Quantitative Analysis Career Outlook

October 5th, 2014

So, do you want to be a quant?

That’s the common nickname for a quantitative analyst. And while it may sound silly, the responsibilities and importance of quants in today’s career marketplace are anything but. They’re among the most in-demand and handsomely compensated professionals – and their jobs are far from easy, yet highly challenging and rewarding.

Quants work with traders, risk managers and software engineers to develop optimal strategies for trading capital markets products (equities and fixed income and their derivatives). They develop models, write programs, conduct research, perform statistical analyses and solve problems in order to optimize trading strategies and minimize. It’s no wonder they’re also known as the rocket scientists of Wall Street.

The Right Stuff

Becoming a quantitative analyst requires both the intellectual ability to master complex mathematical domains and a willingness to tackle challenges that may seem insurmountable, all under considerable pressure. But the payoff is equally impressive.

  • Many firms have just a few openings for quants and the process is highly competitive. Financial rewards depend on the level and quality of education, as well as related experience.  Projected total employment for quantitative analysts is predicted to be 160,000 in the United States by 2018, up from about 125,000 in 2004.
  • Compensation in the finance field is high. It’s not uncommon to find quant positions with posted salaries of $250,000 or more in leading markets such as New York, Boston, Florida and Texas. As with most careers, the key to landing the highest-paying jobs is a resume filled with experience, including well-known employers, and reliance on recruiting firms and professional networking for the best opportunities.

How to Become a Quant

Quantitative finance was born in the 1970’s when investors began using mathematics to calculate equity and fixed income prices. Today, a key branch of math for would-be quants to master is stochastic calculus. In addition, quants need a strong understanding of spreadsheets, especially VBA, along with a good working knowledge of C++ and MATLAB.

  • Mathematicians with personality are in short supply. If you love math and finance and are willing to head to graduate school, a shift into a quant career could be a good fit for you. An increasing number of universities now offer degrees that include Master of Financial Engineering and Master of Quantitative Finance.
  • Investment banking is extremely competitive. If you envision a career in this arena, the quality of your education and training is particularly critical. Once you break in at entry level, growth potential is excellent, as long as you have strong business communication skills that enable you to not only do analytic work, but also explain it and make it comfortable for laymen to deal with.

Types of Analysts

Quantitative analysts design and implement models that allow financial firms to price and trade securities. They’re employed primarily by investment banks and hedge funds, but also by commercial banks, insurance companies and management consultancies, as well as software and information providers.

  • Front office quants work in sales and trading with their day-to-day routine centered on managing risk and determining pricing.
  • In the back office, quants validate models, conduct research and create new business strategies. These roles are less demanding than those in the front office and as such, compensation tends to be somewhat lower.

A niche recruiting firm can be an invaluable asset as you pursue a career in a field as specialized as quantitative analysis. Read our related posts or contact one of our career coaches at Select Group, Inc., to learn more.

 

 

 

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