Physics/Math(s) in the UK - finance?

[Gregg]

I am reading Physics and Mathematics at a top UK university. I would like to eventually have a job in quantitative finance. Reading the forums I have learned that it is conventional for applicants to be at least an MSc and are usually physics Phds. This is good, but I do not wish to take education any further after I finish my BSc.

I would like to know, as a penultimate year student, what I should be doing exactly to ensure I have the best chances (if any) of getting into an area like this. Internships for things like software development in finance that aren't specifically for computer science undergraduates have been difficult for me to find.

Any answers or direction would be much appreciated!

 

[Studiot]

You should be chatting up stockbrokers, bankers and other City types.

I know of at least one success story in recent years following this route without postgraduate qualifications.

go well

 

[Gregg]

Thanks for the reply!

Do you mean ask them for advice or try to get my foot in the door?

 

[dav1d]

Not really you need math / business if you want to work on wall street. but that's USA.

 

[Studiot]

Get your eloquent foot in door of course.

Anyone with a degree in the UK system and wanting to work should be aiming for membership of one of the Chartered Instutes as a next step.

Your Physics/maths degree will go towards this with say CIPFA (Chartered Instiutute of Public Finanace or one of the Accountancy Institutes or the CIOM)

Tell prospective employers this is where you are heading.

 

[Gregg]

OK, great. Is it up to me from now to try my hardest to

1) "know a market"
2) know how to program professionally
3) become fluent in methods that aren't necessarily going to be taught to undergrads.
- SDEs
- ... What else?

 

[Gregg]

What will membership of one of the Chartered Instutes do in the direction of working in quantitative finance at an investment bank? I'd like to leave university and start a job which could develop into a quantitative finance role in the future. Perhaps this would be in the technology division?

As for the success story in recent years could you please describe it? Sorry to bump an old post.

 

[twofish-quant]

I'd like to leave university and start a job which could develop into a quantitative finance role in the future. Perhaps this would be in the technology division?

This is a difficult problem because almost everyone that I know in investment banking in a non-clerical role has at least a masters degree in something.

In the US, there are jobs for physics bachelors in management consulting, but usually that involves going through career services

Internships for things like software development in finance that aren't specifically for computer science undergraduates have been difficult for me to find.

If you can convince people that you can program, no one will care what your major is.

Also, it's paradoxical but in the US, some firms will prefer programmers with zero-finance experience, so in that situation, you can get a job at Google or Microsoft, work for a few years and once you have a decent resume as a programmer then move to Wall Street.

 

[twofish-quant]

3) become fluent in methods that aren't necessarily going to be taught to undergrads.
- SDEs

Stochastic differential equations aren't terribly important now. What you really should focus on is hard core probability and statistics (i.e. sigma algebras, Bayesian estimation). One other way in is to get a track record working in some field that is heavily statistics based (bio-tech).

Also talk with alumni.

I should point out that you are making things ten times more difficult for yourself by trying to do this with a bachelors degree. Any particular reason that you don't want a Ph.D.

 

[Gregg]

This is a difficult problem because almost everyone that I know in investment banking in a non-clerical role has at least a masters degree in something.

In the US, there are jobs for physics bachelors in management consulting, but usually that involves going through career services

If you can convince people that you can program, no one will care what your major is.

Also, it's paradoxical but in the US, some firms will prefer programmers with zero-finance experience, so in that situation, you can get a job at Google or Microsoft, work for a few years and once you have a decent resume as a programmer then move to Wall Street.

I am able to get a position in an investment bank in the technology division without a masters. This would involve programming. Would working in this capacity be sufficient for a transfer at a later time?

Stochastic differential equations aren't terribly important now. What you really should focus on is hard core probability and statistics (i.e. sigma algebras, Bayesian estimation). One other way in is to get a track record working in some field that is heavily statistics based (bio-tech).

Also talk with alumni.

I should point out that you are making things ten times more difficult for yourself by trying to do this with a bachelors degree. Any particular reason that you don't want a Ph.D.

It's a difficult situation because I'm already at the age where I could be finishing my PhD but I am in the position where I am just finishing bachelors. The idea of a masters then a PhD is not appealing because it would mean that I would be in education for another 4 years, I'd like to start working. My ideal situation would be to start a job that would lead to a transfer, I'd rather not go into this area if I had to have a PhD in all honesty.

From what you have said it does seem that it is generally not the done thing at least in the US. But I don't see why not, if you can program and you know the mathematics I don't understand why you can't do it.

As for the maths, is it graduate level or the level a graduate/PhD physicist would need? Would undergraduate level probability, PDEs, financial -mathematics be insufficient?

 

[Studiot]

What will membership of one of the Chartered Instutes do in the direction of working in quantitative finance at an investment bank?

Have you asked them?
One of the characteristics of operation at professional level is self motivation/direction.

In general in the UK career system the standards are set by the professional institutions. these are mostly non governmental, non state, regulatory bodies governed by the professionals themselves.

