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Saks

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I'm on the risk side. First, as was pointed out before, organizations differ in their risk management practices -- risk at a bank is different than a hedge fund, obviously (or maybe not so obviously) but the set up at each bank can vary widely. There are several different types of roles that are under the umbrella of risk, so that may be the cause of some of the confusion as to what people do. There are roles that do one or a combination of the 3 things JDV pointed out as necessary skills.

I am on the credit side. I would say that the CFA curriculum has been helpful just as JDV pointed out -- I have literally seen stuff in corp fin, accting the very next day in my job (I ignore all the haters' comments of "the CFA is too equity focused to be relavant to what WE do" - which just means the speaker failed a level and gave up at some point). The fixed income and deriviatives covered in the curriculum are very very basic compared to what I do + have done coursework in.

There is one other guy in my group who holds the charter, but I am not really sure why he pursued it. Many of the new hires are beginning the CFA program but I think it is young herd mentality.

I have no real knowledge of the PRM / FRM but I am not tied to risk as a long time career so for me, the CFA is more in line with my career goals. Also, the CFA is widely recognizable and known, here in the US and abroad.

I would say that we typically hire (across the market and credit side, from the "quant" that I do to the real real quant) people with a science/engineering/math background with Master's level work in finance, math, or quant fin. I think progression in the program shows that the candidate has an extra dimension -- often times the backgrounds that I mentioned are at a loss for the intuition, the tangible part of the products....i.e. like they understand Merton structural model of default but don't understand that when times get tough, the firm will draw all its revolvers down fast.
 
All,

Thanks for the replies. Sounds like I'm on the right track with the CFA but I guess it wouldn't hurt if I get a FRM/PRM too. I have a MS in Finance but is it worth pursuing the Ms in Financial Mathematics offered at the U of Chicago?
I've been to the Wilmott Forum where all the hard core Quants lurk and the general consensus is that only a PhD in Math/Physics/Stats would help. But if I'm not looking to do modelling, I probably would not need a PhD...isn't that so?

Joey,
If you dont mind me asking: why are you interested in the CFA? You seem very accomplished in your field - are you thinking of changing to another?
 
coolmelon, I would focus only on the CFA at this point in your career (and of course getting some experience!). I am not so sure that your employer will pay you for those other designations (to me this is part of the smell test). Pursing both CFA and or FRM would look like a letter collector IMHO.

What is the difference between MS finance and MS financial math? Basically you could have chosen a very similar courseload in the MS finance to the MS financial math and you didn't, so you want a second master's? Unless you want to terminate in a PHD. Programs are leery to admit folks like that.

Don't let those Wilmott folks get you down, they are probably focused on only certain roles, where their advice is more relevant. There are several roles that do not require, and in fact dissuade, PHds from applying. They tend to be more practical (i.e. applying the models daily) rather than theoretical (building the models).
 
I used to work in risk. I was in credit risk so the CFA was obviously much more relevant. For the rest of my group it varried, we had a few charterholders and a few people on the way across credit, market, and ops risk. No FRMs / PRMs. Those would of course not hurt you, but if you have time to do just one, I think the obvious answer is the CFA, it is the most widely recognized. But this is a CFA board so that is the answer you would expect.
 
Saks, Big Nodge et al,

Thanks for the advice - very much appreciated!
 
I don't think you necessarily have to have a Phd. in a quant field to be a good risk manager. However I do agree you must understand all the positions.

Most Senior Risk managers do not have Phds. There simply is just not enough of them to fill all the demand. You do have to exceptional quantitative skills. Nevertheless the risk manager at my firm has an MBA in Finance not a Phd, our group is responsible for 48 billion.

I can believe at some hedge fund thats running some complex arbs, sure, all the RM guys are Phd's, but not at most places.

The trend is moving towards everyone having a more quant background but there is still an even bigger demand for people with common sense who can do things like trade. Most quants are great with numbers but they can't make decisions because they have to analyze everything to death, by that time opportunities are gone.

If you want to be left alone to do your work, and be stuck on calls all day...be a quant or non-quant analyst.
If you want to be be at the center of the action, and have the chance to compete for the highest salary and bonuses, trade, be a PM, or IB, bottom line, do something that brings in money where you have plenty of face time with clients.
 
I'll bet there are Ph.D.'s in your group or you are not trading anything very quantitative.

