<p>A previous thread discussing S&T pretty much covered everything that there is to know about trading. (Although I would still like to ask whether trading is exclusively for quants, or are there non-quant traders as well)</p>
<p>Can someone with knowledge shed some light on the "Sales" part of S&T.
The usual queries: Pay, skills required, stress and difficulty to get into.</p>
<p>Here is a trick question - what’s the difference between Sales & Trading?</p>
<p>Sales - they are paid a base salary, then they are paid bonus based on their production credit. Before all the foreign firms came to this country, almost every BB firm used a common commission scale - govi on the run bonds were paid x bps/mil, corporate bond were paid a certain scale, structured products were paid higher commissions, etc. If someone were to say their “production credit” was 20 mil, then most employers on the street would know what kind of producer he/she is. Most salespeople would have it in their contract to say if their production credit is between 5-7 mil then bonus would X, 7-10 would be Y. </p>
<p>Many salespeople rely on other people (research, product specialist) to help them come up with trade ideas. But good, smart salespeople crunch numbers themselves and come up with their own trade ideas. Salespeople earn production credit when their clients buy or sell, so if they could help their client swap out some of their holdings with other investment to increase their return, it’s good for the client and it’s good for the firm. People do a lot of trading electronically now, a salesperson must add value.</p>
<p>Sales at many firms are organized by product or by client type. Client type would be like central banks, hedge fund, pension; product type would be muni, corporats, abs, structured credit, equity… A large client would have multiple sales product specialist covering them, and may have an overall senior relationship manager.</p>
<p>Skills required - very social, smart (but not a genius). It is very stressful if you can’t make your production credit, but once you do then you could take it easy (production credit is calculated daily). You are as good as your client list. The biggest downside is it is not a transferrable skill to any other area or industry. Same could be said for trading.</p>
<p>Trading is absolutely not exclusively for quants. There are many products which are less complex, such as treasuries, passthrus, fx spot, etc. Even people on structured products and options desks don’t always have intense mathematical background.</p>
<p>“The biggest downside is it is not a transferrable skill to any other area or industry”. </p>
<p>Any good institutional salesperson can “sell themselves” into any industry that involves sales…(can personally vouch for that)!!</p>
<p>So then, how difficult is to break into the sales department. From the stuff I’ve read on this forum, anyone who did not go to a “target” will find it very difficult to get into IBD.</p>
<p>What about sales? Is it equally difficult to get into? Do you have to go to a target school to stand a chance?</p>
<p>And will being a few years older at the time of graduating college be an disadvantage? I am somewhat a non-traditional student in that I immigrated to the United States after graduating high school and did blue collar stuff for 2 years before deciding on going to college. Basically, I’ll be 24 when I graduate college. (Ceteris paribus everything else, how bad is it to be 24 when you graduate college if you are trying to get into something as competitive as IB)</p>
<p>The only thing that I want to be is sales. I feel like it is a fit for my personality.</p>
<p>And how would you rate these schools if I wanted to get a sales spot at a IB firm.</p>
<p>SUNY-Binghamton.
Claremont McKenna.</p>
<p>S&T is pretty much the same recruiting wise as IBD in that you pretty much have to go to a target school… its not impossible, but extremely from a non-target.</p>
<p>I don’t think the age thing will matter much as long as your creds are good.</p>
<p>I think it would be extremely difficult from either of those schools, though I honestly know nothing about Claremont.</p>
<p>noremorse - a way in would be through a back door. You could try to get in by doing operations or middle office first, then when the market is good ask someone in sales to give you a chance. I have seen it happen often. This was a year some firm couldn’t get enough salespeople after they fired so many last year. I will say it again that it is not an area I would encourage my college age kid to go into. I would rather if she did investment banking, corporate finance, or M&A. I am seeing too many middle aged institutional salespeople with no future employment prospect.</p>
<p>Sales–take crappy stuff the firm does not want to hold and attempt to dump it on unsuspecting people who are dumb enough to trust you. </p>
<p>[Goldman</a> Sachs and Others Investigated for Betting Against Securities They Created, page 1](<a href=“AboveTopSecret.com - Conspiracy Theories, UFOs, Paranormal, Politics, and other "alternative topics" - home page for Wednesday, May 15, 2024”>Goldman Sachs and Others Investigated for Betting Against Securities They Created, page 1)</p>
<p>Link to full article on GS sales</p>
<p><a href=“http://www.nytimes.com/2009/12/24/business/24trading.html?_r=1&ref=business[/url]”>http://www.nytimes.com/2009/12/24/business/24trading.html?_r=1&ref=business</a></p>
<p>“I will say it again that it is not an area I would encourage my college age kid to go into.”</p>
<p>Does this apply to just sales, or trading too?</p>