Most have a similar structure and offer exams of their own. Most are divided into

Part 1
Part 2
Part 3


Institutions tabulate all sorts of academic qualifications both UK and foreign that allow joining members exemption from one or more parts.

Mostly part 1 exemptions would be polytechnic diplomas and the like (unlike Europe polytechnics are ranked below universities).

A suitable batchelor's or master's degree would normally exempt part 2

There is no exemption from part 3 which is a demonstration by the candidate of evidence of practicing the profession in a professional way. It normally comprises a submision by the candidate of a substantial piece of work by the candidate himself and a professional interview by the institutution. New graduates follow a path of couple of years 'training under agreement' by the candidate where their employer provides the necessary development to turn a graduate into a full professional. The substantial piece of work is normally drawn from this time. It is obviously in the interests of an employer to help his employee succeed at the professional interview.
Many instutions also have a 'mature entry route' whereby whereby exemptions to parts 1 and perhaps 2 are granted to individuals who can show they have been successfully working at professional level for some time (years), regardless of formal academic qualifications. Mature candidates still have to provide a report on a substantial piece of work and pass the interview.

 

[Gregg]

Is there an institute quant analysts? The ones which I have been able to find all relate to accountancy and as far as I know they are very different.

 

[Studiot]

Well have you tried google?

inputting "institute of bankers" gets lots.

Please note you have to show self direction at this level.
All the PhDs in the world won't substitute.

go well

 

[Gregg]

Well have you tried google?

inputting "institute of bankers" gets lots.

Please note you have to show self direction at this level.
All the PhDs in the world won't substitute.

go well

Thanks for your reply

I'm quite happy that I can show self direction the point is that I am currently penultimate year and I am weighing up what to do. I'd like a quant job in the future but I am pretty sure I do not want to remain in education.

From what I understand you are saying that I could possibly work for a company under some agreement, whilst completing a course at an institute and then I would be on, correct?

 

[Studiot]

There is no formal course for part 3.
It relates to the professional work you are actually doing (and being paid for)
However your employer and/or the Institution provides a professional 'mentor' (who is a more senior member).
Until you have completed part 3 there will be a limit or ceiling to the type and value of any work you are allowed to take responsibility for.

 

[twofish-quant]

I am able to get a position in an investment bank in the technology division without a masters.

It's possible but a lot harder. The trouble is that when the HR or the HH gets the resumes, the first thing that they do is to filter by degree.

The idea of a masters then a PhD is not appealing because it would mean that I would be in education for another 4 years, I'd like to start working.

Something that you should know is that IB's typically count the time that you have in graduate school as work experience. If you get a job with a bachelors degree, then you start out as an analyst. If you get a job with a Ph.D. you start out as an associate.

The other thing to know is that the work environment in quantitative finance is a lot like graduate school.

I'd rather not go into this area if I had to have a PhD in all honesty.

It's going to be difficult. Not impossible since I know of some people that have done it, but difficult. The people that I know that got in with a bachelors did so through campus recruiting.

From what you have said it does seem that it is generally not the done thing at least in the US. But I don't see why not, if you can program and you know the mathematics I don't understand why you can't do it.

The reason for this is that quantitative finance positions are usually research positions. It's unlikely that you know the mathematics because *no one* knows the mathematics and people are trying to figure it out. Just to give you an example. In any standard quantitative finance textbook, you'll find the Black-Scholes formula and it will have something called the "risk-free" rate. The problem with that formula is that it's now obvious that any sort of borrowing has risk.

So the textbooks are wrong, and wrong in a big, big way. Now what?

As for the maths, is it graduate level or the level a graduate/PhD physicist would need? Would undergraduate level probability, PDEs, financial -mathematics be insufficient?

It's not so much the level of math as the culture. For example, that problem that I was talking about. I'm not sure which type of maths is necessary to solve the problem, and the boss doesn't know or doesn't care either. One reason people like hiring Ph.d.'s for this sort of thing is not for what you know, but for what you can learn quickly.

 

[Gregg]

It's possible but a lot harder. The trouble is that when the HR or the HH gets the resumes, the first thing that they do is to filter by degree.
...
It's going to be difficult. Not impossible since I know of some people that have done it, but difficult. The people that I know that got in with a bachelors did so through campus recruiting.

How does this change if you are already an analyst?

 

[twofish-quant]

How does this change if you are already an analyst?

The terminology is a bit confusing.

In investment banks, you have titles which are basically like military rank. A typical bank has as rank

analyst
associate
vice-president
senior vice-president
managing director

These may have nothing to do with your job duties. It's like the difference between being a "captain of a ship" and "captain so-and-so"

Typically people with bachelors and MBA's start at a rank of analyst, whereas people with Ph.D.'s start at the rank of an associate. If you've already worked as an analyst, then the degree doesn't matter. What they will look at is what your current rank is.

 

[lepton33]

Is this the typical track for a quant in an investment bank, or do they follow a separate track?