Message from the middle office: front office bankers need not apply

In the past, only a hallowed few made the transition from the back or middle office into a front office investment banking position. Product controllers aspired to make it into a revenue-generating position, Big Four ACAs moved into equity research, while risk managers eyed traders enviously.

Now, though, the middle office is the place to be. While the trading floors are cut back, research teams hit hard and advisory functions trimmed, many who made the transition into the front office want to get back to their roots. Meanwhile, traders are deciding that risk management is a decidedly safer option in the current climate.

As one equity researcher posted here recently: “I’m a qualified ACA with about six years’ of Big 4 audit experience. Made a move to investor relations of a corporate (2 years) and then to front office equity research at age 30. I was made redundant in under 2 years due to market conditions and being a top European Bank. Now finding difficult to move back to audit/finance. Companies are nuts to not hire people from front office and more commercial experience now. I try and convince them that this is for long term and will not leave but doesn’t work.”

His plight is not uncommon. Moving into a middle office role is a cushy option currently – auditors are still highly sought-after, risk management is still an active job market, while compliance and regulatory roles (admittedly a more difficult transition) are hot. Unfortunately, recruiters tell us that they’re simply not interested in hearing from front office bankers.

“People in the front office are trying to reposition themselves for middle office roles, mainly due a complete lack of recruitment activity in their chosen area, but employers are generally resistant,” says Priya Mariannie, senior consultant, risk practice at Elgin White. “There are two reasons for this; firstly, banks don’t believe the move is for the long term, and secondly, there’s a lot of talent on the market with the requisite experience.”

The exception to this rule is internal transfer. As we mentioned previously, investment banks are under increasing pressure to consider internal applicants and offer alternative employment options rather than simply redundancy.

“If the case is convincing enough and the candidate has a background, or at least some experience, in the area they’re hoping to transition into, then investment banks are willing to consider them,” adds another recruiter focusing on finance and accounting positions.

There’s always private equity

One route still open to front office investment bankers, at least those working in M&A, is private equity. It remains a challenging transition – or as Debbie Eidelman, a consultant at Private Equity Recruitment, says an “aspirational” move – but one that more people are targeting, earlier.

“Even after one or two years’ experience, investment banking analysts are applying for roles in private equity,” she says. “They’re facing more job insecurity and reduced bonuses, but also less deal exposure, so the learning curve isn’t as steep and many are looking elsewhere. This means that private equity firms have a good pool of talent to recruit from.”