What’s Front Office Trading?

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Front office trading is an activity at an investment bank or similar financial institution that focuses on the buying and selling of investment products for the benefit of the firm and its clients. Traders and support staff are both involved in front office trading, assisted by operations in the center and back office. The size of a business determines how many traders and support staff it needs, and the business may have multiple branches to serve clients in different regions. Work in this part of the financial industry can be high risk but can also carry high rewards if a trader is skilled and competent.

One aspect of front office trading involves meeting with clients to discuss concerns and goals. This helps traders develop investment plans tailored to individual customers. They can carry out transactions on behalf of the client and can make financial recommendations to assist clients in decisions about what to hold, sell and transfer. This job requires good communication skills, as clients need to be able to understand their options and risks. Tradesmen representing their employers need to think about the long-term needs of the institution in their business activities.

Part of front office trading includes research. Traders must know what is happening in the financial market and must also be familiar with new financial products. Customers may have questions or request product recommendations. In some companies, new products are developed in-house and front office personnel are part of this process. They help design new products and services to meet the needs of their customers while balancing the interests of the company.

As the public face of their employers, front office sales staff members engage in public relations and outreach to win customers and keep customers. They must be pleasant and available to answer questions and address concerns. Very large clients such as institutions may be assigned a specific operator who works primarily on their needs, which can be complex and may change as market conditions change.

Working in the front office commercial department requires a variety of skill sets. Registered brokers and traders are required, along with computer developers to work on the software used to support the assets. Financial analysts are useful, as are public relations specialists. More robust financial analysis, including risk assessments, takes place in the head office, where staff work with the front office to keep negotiations running smoothly, identify legal issues and address various business issues.

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