That stuff about Ph.D.'s being over-analytic and not having common sense is silly.
 
FYI our group structures, manages and trades CDOs and all of there variants. We recently won the Fitch ratings number one CDO manager in the world.

None of our traders have Phds. One of them did not even graduate college( ironically the MD of trading), however, he has been in the game since the late 60s trading all different types of ABS and the like.

The only five or six Phds. in our group are dealing with structure which also emcompases RM.

I never said Phds. can't make decisions or have no common sense. Nevertheless, I have seen with my own eyes Phds are generally not the smartest guys in the room. I've seen them getting schooled by people with far less education but much more fundamental knowledge of markets and the underlying securities than vice versa. They do however have the unique talent of model their bosses ideas in mathematical format and augmenting pre-existing tools to handle more complex tasks.

I'm sorry but a lot of these come from Physics and Engineering backgrounds and have only have been on the front lines of the business for less than five years. Some folks in less quant roles have been in the game for 10+ years, and they seem to know a lot more than people who are the smartest on paper. Everyone respects their nerd value but it's not like these guys are inexpendable or everyone relies on them to stay a float. The people who do the best ( who are the most important) are the people selling deals, bringing in new clients, and managing the portfolios plain and simple the people rubbing elbows with clients, trustees, etc. Much of what they do is dependent on quant analysis but only so far as things like getting the green light on say the structure of a deal meeting certain stress tests. Once the deal is past the early phases quants get phased out.

It may be different elsewhere but thats how it is my group.

Lastly, I'm an intern. I sit right next to three Phds. one in physics, the other in Chem Eng., the last in Comp Science. I watch them work 12 hours a day and am always snooping around trying to get them to explain to me what they are doing. Trust me they enjoy this because not to many other folks are too interested in what their doing.

Great pay( the guy with PHd in Physics has been with the group for less than a year and he's pulling in 240k plus bonus), but the work is thankless.

I'd probably consider it if I had knew about those type of positions when I was younger, but at my age (25) I'm comfy being groomed for a credit analysis, or asst PM role. Not interested in spending 4 or 5 more years in school.
 
FYI our group structures, manages and trades CDOs and all of there variants. We recently won the Fitch ratings number one CDO manager in the world.

None of our traders have Phds. One of them did not even graduate college( ironically the MD of trading), however, he has been in the game since the late 60s trading all different types of ABS and the like.

The only five or six Phds. in our group are dealing with structure which also emcompases RM.

I never said Phds. can't make decisions or have no common sense. Nevertheless, I have seen with my own eyes Phds are generally not the smartest guys in the room. I've seen them getting schooled by people with far less education but much more fundamental knowledge of markets and the underlying securities than vice versa. They do however have the unique talent of model their bosses ideas in mathematical format and augmenting pre-existing tools to handle more complex tasks.

I'm sorry but a lot of these come from Physics and Engineering backgrounds and have only have been on the front lines of the business for less than five years. Some folks in less quant roles have been in the game for 10+ years, and they seem to know a lot more than people who are the smartest on paper. Everyone respects their nerd value but it's not like these guys are inexpendable or everyone relies on them to stay a float. The people who do the best ( who are the most important) are the people selling deals, bringing in new clients, and managing the portfolios plain and simple the people rubbing elbows with clients, trustees, etc. Much of what they do is dependent on quant analysis but only so far as things like getting the green light on say the structure of a deal meeting certain stress tests. Once the deal is past the early phases quants get phased out.

It may be different elsewhere but thats how it is my group.

Lastly, I'm an intern. I sit right next to three Phds. one in physics, the other in Chem Eng., the last in Comp Science. I watch them work 12 hours a day and am always snooping around trying to get them to explain to me what they are doing. Trust me they enjoy this because not to many other folks are too interested in what their doing.

Great pay( the guy with PHd in Physics has been with the group for less than a year and he's pulling in 240k plus bonus), but the work is thankless.

I'd probably consider it if I had knew about those type of positions when I was younger, but at my age (25) I'm comfy being groomed for a credit analysis, or asst PM role. Not interested in spending 4 or 5 more years in school.
 
Saks Wrote:
-------------------------------------------------------
> Don't let those Wilmott folks get you down, they
> are probably focused on only certain roles, where
> their advice is more relevant.

I like arguing there from time to time. They don't have JoeyDVivre there who knows answers to all questions.
 
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