The glass ceiling is still quite high, though.

Perception of any given field (including quant finance) as a meritocracy is proportional to one's success and inversely proportional to experience

QuoteOriginally posted by: qqqqqQuoteOriginally posted by: neuroguyQuoteAs for salaries, there are no fundamental reasons that quants should make more money than other math/physics PhDs who can program. The only reason is being "close to the money", which is just a traditional "compensation inefficiency" which will probably disappear with more regulation and less risk-taking. I'm not sure I totally agree with that. One argument why quants have high salaries is that as already identified, many of them really are very smart and well qualified. Being smart they have many interests. Furthermore, many have come from 'romantic' areas of endeavour, i.e. scientific research, where the culture is one of intellectual freedom. However these people are harnessed to a computer making financial calculations/software/'whatever', with high stress, long hours and often within a corporate culture with all that entails. For these people to do that there has to be additional compensation, otherwise they wouldn't choose to do it (for the most part). In contrast an equivalently qualified person in academia will tend to be paid less because they are compensated by the work itself and the more relaxed work culture. I was comparing quants to other PhDs who work in industry, not in academia. Most of them are also "harnessed to a computer". An "equivalently qualified person" might not get a job in academia at all.The problem with your argument is that supply of people going into quant finance has been going up despite compensation decreasing. This means that there will be enough smart people to fill positions even with lower salaries.I think that only partially refutes what I was saying, although I do admit that I initially misunderstood your post.So rather than comparing to Academia, lets compare to Google. Similarly it is seen as a 'cool' place to work. They have big colourful furniture and ironic interior decoration. They claim to give their employees a degree of intellectual freedom. You can wear flip flops to work. People dont scowl when you tell them you work there. Personally many of those things dont count for me. But for many people they do. Especially the social acceptability element. The point about your supply and demand argument is that many of those qualified, well educated people will not work in finance for a lower wage if they can do something else for the same or better money and with added intangible benefits. They are not necessarily forced into the 'quant' pool.

QuoteOriginally posted by: frenchXJust a quick question: how wide is the compensation gap between a trader and a quant ? I suspect it to be pretty big right ?Because at the MFE of my school, the best tercile ends up as traders and not quants.In France the precise ranking of candidates in a grande école graduating class seems to be given a weight and influence in future life not seen since the heyday of the Chinese Civil Service examinations. Luckily eunuchs are no longer required.

QuoteThe point about your supply and demand argument is that many of those qualified, well educated people will not work in finance for a lower wage if they can do something else for the same or better money and with added intangible benefits. They are not necessarily forced into the 'quant' pool.This is true for people entering the field. Not true for people already into it for several years. I have noticed that finance is closed both ways for experienced professionals. People from outside have a hard time getting in and people from inside have a hard time getting out. This is true even in IT which is absurd. The problem is much more aggravated outside IT. The other bias people inside finance struggle with is their notion that finance pays substantially higher than other quant areas. This is no longer true. If you have the right Quant/IT skills you can make a killing today outside of finance. If you know Big Data IT skills you can still make a killing. But folks inside of Finance cannot imagine a life which is outside of finance.So while I agree with you in principle, I think in practice there is a huge inertia which leaves people stuck.

Former quant-dev who got fed up with being project managed and banned from writing code in OO languages for fear of making some other project look bad, now working outside banking in a technical role. Money almost the same. Much shorter hours. No need to be in at 7:30 each morning. Much more freedom. Much less risk of being sued personally for billions for anything blowing up (I'm a contractor). Oh yeah, and I get to learn new stuff rather than acting like a glorified code monkey. Spent the last few weeks working on NLP, and expect to spend the next month or so working with something NoSQL-like. Boss used to be an options trader. Banking is not about to undergo a major growth in revenues - likely to be tied to GDP growth. Typical reason for an economy growing is R&D or improvement in technologies used by society. Anyone who is a quant right now can with a bit of b*llsh*t almost certainly find a paper-pushing role in a large bank - but what happens in 5 years time when you want to do something else and an interviewer wonders what skills you have ?Show me a reason to stay in a bank....

