What is the front office and what does it do?

Although somewhat dated, the terms, 'front office', 'middle office' and 'back office' are often used to describe career opportunities available in investment banks and other financial institutions.

Front office professionals are investment decision makers or advisors who have a client-facing role. Typical front office roles include trading on behalf of the bank (equities, debt securities, derivatives etc.) as well as supporting clients in mergers & acquisitions and leveraged buyouts.

Responsibilities vary depending on the area of focus but may include deal execution, creating pitch books, financial modelling, pre-trade work or client advisory. As the revenue-generating part of the business, these functions are key contributors to the performance and profitability of a financial institution.

Why are they important?

Front office roles are typically defined as positions which have direct interaction with the client and customer. These are key positions, with front office professionals responsible for deal execution, client relationships and, ultimately, revenue generation in a financial institution.

Skills needed for this role

Front office professionals are acutely results-oriented and thrive in a high-pressure, competitive environment. The ability to multitask and meet tight deadlines is essential. Excellent interpersonal and communication skills, both verbal and written, as well as strong presentation skills are imperative for this client-facing role.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Career opportunities presented by this role

There are a wide variety of roles available in the front office in areas such as M&A, sales, trading, private equity, investment, and research. Investment banks have a highly structured career path which allows successful individuals to progress from analyst through to managing director, and roles can be very well remunerated.

Competencies

High level competencies required include:

  • Advisory and consultancy

    A. Gathers and understands financial and non-financial information to develop complete knowledge of the client business and the environment in which it operates.

    B. Provides expert advice that will add value to the business and gain advantage.

    C. Identify and advise on business partnering to develop strategic relationships to create opportunities, improve performance and solve business problems.

    D. Prepare and present business plans and advise on the actions to implement these plans.

  • Data, digital and technology

    A. Identifies strategic options to add value, using data and technology.

    B. Analyses and evaluates data using appropriate technologies and tools.

    C. Applies technologies to visualise data clearly and effectively.

    D. Applies scepticism and ethical judgement to the use of data and data technology.

     

  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.

     

     

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.