Do You Have the Right Personality for a Career in Finance?

By Derek On September 6, 2011 Under Uncategorized

“What if there were no hypothetical questions?” – George Carlin

People outside of finance frequently ask me what it takes to work in this business. There is a lot of bad information out there, usually promulgated by jealous, misinformed, underpaid hacks (aka journalists). I can only speak from my experience – and that is the aim of this blog – on what type of people do well in the various roles in finance.

Are You “Front Office” Material?

This business is very competitive and very international. The most interesting jobs are to be found in the “front office.” The “front office” are those people who speak to clients; namely, sales, sales traders and analysts.

Human Resources, Compliance, Settlement and other departments that make up a brokerage firm are important but we refer to them as “back office” and require different traits and skill sets. None of this I have first hand experience with, so no more commentary needed from me.

What makes finance different than other industries is it is purely a service industry – we don’t make anything. In fact, this is what makes it so difficult to explain to non-finance people exactly what you do for a living.


After explaining carefully to my non-financial parents the role of a institutional equity sales person and what I do all day, they asked,

“So, you just speak on the telephone and they pay you for that?”

Uh, yeah, that’s pretty much it.

The other difference with finance is you are drenched in big numbers all day long – a million dollars, a billion and a trillion are what we toss around morning to night. And don’t forget the hours. Markets are always open somewhere around the world and you need to be in early and often leave late.

If you find working a 9 to 5 job taxing, this isn’t the business for you. You also need to like people because you deal with people all day long. I find this gets wearing but then remind myself my poor colleagues are probably pretty tired of me as well! Let’s examine the three main front office roles.

Sales – No Wimps, Please

The equity sales role, otherwise known as the institutional broker, requires an energetic and keen mind. Equity sales are like crabs on the ocean floor. They need to be good at filtering: you filter out the detritus that isn’t important and try to boil down the story to its simplest essence. Your clients all suffer from information overwhelm and you need to help them simplify. You must be able to tell a good story as well as be a good listener. Always ask yourself, is the client interested in what you are talking about? I wrote another post on this subject here.

Hand holding is also a big part of the job when markets tank. You need to be that sympathetic voice at the end of the line now and then for all clients. They will, eventually, all come to you for solace in one way or another because this business eats egos.

Sales people have to have a deep knowledge of all the sectors and stocks. Your knowledge base is deeper than a sales trader but wider than an analyst. You are a hybrid.

Sales people need to work well with the analysts and traders. You must be able to get the most out of your team without pissing them off. You won’t make it without them but you are the gatekeeper. It is your decision which analyst speaks to which client and when. You decide what product your company has that your particular client will be interested in. Your relationship with that client is your franchise value to the firm.

Most sales people tend to be well-spoken, have good memories, an eye for detail and learn quickly. They are usually persistent, almost to the point of being a pest, disciplined and have the stamina to pull long hours and then carry on at night with client entertainment. There are no wimps on the sales desk. This doesn’t mean it is a men only job, far from it. Some of the most effective sales people are women and I should probably write a separate post on this subject.

Sales Traders – Hail of Gunfire

Sales traders don’t have to know the individual stocks anywhere near as well as sales or analysts do. They need to know all the names of the companies and their tickers. It is helpful if they know a little about what the company does but this is not expected. They do need to know the market, how particular stocks trade, who is buying and who is selling and where the flows are. Traders need to be able to make quick decisions and do so under great pressure in a noisy environment.

When markets are roaring up or melting down and the phones are ringing off the hook, it all comes down to the sales trader to get those orders and execute them properly while watching the 50 other orders he is simultaneously working on. If you can stay calm tying your shoe in a hail of gunfire – this is the job for you. Personally, I couldn’t handle the stress.

Sales traders work the least hours. (No matter what they may claim otherwise!). They also start the earliest but they go home when markets close. Like sales people, sales traders also do a lot of client entertainment and have to like people and be “likeable.”

Analysts – R-E-S-P-E-C-T

As the name suggests, these people analyze stocks and write reports. They work the longest hours and only have deep meaningful relationships with their spreadsheets. They work most weekends as well. In my opinion, dollar for hour, this is the worst job in finance (unless you are a junior guy starting out in corporate finance, then you are a slave and not considered human).

Analysts cover industry sectors and are expected to have very deep, specific industry knowledge. If you cover banks you have to know pretty much all there is to know about banks. Nobody will care if you don’t know the name of the largest retailer or tech company in the market. You will write long detailed reports on a specific stock and slap a recommendation on it: Buy, Sell, or Hold.

You will be held accountable by clients and your sales force for your calls (recommendations) – whether they read your report or not. You will travel and meet the clients face to face to present to them your sector overview and the stocks you like best, least and why.

Almost always you will be accompanied by a sales person to make sure you stay on track. You won’t know you are slipping off onto a tangent but the sales person will and he or she will be able to gently get you back on track. You will also have no sense of time whatsoever and get lost easily. That is ok too, because the sales person will always make sure you get to the right meeting at the right time.

As a senior analyst you will often be quoted in the national press, magazines and on Bloomberg. You will give television interviews and will be the face representing your firm. You are treated like a big brain and outside of your sector aren’t expected to have much of a connection with the world around you. But you move stocks and are respected.

Make Your Decision

After reading the above you may get a sense of which of the three roles best suits you. Analysts and sales traders are polar opposites. Sales are somewhere in the middle. It is perfectly acceptable to approach an IB or brokerage firm and express an interest in “sales or sales trading.”

It is equally acceptable to say you want to work in research as an analyst. Don’t go in there saying, “I want a front office job, whatever you got available.” That doesn’t work! If you get to the interview stage with an experienced front office person, they will probably sense to which role you are most suited. That is part of the process. For more on that see my interview post. Good luck.

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4 Comments Add yours

  1. Sophia Riddlebarger
    December 31, 2011
    7:27 am #comment-1

    I like this post, enjoyed this one thanks for putting up.

  2. Woh I love your posts , bookmarked ! .

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