This is true, for anyone who cares about the "craft", IT in banks can be soul-destroying. I remember a Big Boss who wanted to "keep the code mean and lean" and therefore pushed for the quants to stop using Boost in their C++ library. "It's so many files to check out".

QuoteOriginally posted by: neuroguyI think that only partially refutes what I was saying, although I do admit that I initially misunderstood your post.So rather than comparing to Academia, lets compare to Google. Similarly it is seen as a 'cool' place to work. They have big colourful furniture and ironic interior decoration. They claim to give their employees a degree of intellectual freedom. You can wear flip flops to work. People dont scowl when you tell them you work there. Personally many of those things dont count for me. But for many people they do. Especially the social acceptability element. The point about your supply and demand argument is that many of those qualified, well educated people will not work in finance for a lower wage if they can do something else for the same or better money and with added intangible benefits. They are not necessarily forced into the 'quant' pool.You are right that Google is a great place to work, at least my friends who work there are happy. Though no one wears flip flops to work in NYC, even if you work at Google ). I am less sure about the intellectual freedom part. Google is actually very secretive and most people are not allowed to speak in detail about their work projects. You are not really allowed to choose projects you work on there, except the 20% personal project time.Also, people in NYC rarely scowl if you tell them you work in finance. If you are ashamed of working in a bank its another story )Basically, I agree with capafan in that inertia is preventing people from leaving quant finance. Those who are staying still hope to make lots of money, extrapolating the boom years to years ahead. Those who want to leave are finding it is harder than they thought it would be.And the fresh graduates who are coming don't know much about the situation.

Inability to move out of Finance industry for experienced IT people is also due to commitments (schooling for children/spouse's career field/home) that develop over a period of time. As hubs for tech and Finance industries do not intersect it's not easy to switch unless one is open to moving. But I'd seen people try various tech stuff while being in NYC and these are the ones who are discernibly more free spirited in their outlook on life. And the remaining others who are experienced in trading/ibd/structuring/finance they are essentially not an easy fit for other industry as they have very little transferable skills. Social acceptability should not be a deal breaker unless someone has a direct relation to one of the scandals. Every industry has its side effects on the society at some scale or the other. I am fairly new to this industry and for now I am riding on the spirit shown by some of the senior people I see around me. They might either be internally wounded or made a killing in their careers but they are passionate about their work and that's an encouraging sight for now.

"If you have the right Quant/IT skills you can make a killing today outside of finance. If you know Big Data IT skills you can still make a killing."Would love if you could elaborate more on these "IT skills" and their applications in problem space/companies where one can earn well.

QuoteOriginally posted by: jointyInability to move out of Finance industry for experienced IT people is also due to commitments (schooling for children/spouse's career field/home) that develop over a period of time.They're not really commitments, just things people don't want to give up.

QuoteOriginally posted by: katastrofaThey're not really commitments, just things people don't want to give up.Yes, too many people confusing wants with needs.

As an alternative to QF/FE for quant devs, there is money to be made in web development/tech consulting industry, especially on the startup side. There is substantial demand now for Ruby/Python developers, often with lucrative equity options packages. One can estimate the expected return of such "bonuses" compared to Wall St/City comp.

The problem is that too often non-financial companies really have a bias against "banksters". There is a social stigma attached to working in the City or on Wall Street.

QuoteOriginally posted by: katastrofaThe problem is that too often non-financial companies really have a bias against "banksters". There is a social stigma attached to working in the City or on Wall Street.I haven't found this to be true personally, but I can certainly imagine that there may be a stigma. Have you seen this happen often?How about any stigma associated with technical skills? Hedge fund developers (and to some extent IB-ers) are often poached by startups, so they seem to care less!