<p>Especially trading, at least with sales maybe you could still use the same skill to sale dog food. Traders are not trained to be managers (people), marketers, relationship managers (clients). They don’t even know how to manage a portfolio because they often only know one product. With younger traders, a firm could afford to move them to different desks if they should decide to get out of a line of business. But with seasoned traders it would be more costly - look at all the MBS traders on the street. Traders work under a lot of pressure, that’s also why they like younger traders. If you are very disciplined, you could save your money and do something else after 35 or 40 (the question is what). This is just my opinion.</p>
<p>He has his own opinion, which he is entitled to. But don’t think the rest of the world feels that way.</p>
<p>Gah! Oldfort, that’s seriously discouraging. =( I suppose I could try for law school if trading doesn’t work out, or do an MBA, but I really don’t want to approach trading that way.</p>
<p>What’s MBS?</p>
<p>Mortgage Backed Securities (MBS). Seriously, that is his opinion, I have a completely different one. There are tons of people on the buy side who used to be sell-side traders. If you like dealing with markets, then it is not a big deal. You can always go back to school if you decide you want to change careers.</p>
<p>This is truly just my opinion and I for one love to hear happy stories. I have never worked anywhere but IB (from front to back), except for a few years at a dot com company. I used to be in the front office, but decided to go into technology to support S&T (I have never taken a computer course in my life). Most of my closest friends are also in the business by default (when you spend so much time at work…). But my perspective is of someone over 40. Some of my friends were displaced in the recent economic down turn. People outside of S&T were able to find jobs in matter of months. My brother, used to be head of sales at a BB is still looking after a year. He is also of the opinion of going to buy side. In advising my daughter, he said either to go to buy side or investment banking (m&a, corporate finance). As far as changing careers by going back to school - it’s much harder when you are over 30 with kids on the way. Whatever you do, alway think about an out, what skills could you acquire at a job to get you the next job. In my case, I was in structured product which required a lot of “computing,” so I became very proficient with financial modeling and computer programming.</p>
<p>FYI - I am a woman, one of very few 25 years ago on the Street.</p>
<p>
Maybe you could go into a little bit more detail about this point for the younger people. It’s quite possible their only exposure to “selling” is in retail or the like.</p>
<p>How does one develop a client list? Etc.</p>
<p>Most people out of training program will start off as a sales assistant, and gradually given clients to cover over time. At BB firms, there is very little cold calling. You are usually assigned to a sales team and are given better list of clients as you are able to generate more revenue. A salesperson cannot do business with any client that’s not assigned to them, except if they are new. When a ticket comes through, credit is given to the salesperson who covers the client, it doesn’t matter who actually generated the sale. </p>
<p>As there are many sell side firms, large institutions will only deal with a handful of them. It is important to get on buy side firm’s approved list, and it is not always easy if an IB never had any relationship with them before. It is up to the salesperson to cultivate that relationship and deepen it over time. It is not as simple as taking them out to dinner or give good box seats. Those clients, after all have managers they are reporting to, need to make sure whoever they are dealing could add value to their institution’s bottom line (and make their life easier by providing them with analytical tools or good research sometimes). A good salesperson needs to show their client range of products his firm could offer, or the depth of a particular product a client is interest in. As an example, if a client is interested in investing in emerging market, and your firm does not do much new issuance in that area, then there is no point in doing business with your firm. On the flip side is a salesperson may see great potential in doing business with a new client, his firm may find the client is not credit worthy to do business with. It takes effort on a salesperson’s side to convince senior management to do business with a new client. </p>
<p>The most important thing a salesperson needs to do is to be able to get a client to take his phone calls. I always say it takes a “village” to make a good salesperson: 1) good trading desk(s) to give competitive pricing to clients, 2) research, 3) quant group, 4) middle office, 5) operations, 6) IT… Often seasoned salespeople from a BB firm make a move to a smaller firm by taking the client list with them. The smaller firm maybe willing to pay up because it’s a business they never had before. Those salespeople quickly find out their new firm is not on the clients’ approved list, their traders are not competitive in pricing, not very good at providing repo, or their trades fail because the back office is not efficient or automated. It is a reason why salespeople ask for guaranteed bonus for a first few years when they move to a new firm, because many of those issues are out of their control and could impact their production credit. </p>
<p>A big producer in one region with a nice client list would not be able to demand similar type of compensation or get a job when moving to another region. In my brother’s case, he covered central banks in the Far East. When he wanted to move back to the US it was very difficult for him. He knew the products, but he didn’t have the right client list to offer to future employer to help bring in revenue right away. </p>
<p>I hope this is helpful.</p>