SERVING THE QUANTITATIVE FINANCE COMMUNITY

 
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Alekk
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Joined: September 14th, 2007, 4:39 pm

consulting vs quantitative finance

August 28th, 2010, 3:29 am

quite a lot of maths/physics PhD people go to the quantitative finance industry while I have recently discussed with a couple of guys who chose to go in a consulting firm (like McKinsey, Ernst Young) - I kind of know what a typical quant does (and the money he can get for that) but have absolutely no idea of the kind of work a typical guy (with maths/physics background) in a consulting firm does, and the money he gets for that.It highly depends on the firm and the guy, but still, I would love to have some comments on that. From what I have heard from a few guys who did an internship over there, people do not really need sophisticated tools (very basic, actually) but it sounded very interesting. The money was not as good as in the banking industry, though.
 
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mrmister
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Joined: August 15th, 2009, 4:33 pm

consulting vs quantitative finance

August 28th, 2010, 4:47 am

To say that you require any technical toolkit to succeed in management consulting is pure drivel. People skills matter a lot.QuoteOriginally posted by: Alekkquite a lot of maths/physics PhD people go to the quantitative finance industry while I have recently discussed with a couple of guys who chose to go in a consulting firm (like McKinsey, Ernst Young) - I kind of know what a typical quant does (and the money he can get for that) but have absolutely no idea of the kind of work a typical guy (with maths/physics background) in a consulting firm does, and the money he gets for that.It highly depends on the firm and the guy, but still, I would love to have some comments on that. From what I have heard from a few guys who did an internship over there, people do not really need sophisticated tools (very basic, actually) but it sounded very interesting. The money was not as good as in the banking industry, though.
 
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TwoBit
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consulting vs quantitative finance

August 28th, 2010, 8:13 am

The salary comparison surely depends on what role you mean in quant finance. I think Associate (PhD/MBA) salaries at top consultancies are $120-150k, the usual comparison is with with top law firms who start on about $160k. After 5 years total comp can be $300-500k+ in consultancy with JVPs and JPs, or even just senior consultants, not too dissimilar to good roles in quant finance I believe.Consultancies are more finishing schools for those who will be future board members, they don't really stay on much longer. I imagine that the four main strategy consultancies McK, Booz, Boston, Bain and smaller specialist ones pay more than Accenture or consulting arms of accountancies.
 
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traderjoe1976
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consulting vs quantitative finance

August 28th, 2010, 11:07 am

Consulting normally requires MBA degree. They pay 30% - 50% less than IB. It requires lot of travel. Long hours, but not as long as IB. Also, you have to account for every 10 minutes of your workday which is billed to the client.
 
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photoguy
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consulting vs quantitative finance

August 28th, 2010, 2:15 pm

Alekk - check your PM.
 
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quantmeh
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consulting vs quantitative finance

August 28th, 2010, 2:38 pm

QuoteOriginally posted by: AlekkFrom what I have heard from a few guys who did an internship over there, people do not really need sophisticated tools (very basic, actually) but it sounded very interesting. The money was not as good as in the banking industry, though.it's up or out environment there, i.e. you either grow to become a partner at some point or they kick you out if you didn't progress within given time. it's all about people skills and relationship building in these companies. i doubt they're quantitative at all. ok, they can 'build models in Excel', if you know what i mean. i think most of what they do is b/s, but C-people like them. it's a mystery to me why, one guess is that they can produce good documentation, strategy white papers etc. i can't write this junk even if water boarded, yet there's demand apparently
 
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GiusCo
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consulting vs quantitative finance

August 28th, 2010, 2:57 pm

fundamentally if you are really good you can work as a self-employed and solve others' problems at requestthere is some untold protectionism in the hiring process of the service industry and it is not really possible to have the entire globe as a pool to get your fish (or as a meadow to buy your cattle) ... for this reason it happens that companies are more a lobby than producers of net value, so they need to put up smoke and mark their territoryif you are really good at something or if you really want to, the internet makes contact with the best in your field without any middle-man ... make a portfolio of activities you are really good at and sell yourself at global level instead of being bullied by pimps and crappy corrupted inane bureaucrats
 
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Telecaster
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consulting vs quantitative finance

August 30th, 2010, 8:07 pm

Last edited by Telecaster on November 14th, 2012, 11:00 pm, edited 1 time in total.
 
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AlexandreB
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consulting vs quantitative finance

August 31st, 2010, 3:12 am

I recently met with an individual who work full time in risk management for McKinsey. Prior to that he did a phd in math on group actions on manifolds at the University of Chicago. His advisor was Robert Zimmer, the current president of the university. He gave me the impression of being very bright.
 
