Front office & Back office

What is the difference between front & back offices. Are they both part of investment banks?

Are graduates likely to be recruited for front office jobs... im guessing its better than back office right?

Is it different in terms of pay scale aswell?

Reply 1

ElWilson

Back office departments are departments not directly involved in sales or trading. Some back office functions include cashiering, accounting, and the record keeping of clients' cash or margin accounts. But are generally in the transactions of finance.

As for salaries, I don't know.

Reply 2

President_Ben

ElWilson knows diddly :wink:

Front office is revenue generating and client/external entity facing.
Back office is operational, revenue saving and internal facing.

There is a middle office which combines elements of both (say, HR for example)

Most IBs recruit for all divisions. The salary potential is multiples higher in the front office.

Front office: Corp Fin (and all that it involves from M&A to leveraged finance advisory), Markets (sales, trading, research, structuring), Capital Markets (origination, syndication - broadly issuing) , Asset Management (institutional, private wealth)

Back office: Technology (internally - development - and externally - integration), Operations - tends to get split into more divisions with a more meaningful names that vary from place to place (eg. compliance, finance, controlling, treasury). Covers a huge number of areas.