I am totally new to the investment arena. just finished L1. now need to know some of the terms. hearing this everywhere front office and back office. what happens in front office. and what happens in back office.
telljimmy Wrote: ------------------------------------------------------- > what happens in front office: models and bottles > and > what happens in back office: buckets of bottles
oh. no. I can forsee this thread turning ugly. Basically, FO: generates revenue for the firm BO: does not generate revenue for the firm, and just eats it up
FO, client facing, revenue generating. It’s weird going out and havnig people say “they’re in finance” and then looking them up on bloomberg only to A) not find them or B) read the notes on their profile and it becomes clear that they’re a clerk or assistant. Pretty funny.
Ok. Here is a non-snarky answer: FO are the people who execute the business. So, for instance, if it’s a sales and trading business, sales people and traders are the FO. FO people perceive themselves to be very important, as the revenue effects of their performance are very apparent. BO does operational work that is necessary to the FO, but is not directly related to revenue generation. For example, if traders do a trade, someone needs to handle the settlements, documentation, auditing the positions, and lots of other stuff. These jobs typically fall to BO people.
^ whats the snarky answer?
http://hereisthecity.com/2006/08/21/the_front_office_bac/ Here’s an oldie but goodie sent in by one of our readers: 'A man flying in a hot air balloon realised that he was lost. He spots a man down below and descends. ‘Excuse me’, he shouts. ‘Can you help me ? I promised a friend that I’d meet him half hour ago, but I’m lost. Where am I ?’. ‘You are in a hot air balloon’, the man below replied. ‘You are hovering approximately 30 feet above this field. You are between 40 and 42 degrees north latitude, and between 58 and 60 degrees west longitude’. ‘Thanks’. replied the lost balloonist. ‘You must work in Operations’. ‘I do’, said the man below. ‘But how did you know ?’. ‘Well’, answered the balloonist, ‘Everything you told me is technically correct, but I have no idea what to make of it all, and the fact is that I’m still lost!’. ‘And you my friend’, said the man below, ‘must work in Front Office’. ‘I do’, said the balloonist. ‘But how come you knew that ?’. ‘Well’, replied the man with his feet on the ground, ‘you don’t know where you are, or where you are going. You made a promise which you are not going to keep, and you are now looking to me to solve your problems. And the fact is that you are in exactly the same predicament you were in before we meet, yet somehow all the blame is now being laid on me!’.
It works like this: Front office interacts with clients and generates revenue (equity research, portfolio managers, sales, investment bankers, etc). In their minds, they are the reason for the season, they should get all the credit and pay, they do all the work and back office is just the cost generating bureaucracy that gets in their way. Back office handles all the internal operations designed to establish the framework required to actually operate. They clear and document all the trades, manage the IT infrastructure, design the trading platforms and algorithms, manage risk, etc. In their minds, they do all the work that makes the bank possible and the front office guys take all the credit, making messes that back office has to clean up, running firms into the ground, and shouting about their egos to justify next year’s bonus, which all the front office guys appear to care about. In football terms, the back office is much like the offensive line making the holes to run through and the front office is the celebrity running back. Both sides are equally right in their assessment of the other. Welcome to finance.
Front office is the doctor. Back office is the administrative staff at the clinic.
Front office scores the hot chicks and takes them home. Back office counts how many there are.
Palantir Wrote: ------------------------------------------------------- > Front office is the doctor. > > Back office is the administrative staff at the > clinic. I think that a bit of a stretch. The BO is more than an administrative staff and the front office certainly is not equivalent to a medical doctor. Doctors save lives, trader make bets.
LBriscoe Wrote: ------------------------------------------------------- > Well, you go to a doctor’s office to see a doctor. You go to a trading floor to deal with traders. That’s basically what he is saying. Plus, would you really want to live in a world without financial markets? Many social institutions, such as healthcare, would not be possible.
FO: builds castles BO: mows the lawn
I’m kinda disappointed that there was not more piss-taking in the replies. I know we all gotta start somewhere but it seemed like something of a missed opportunity.
FO: golfer BO: caddy
Personally, I find the egotistical over blown self-importance of fo guys annoying. None of the cubicle jockeys in fo i know in manhattan are balling. A bunch of nerds trying to make themselves seem less boring than they really are. I work in mid office, get to observe both sides. Personally I’d rather be surrounded with the Bo guys than douches as seen above. Then again, I hate the people attracted to finance in general.
Black Swan Wrote: ------------------------------------------------------- >Then again, I hate the people attracted to finance in general. A self-hating finance professional…what a cliche. I totally agree about the douchiness of the posters above, who I doubt work in FO. At many firms, because of client interaction, working in a FO position requires a certain level of class.
This is an open public forum, people say things they never would in public. So however “toned-down” people are in person, the internet becomes the outlet of what people really think.
I’m not self hating
@BS, ah so you are excluded from the “in general” umbrella?