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mrmister
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Joined: August 15th, 2009, 4:33 pm

consulting vs quantitative finance

August 31st, 2010, 4:27 am

QuoteOriginally posted by: AlexandreBI recently met with an individual who work full time in risk management for McKinsey. Prior to that he did a phd in math on group actions on manifolds at the University of Chicago. His advisor was Robert Zimmer, the current president of the university. He gave me the impression of being very bright.He might have been very bright but he made a poor career choice if you ask people on this forum. Or maybe he did exactly what he wanted to do, and was sick of mathematics. Maybe he wanted to travel a lot.
 
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AbhiJ
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consulting vs quantitative finance

August 31st, 2010, 4:40 am

QuoteOriginally posted by: Telecaster The best description of consulting was summarized to me by a McKinsey partner during a careers event at my university: "consultants are people you pay to tell you the time from your own watch".I know a few people from my engineering class who went into consulting and I can assure you that they weren't the brightest bulbs in the room. The work entails spending months in a client's office and telling the management how to do its job. It's a mixture of common sense and people skills. As pointed out by others, people go into consulting with the aim of making connections and later getting employed by one of their former clients.Ask your Mckinsey friend what he think of quant developers. Common sense is very uncommon.
 
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Alekk
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Joined: September 14th, 2007, 4:39 pm

consulting vs quantitative finance

August 31st, 2010, 7:17 am

It might not be the best idea to post this question on a quantitative finance forum, but I must admit that I am a little bit surprised by the comments that have been given - if consulting is such as it has been described here, why would clever people want to pay loads of money to get advice from consulting firms? There is an arbitrage somewhere !Also, the fact that one hyper talented maths guy made a move to a consulting firm does not mean anything. It suffices to enter any maths department to realize that.
 
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DominicConnor
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Joined: July 14th, 2002, 3:00 am

consulting vs quantitative finance

August 31st, 2010, 9:55 am

I'm not sure how to compare pay at consultancies vs banks.Although you can say "masters level people earn X% less" at a consultancy, my experience is that in this line of work on average E&Y, Accenture, and similar firms higher people are are less capable, less motivated, and generally less useful in ways that don't easily show up in stats.Money is one factor, but the desire to hire well spoken white men means that their banking consultants aren't the sharpest knives in the drawer.Obviously in their offshored operations, the race filter isn't used, since they are rarely put in front of candidates.If you're good at selling, then this can be a viable option, but as I think we all know, there's a negative correlation between quant skills and salesmanship.AlexandreB illustrates another, important data point. The big consultancy firms like to have 'stars', because this helps in sales. The idea is that a client gets to meet the big star, and if he's big enough will appear on Bloomberg TV occasionally, or maybe even main channel news. He will be well paid, and not worked very hard, partly because the drones you actually get on site are forbidden even to email the great man.Alekk asks "if consulting is such as it has been described here, why would clever people want to pay loads of money to get advice from consulting firms? There is an arbitrage somewhere !"Partly because banks have such poor institutional knowledge, and few if any mechanisms to spread it. They contain many specialists who may have no real peer anywhere in their firm, and there is an upper bound to the complexity of question you can get answered on Wilmott.com, or the board that serves your personal speciality. Often managers are trying to understand business units that their experience and education does not qualify them for, and have no objective way of telling whether things are working properly.Some consultancies, the likes of dfine, Ito33 et al have some smart people, but they can't easily get past the institutional desire of big banks to get in a big firm, even if they are strikingly incompetent and dishonest.
 
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twofish
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Joined: February 18th, 2005, 6:51 pm

consulting vs quantitative finance

August 31st, 2010, 10:31 am

QuoteOriginally posted by: AlekkIt might not be the best idea to post this question on a quantitative finance forum, but I must admit that I am a little bit surprised by the comments that have been given - if consulting is such as it has been described here, why would clever people want to pay loads of money to get advice from consulting firms?Because when everything goes bad, you can blame the consultant. One thing that you have to understand about corporations is that the money to pay for someone doesn't come out of your salary.
 
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EscapeArtist999
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Joined: May 20th, 2009, 2:49 pm

consulting vs quantitative finance

August 31st, 2010, 11:41 am

QuoteOriginally posted by: twofishQuoteOriginally posted by: AlekkIt might not be the best idea to post this question on a quantitative finance forum, but I must admit that I am a little bit surprised by the comments that have been given - if consulting is such as it has been described here, why would clever people want to pay loads of money to get advice from consulting firms?Because when everything goes bad, you can blame the consultant. One thing that you have to understand about corporations is that the money to pay for someone doesn't come out of your salary.I hate to admit this, but I agree with twofish... Oh what's that, nothing, just a flying pig.
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