Front office finance (for skill-building & earning to give)

By · Published August 2014 ·

Summary

Our views on this career are under review, and the following profile no longer accurately reflects our views.

Front facing finance still offers some of the highest pay available, making it a potential option for earning to give, however, we don’t recommend it unless you could develop very strong motivation to succeed. The work load can be brutal, and is often boring. It’s highly competitive and has high drop out rates. Moreover, the skills and knowledge you develop seem less useful than alternatives such as consulting and tech entrepreneurship.

Within this role, jobs in asset management seem the best in terms of job satisfaction and pay, but are also the most competitive.

Pros

  • • One of the most high-paying options.
  • • Generally high-status option that opens many paths, especially those involving finance and in the corporate world.

Cons

  • • Hours are very long and you may be required to work at any time.
  • • The work is often boring in the first couple of years.
  • • The competition is fierce and progression is 'up or out', creating high drop out rates.
  • • Much of the skills and knowledge you develop aren't very useful elsewhere.

Key facts on fit  

Can deal with extreme, unpredictable hours; high attention to detail; can fit in with the team; important to be competitive, have a strong desire for money or a deep interest in the financial markets.

Next steps

If interested and recently graduated, find out more about the path. Internships are a well-paid and quick way to test out the career, and these days most full-time jobs are filled with interns.

If you’ve already gained several years of experience and/or an MBA, then you can enter directly as an associate.

Not usually recommended

We don't recommend this career unless you are an exceptionally good fit for it.

Review status

Exploratory career profile 

Our views on this career are under review, and the following profile no longer accurately reflects our views. We’re more concerned by the potential harm to society of some parts of finance, so recommend caution when seeking a career in this area.

What is this career path?

Finance means working in the financial industry, which allocates capital across the economy. In particular, we mean jobs in ‘front office’ finance, like investment banking, asset management and private equity. (Note that we have a separate profile on quantitative trading). Careers in this path generally start by joining a graduate scheme after university as an ‘analyst’ (especially in investment banking), and then working up the roles in the face of high attrition. You have a second chance to enter investment banking as an ‘associate’ after working for several years and doing an MBA. The most common entry route is through investment banking, which leads into other roles in asset management and private equity, but you can also enter these roles directly.

Why is it a good opportunity?

We think finance jobs primarily have the potential to make a difference through earning to give. On this front, they are among the best, because finance is a good candidate for the highest-earning career. Advocacy potential is moderate, because you’ll be able to meet lots of rich people as colleagues. On the other hand, we don’t rate direct contribution highly, because there are significant doubts about whether finance makes a positive economic contribution at the margin. That said, there may be potential to promote improvements to finance from within the industry (like those reviewed by the Copenhagen Consensus), and to do other socially useful activities like developing social impact bonds.

Finance is also good for career capital, because several years in finance is a strong signal of ability and work ethic. You receive intense corporate training, and you develop a network of wealthy and influential people. Knowing about finance and accounting is also useful in many corporate sector jobs.

Within finance, we think asset management (including hedge funds, mutual funds, private equity and VC) is the best path, since it seems to offer higher average pay, more interesting work and better hours, though it’s also more competitive. If you have strong mathematical skills, we recommend quantitative trading instead, which is in another profile.

Personal fit

Entry requirements

Entering front facing finance generally requires a degree from a top university and a rounded profile of abilities. It’s especially useful to have a degree in a STEM subject. The ‘deal making’ tracks in investment banking and private equity require more social and sales skills, whereas the asset management and research tracks require more analytical skills. There are also roles which require strong quantitative skills.

What does it take to succeed?

  • You need to be very hard working, able to cope with lots of unpredictable work, and get by without much sleep.
  • In the early stages, the work seems relatively uninteresting (lots of preparing of Powerpoint documents and financial models) but you gain autonomy and more challenging work later.
  • You need to be able to fit in with the rest of the team, since being a team player is highly valued.
  • You’ll need high attention to detail, since you’ll have to prepare perfect presentations and models.
  • In some areas, the culture can be masculine, ‘jock’, and zero-sum, which could make it tough for those earning to give.
  • To develop the motivation to succeed, it helps to have some combination of (i) a competitive nature (ii) a strong desire for money and the lifestyle (iii) intrinsic interest in the financial markets.

We recommend reading Young Money so that you understand the downsides before making the plunge.

Further reading