"Junior traders should beware of friendly brokers with ulterior motives"

If you're an analyst who's recently joined the markets division of an investment bank, then I have some advice for you. Take your relationships with brokers with a pinch of salt.

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Brokers are a different breed. When you join an investment bank, they will be extremely friendly. This does not mean that they are your friends. 

When you're a trader, a broker essentially works for you. They are there to help you place transactions anonymously, and they will do their utmost to get you to place those transactions through them. 

For this reason, brokers will often target junior traders before they are even allowed to trade. It's a bit like high school seniors and freshmen girls. For junior traders, it can often be an exciting and overwhelming experience. 

At worse, I've seen broker relationships lead junior traders astray. When I was a junior, it was not unusual for brokers to introduce young traders to drugs; some went down dark paths as a result. Others fell into a habit of going out for dinner and drinks with brokers and coming into work late after being out into the early hours. 

It's also worth remembering that not all brokers are good at their jobs, and that some are too good. A good broker combines two skill sets: knowing what the client wants or and being able to make the client want what they (the broker wants). As the client, the trader needs to make sure the broker isn't driving the trades. 

For this reason, it's good to keep some distance from brokers. Some traders make a point of being macho and abusing their brokers. Others get very chummy with them and treat them as members of family.

Ultimately, though, this is a business relationship. Never forget that. Do not let brokers bearing drinks turn your head. Never accept drugs. Do not abuse them when your trades go wrong. And do not forget that if you lose your job, they will almost certainly disappear from your life. 

Bob Hegadi is a pseudonym 

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