Where?

Mainly the City.

Employers?

Big investment banks, major banks, smaller stockbrokers, specialist money, commodities and futures traders.

Where does the role fit in?

People associate investment and wholesale banking with dealing. Many have an image of dealers waving their arms about on a crowded trading floor or shouting down a telephone as they buy and sell shares, bonds, money and foreign exchange, commodities and so on — not forgetting so-called futures, of course. Dealing is all about time and risk. The stereotypical dealer is an East End barrow boy, loud and abrasive.

In some markets this image remains reasonably accurate. However, there are relatively few traditional trading floors left in the City and other European centres. In the main, dealing today is a high-tech, highly mathematical job.

Dealing and broking make up the part of the bank's operations that the industry calls the 'front office':

• Broking — this is the side of the business that 'executes' client orders. The word stockbroker personifies this activity. Brokers buy and sell shares on behalf of clients.
• Proprietary dealers — these are the bank’s own dealers. They take the bank’s own money and use it to take 'positions' in the market. These are the people who take risks and can make fortunes. They can lose them as well!

For brokers, the main customers are big asset funds (usually those managing and trying to grow our pensions). Brokers are also increasingly dealing with big hedge funds that use very advanced trading strategies. These firms usually do not talk to sales staff during the working day, as they have their own direct access to the bank’s trading computers.

What you do

We'll look at a broker's dealing room - in its simplest form.

• Trading assistants - do a lot more than simply assist. They usually provide the link between the brokers, the sales staff and the so-called back office, where the post-trade paperwork and payments are processed. (See: City operations and trade support)
  This is often an entry point into the industry. Proprietary dealers have their own trading assistants as well, offering further opportunities to new entrants.
• Sales staff - take orders from clients and give them simple advice. They also help customers to set up trading accounts and make sure they are happy with the service. If the deal the customer wants to do is straightforward, the sales person will pass it direct to the broker to make the trade. If the customer needs more strategic advice first, then they may be referred to one of the bank or stockbroker’s market analysts. (See: Financial analyst)
  This is a good route into the industry. In the big banks and the institutional brokers, the role has been largely superseded by electronic trading links with customers, but it still exists among retail brokers and other high-volume players.
• Brokers - are the people who actually carry out deals on behalf of customers. Increasingly, the majority of big investors input basic trades into the bank's systems themselves. As a result, the broker is becoming more of a specialist adviser, providing information on how markets are performing and suggesting which shares to buy and sell. They also perform larger and more complex trades on behalf of their big customers, to ensure they get the right price.
  Mathematical skills are important, and this is increasingly a job for graduates - or even post-grads in the more complex roles.

What you need to get the job

1 - Broking

The usual starting point is as a trade or sales assistant. In the big international banks, these will be exclusively graduate jobs, usually requiring a 2:1 in a subject with some element of maths in it, from a well-respected university. These firms recruit on a fairly formal basis, so look to the 'milk round' as the first point of call, or check their websites to see when they are holding interviews outside of the milk round.

Things are rather different in specialist broking firms, which often have a bit more of a wheeler-dealer ethos. Relationships are important in the sales process, so these firms will also look for very articulate, personable individuals who can work in a sales relationship with a client. If you aspire to work in this area, it is worthwhile contacting these smaller firms and seeing what they’ve got. That’s the sort of attitude they like!

To deal directly with customers in the broking world, you will need formal regulatory qualifications. Usually this would be the Certificate in Securities from the Securities and Investment Institute. Some people do this qualification before they apply for a job, which shows real intent and commitment.

2 - Proprietary traders

There are two key routes into this. The first is to be directly recruited into an assistant's role with the hope of progressing further. You will need a 2:1 in a quantitative subject from a top university. Often, a master’s degree will help. In some of the very complex derivative markets, PhDs in maths are not unheard of. Usually, banks will expect you to take the same regulatory qualifications as the brokers. However, in this role, you will not actually be advising customers, so whether these qualifications are really necessary is questionable. Nevertheless, it does at least ensure that people have the basics before they start developing their own advanced trading strategies.

The other route is to be given the opportunity to trade the bank's own money after experience of being a broker. Executing customer orders and getting a feel for the market is the perfect training for trading on the bank's 'own account'.

Qualifications and career progression

Progressing from sales or trading assistant to broking and then on to proprietary trading (at least in bigger firms) provides ample scope for development and earnings. Beyond this, you can move into more complex markets (from, say, share trading to derivatives) and these usually provide better rewards. You could also, after a number of years of experience, become the 'head of desk' — the person who manages all the brokers and dealers dealing in a common product. So, if a group of dealers trade in European stocks, one does Germany, another does France and another Italy, and the head of desk manages the whole group.

Above everyone is the head of trading. He or she keeps an eye on the risks that trading unit as a whole is taking, and makes sure those risks are controlled. They work closely with the risk department and compliance (see Credit risk officer and Compliance officer) and with senior managers to control the complex risks of trading in the markets.

There are few specific qualifications in this area. The financial markets comprise dozens of interrelated but separate markets, so the key is to gain firsthand knowledge of one or more of them. Thereafter, further career progression can be via a number of different routes, some more formal than others, you may wish to undertake the Certificate in International Trade and Finance (CITF).

The Securities and Investments Institute has many advanced certificates in specific markets, and these may well help career progression. A professional qualification, such as Chartered Financial Analyst (CFA), may be advantageous. This US qualification builds understanding of core financial calculations, investment models and corporate funding options. While it is more commonly taken by corporate financiers and analysts (see: Financial analyst), it is becoming a more popular option than UK-based alternatives.

More important than such formal qualifications, however, are your maths skills, your ability to analyse risk, and your personality — particularly your ability to deal with customers and internal staff in stressful circumstances.

Income

It is very difficult to quantify income levels as they are very variable and are mainly based on good salaries topped up (on occasion) by extraordinary bonuses. But, here is a general guide.

Starting salaries

These vary by role.

£15,000—£25,000 plus bonus of 10-100% for a trade support assistant.

Career incomes

These also vary according to the role.

£50,000—£200,000 plus bonus of 10-100% for a broker.

£50,000—£500,000 for a proprietary dealer, plus bonuses, which in some markets can reach £1 million plus.

$10-20 million, including bonus, for a number of heads of trading.