want to generate interest in your project, choose something topical. No one on the banking side is thinking much about new interest rate, cdo, or HFT models. Think CCAR, IMM, AMA.
    Third, look beyond trading strategies. Op risk is really hot. (Is there a single MS program that can teach AMA?) What about clearance?
    Fourth, network. Many people land interviews simply because they pursue them actively.
    dracoid likes this.
  9. vaqueas

    vaqueas New Member

    thanks for the reply ken...
  10. wenbo

    wenbo Member
      C++ Certified

    Hi Ken, have you heard about Rutgers's FSRM and Rensselaer Polytechnic Institute(RPI)'s FERA? Thanks @Ken Abbott
  11. Ken Abbott

    Ken Abbott Managing Director

    I have guest-lectured at Rutgers. I was unaware of the program at RPI.
  12. wenbo

    wenbo Member
      C++ Certified

    Hi Ken, thanks for getting back to me. Do you have any comment on FSRM? How do you think the program's vision on "Bottom Up" methodology to use data? I need to choose between FSRM at Rutgers and RPI. Thank you very much!
  13. phyllis

    phyllis New Member

    Thanks for your sharing, I have a question about risk management, somebody said "It's a useless position in finance company, just aimed at catering for government policy.". Do you think risk management position is a promising job?
  14. Ken Abbott

    Ken Abbott Managing Director

    Whomever told you that is an idiot. A big part concerns reg requirements, but there is a huge amount of transactional work as well. Plus the reg work is usually pretty interesting.

    Desk quants have become a commodity. Having a focus is key.
    bigbadwolf likes this.
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