Hi Everyone, I'm recently approached by a recuiter regarding a quant role at one IDB. Before I go to phone interview, I want to understand the role quant plays at IDB, such as ICAP, GFI, BGC etc.?I assume, it's a relatively unknown space to most quants, as I couldn't dig out more information about it on this board. What's the difference between what they do and what their counterparts do at banks and funds? Because IDB doesn't take a position, does it really matter they have a solid quant team?Also, there are talks about how the new regulation may put pressure on the profit margin those brokerage get, 10 years ago, people also talked about how electronic trading would sentence them to death, but they survived. What's the 5-10 year outlook for this industry as a whole?Thank you all for your kind help in advance!

Most quants i know in IDB want out.

They usually work on developing pricing models for brokers. - I don't think there is good career progression for a good quant in a brokerage unless they head a dept and most quants tell me that they feel under appreciated.

thanks, although it doesn't sound encouraging...but is this still considerred "front office" position, say after a couple years, is it generally easy or difficult to move on to a fund or a desk on banks? do they generally underpay their quants (I suspect this is the case)?thanks again!

It depends on the brokerage house. I worked for the interest rate option desk of ICAP in London for five years as a quant and even if it was stressful from the first to the last day, I can say that it was probably the best job I ever had: high pressure, very dynamic environment but working at an arm length from the brokers and completely immersed in the market.In terms of job type, quants at a broker house need models exactly as the banks do. When I moved to ICAP I was told by the head of the quant team for an American bank with whom I had an alternative interview that a broker simply needs to collect a few prices and average them together. Not true in the exotic area: a broker doesn't hedge but need to have a good model to know how to quote a price to offer an indication of where the instrument trades. Without that no bank will be willing to work the price or to give information back.As far as my experience was involved I'd say that the good points are:1. Generally smaller teams where there is the possibility of learning much more than in a big bank where one will generally focus on a single field2. Very dynamic and where the market/brokers drives the development rather than internal politics or often incompetent IT project managers3. You get to see the whole market and you really need to dirty your hands with the real numbers as well with your mathematical models.4. The human aspects: brokers are strange animals at times, but no day is like the previous one! Interesting at all timeThe bad points are probably the reverse of the one above:1. Smaller teams means that sometimes you cannot develop things in the depth you would like to because there is always something new cropping in.2. Smaller teams also means that sometimes there is nobody you can learn from (but in the big banks generally those you can learn from are very careful when spreading their knowledge, so no big difference there)3. Since you are an independent party your models need to reproduce the market prices generally coming from different banks done with models that are different and it can be a challenge to have a single model that can reproduce them all4. You generally get abuse from the brokers, from their traders and it happened to me a few times from the quants of the other banks as well. And a broker is supposed to show humility and listen and apologise even when abused.Saying that, I have friends working as quants in other IDB and their experience is not so good. I would suggest you to ask where the quant is in the organisation. If it is reporting to a desk directly then go for an interview and try to understand if the manager is competent and try to investigate a little bit on their systems. If the manager sounds like an imbecile or all they do is looking at a bloomberg terminal, it's probably best to run fast away.If the quant team is part of IT, I'd probably run as well....Good luck,gc

QuoteOriginally posted by: rockrocthanks, although it doesn't sound encouraging...but is this still considerred "front office" position, say after a couple years, is it generally easy or difficult to move on to a fund or a desk on banks? It can be slightly difficult, but so it is to move from a 2nd tier bank to a 1st tier bank (whatever that means these days). Saying that, both the person I replaced and myself ended up to two first tier banks when we decided to move on. It depends on what you manage to learn while you are there.Quote do they generally underpay their quants (I suspect this is the case)?From my experience moving to a bank, not necessarily (sig!)

QuoteI don't think there is good career progression for a good quant in a brokerage unless they head a deptAbsolutely true, and in fact it was the reason why I decided to leave after a few years thereQuoteand most quants tell me that they feel under appreciated.Yes, but then I think that most quants tend to feel quite frustrated after a few years in the industry, and even in banks that's the reason why they generally become traders...

thanks so much for your detailed reply! I hope everybody could learn something from your experience.

QuoteOriginally posted by: gcQuoteI don't think there is good career progression for a good quant in a brokerage unless they head a deptAbsolutely true, and in fact it was the reason why I decided to leave after a few years thereQuoteand most quants tell me that they feel under appreciated.Yes, but then I think that most quants tend to feel quite frustrated after a few years in the industry, and even in banks that's the reason why they generally become traders...Why didn't you try to be a broker? I hear that they are also well compensated, though I dont know the situation at ICAP