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Sales and Trading Career Path

Everything you wanted to know about a Sales & Trading Career Path and exit opportunities

Career progression ladder from intern to MD

Sales and trading offer a lucrative career path, with ample and structured opportunities for internal promotion opportunities. The career progression for S&T professionals is as follows (most junior listed first):

  • Analysts
  • Associate
  • Vice president
  • Director
  • Managing Director

Unlike investment banking which is very hierarchical, sales and trading has a very flat organizational structure. In sales and trading, you sit within your asset class and role. I sat beside my managing directors (MDs) and they knew what I ate for lunch, what I was working on, and which friends I was chatting to.

MBA not required

While investment banking generally has two separate streams with analysts being pre-MBA students and associates being post-MBA. In sales and trading, an MBA is generally not required and progressing from analyst to associate and then onto VP is quite common.

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Sales & trading career path, roles and responsibilities

The titles in Sales & Trading are the same as in investment banking: The sales and trading profession has always worked as an apprenticeship model. Senior salespeople and traders train up juniors and give them increasingly larger responsibility. The analyst to associate promotion ("a to a") is generally straight forward. From Associate onward, top performers are promoted early while under-performers could hold onto their roles for a fairly long time.

Role Sales Trading
Intern
  • Observer, not licensed to speak to transact with clients
  • Observer, not licensed to transact or trade
Analyst
  • Support senior salespeople in covering large clients.
  • May cover small clients
  • Supporting a Trading Desk
  • Prepares Runs, Commentaries
  • Executes Hedges
Associate
  • Begin to cover medium-sized clients
  • Trader that facilitates client flows
  • Supports a more senior trader owns the P&L of the trading book
Vice President
  • Covers medium to larger clients
  • Manages a trading book, a distinct type of product (i.e. short expiry interest rate options)
  • May have an analyst or an associate support their trading book
Director, Executive Director (ED), Senior Vice President
  • Covers a portfolio or larger clients
  • Relationship manager role for larger clients with a junior responsible for execution
  • Manages a trading book, generally a larger more profitable business than a VP
  • Larger risk limits and discretion on how to manage positions
  • May have an analyst or an associate support their trading book
Managing Director
  • Manager of a Sales Team
  • Relationship manager for the largest clients
  • Manager of a Trading Desk
  • Oversees positions and risk limits
  • Manages positions and risks of the largest trades

Although the hierarchy was flat and I knew my MDs well, there was a natural pyramid ratio of how many MDs to Directors to VPs to Associates to Analysts.

In my experience

I got hired right before the Great Financial Crisis, so in the years before me, hiring was strong. There were lots of people senior to me.  Immediately after the Great Financial Crisis, hiring was more muted. There were layoffs across the industry and managers were more cautious about bringing on new analysts.

About 5 years after the Lehman Bankruptcy, most trading floors had a lot of MDs, Directors and VPs as the Analysts and Associates like me hired before the crisis have gotten promoted, and very few analysts and associates from more muted hiring. Promotions were hard beyond VP and all banks were positioned the same way. They had VPs wanting to be Directors, but not enough Director spots, Directors wanting to be MDs but not enough MD spots. A lot of my experience was structural based on hiring patterns when I was hired. A new hire today would be in a much better position to progress quickly.

Exit Opportunities in Sales and Trading

Unlike in investment banking, there isn’t the same focus on exit opportunities in sales and trading. In investment banking, there is a very different skill set between what a good analysts does (builds great excel financial models) to what a great MD does (builds great relationships and wins M&A mandates). A great Investment Banking MD doesn't need to open up excel, while those financial modelling skills are in demand at Private Equity firms.

Investment banking is a relationship business at the MD level, and because the relationships you need are at the most senior levels, you need time for those relationships to develop. Perhaps some of these relationships are built during business school, and maybe your b-school friend moves up the corporate development program at a fortune 500 company and becomes the CEO.

Sales & Trading relationships are at an execution level. You can be a junior salesperson and cover people much older than you are. I've done it. One of my good friends graduated college early and by the time he started as a salesperson, he was 20. He was covering clients twice his age and wasn't allowed to order alcohol for himself for client entertainment. The client coverage skills he developed as an 20 year old analyst were the same skills he needed as a 30 year old Director.

If I wanted to leave, what are typical options?

Hedge Funds: Some traders move to hedge funds and switch roles from a flow market maker to a prop trader. Many hedge funds like to hire bulge bracket traders as they understand both the nuances of the particular product they trade as well as the broader supply and demand dynamics from a broad range of investors. It's a different job, and certainly not for everybody

Asset management: Asset management is also a potential exit opportunity for sales and traders. The motivation for this switch is generally a lifestyle change. There is more location flexibility for asset management and is generally a less stressful work environment. Average pay scales are generally lower in asset management than in sales and trading but there is significant variation on both sides.

Something different: The Sales and Trading job is fast paced and is stressful. Health reasons have ended careers early and I unfortunately saw a colleague have a heart attack on the trading floor two rows behind me. Burnout happens and people choose a completely different path. I've seen colleagues go from selling bonds to sales at a tech company, built their own start up company, or started their own clothing line.

Eric Cheung
Wall Street Prep Head of Markets Training
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