Sales and Trading career overview
The sales & trading division (S&T) of an investment bank helps mutual funds, hedge funds, pension funds, etc. facilitate equities transactions (buy/sell). A career in sales & trading can be extremely strenuous with a very fast paced environment. The competition for positions is intense, compensation can be very high, and the work can be extremely stressful.
The personality of someone suited to work in the sales and trading division of an investment bank has the following character traits:
- Highly ambitious/driven to succeed
- Communicates effectively
- Incredibly personable
- Polished and presentable
- Can dissect large amounts of information quickly and relay it efficiently to clients
- Passionate about markets
Interview preparation for sales & trading jobs is different than other roles like investment banking. It is much more qualitative with candidates needing to have personality/soft skills (passion, drive, ambition, communication skills, etc.) than more so than a “book based knowledge” (as with, say, an investment banking job). In order to demonstrate these personality traits it’s important to be able to talk about personal investing, past experiences, and market specific topics.
The typical entry level on a S&T desk is an Associate type role. Candidates can then move on to Director/Vice President, Executive Director, Managing Director and Head positions (firms vary in their actual titles).
Associates are recruited from undergraduate programs at target schools, or other highly regarded universities. There is no timeline on how long one may stay in a position. Some may stick around at a firm for many, many, years while others may be “poached” by other firms (ex. big banks). The ability to generate increasing commission amounts and bring on new clients for the firm will dictate the above. The reality is some succeed, while others may fail.
Traders on the brokerage side at banks/dealers (the sell side) may a) stay the firm for years and years or b) go on to work on the client side (the buy side). However, many traders on the buy side may not have come from the sell side at all – some may have been on the client side for their entire careers, moving up into increasingly more important roles.
Below is a guideline of how much you can earn in sales and trading. It should be noted that there can be a wide range based on the bank, the year, and the city you’re working in.
Analyst: $100,000 to $150,000 (base salary plus bonus)
Vice President/Director: $150,000 to $250,000+ (base salary plus bonus)
There are licensing courses required to be a trader. In the U.S. these include the Series 7 and Series 63 exams and in Canada, they include the Canadian Securities Course (CSC), Conduct & Practices Handbook (CPH), and Traders Training Course (TTC).
Sales and trading is more of a “learning through doing” type job however, we recommend several books that are extremely useful for traders.
It also helps to have a solid understanding of finance and accounting.