I recently stumbled over an overview that showed that the big-4, at least some of them, have teams dedicated to option pricing (E&Y call is its derivatives valuation center). Does anybody know what they are exactly doing there. Is it a support role for their audit teams where they just approve valuation methods used by their cleints or do they actually have some advisoy function and some serious expertise in valuation. Considering the IT/Quant infrastructure larger banks have, I wonder how theses guys can add any value.Cheers

Although the accountancy firms say they do advisory work, I see little evidence of this, except as you say stuff that is in effect audit, regulation and compliance.It is possible though that they do advisory for smaller asset managers or pension funds.The problems with them adding value are partly banks structure, but more directly their own setup.A quant going to work at an accounting firm is a bit like an atheist going to work for a major church.They will rarely be so rude as to insult you, but you will never be one of the in-crowd. This expresses itself subtly in terms of position in the firm, and overtly by the surprisingly small pay.The difference between quant work and IT, is that banks you can't sell quants skills to people who are quants unless you really have the ability.Selling IT consultancy is easier because the individuals who award major IT service contracts not only do not see all IT people as a commodity of uniform quality, they actively dislike them.Almost by definition major IT project suppliers are not chosen be the people who will use the system, if it ever arrives.That's why the Big4 have so much IT work, but very little quant work.They will however get more since the % of banking that is complaince and audit is expected to increase.(and no this is not bitterness at PWC for making me use the black people's entrance to their building)

When did PWC have different entrances for their staff, and why would they send you through that entrance?

DCFCI think there is a ghastly typo in the last sentence of your post

QuoteOriginally posted by: phil451DCFCI think there is a ghastly typo in the last sentence of your postYes DCFC, you have lost a lot of credibility with that statement. Care to retract, or is this Dino going to bite again?

racist and very narrow minded

I agree with phil451....obviously, it's a very unfortunate typo

I could say a lot but one thing in my opinion is that Dominic did not mean it in the way you interpreted it. There are probably other ways to interpret this, especially if you are familiar with his direct writing style. But point taken.

Thinking about this and DCFCs statements in generalMy feeling is that DCFC was making a comment on PWCs employment practices rather than any typo or directly racist comments.

QuoteOriginally posted by: DominicConnorand no this is not bitterness at PWC for making me use the black people's entrance to their buildingClassicI spend some time, too much time, at one of these firms in a team thats used these quant groups. They are all crap sad quants that faff around and get nothing useful done, much like most other people at these firms. Join one of these groups and you will never do anything inventive again, morso you will spend your time wanting to slit your wrists

QuoteOriginally posted by: phil451DCFCI think there is a ghastly typo in the last sentence of your postpuzzled

Phil451 is right, at PWC I was called a "leftie", part of the evidence for this apparently that I read The Economist...So there is no typo, and I fear that some people are too eager to spot racism when in fact I was being negative about racism.When I did time at their London office, I discovered there were two entrances.One is expensive and impressive in a mock-80s sort of way. I wasn't allowed to use that.I was required to use another which smelled, badly. Partly because the lift was used to ship food waste from the canteen.After a few trips I noticed that I was the only white person in the queue to sign in, and that unlike most groups of people that work in the City my team was wholly white, as was everyone I met with a real job. The IT people were also mostly coloured, and since I was there to do clever stuff with C++, that put me amongst them. I of course did not have a "real" job.I didn't complain, and instead scrupulously polite to the (mostly black) security people who seeing my nice suit, serious briefcase, and sun starved skin suggested that I could make a fuss and get in the white people's entrance. My team it thought it odd that each morning I stepped out of a lift that smelled like a blocked sink, but there was no fucking way that I was going to be "offended". Only weak and/or stupid people claim "offence". Hence my voice shifted a step nearer to Hugh Grant, I took care only to wear my nicest suits, and it was at this time that I adopted the habit of wearing shirts made by Thomas Pink, just so I could enjoy the morning queue experience whilst I waited to sign in.I did occasionally refer to it as the "black people's'" entrance, which was not strictly accurate since PWC managed to avoid having many, and it actually was a mix of other non-whites. Eventually I was "promoted" to a level where I went in with the other white people, but I will confess that I felt disappointed when that happened.Of course it could just have been a monstrous coincidence at PWC that skin colour "just happened" to be such a good predictor of status.

London is a weird place

I actually happened to work in exactly this kind of position in one of the big Eastern European capitals. I liked it. At that time the quant team affiliated with EY was probably the only place to do this kind of job in the city. The pay was indeed not high compared to what you could do in investment banks, but the experience and work-life balance were great. I did not feel a 'black' person among white-collar auditors because we cooperated with them in many joint projects (doing the better part of job). Most of the time we developed our own models for pricing (in projects we did independtly from auditors) and only took those of our clients when it was connected to regulation and risk management issues. One important thing is that quants working for the Big 4 are not 100% engaged in traditional quant activities. Programming part is less substantial, and often you find yourself doing some consulting - either in risk management or in regulation (Basel II).