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Investment- Front, Middle, and Back Office
Most companies on the sell side organize their work in the same way. Things are put into groups based on whether they happen in the front office, the middle office, or the back office.
Front Office
The front office is where actions that directly bring in money from customers take place. The most important front-office tasks are done by the sales, marketing, and customer service groups.
Some professionals think of the trading area as being in the front office, especially if the traders deal with clients all the time. Some people think of research as a front-office task because it brings in money from clients.
Middle Office
The main tasks of the business are done in the middle office. Risk management, research, corporate finance, portfolio management, and information technology (IT) are all middle-office tasks, especially if these areas don't deal directly with clients.
IT is especially important for investment firms because they need to quickly and correctly process and retrieve huge amounts of data. Risk management is also important because it makes sure that the company and its clients are not put at too much risk on purpose, by accident, or through scams.
Back Office
The management and support tasks needed to run the business are located in the back office. Some of these tasks are operations, payroll, human resources, and accounting.
When it comes to trading firms and banks that hold money for people, the accounting department is very important because it clears and settles trades and keeps track of what people own.
There are some tasks that are hard to put in the front, middle, or back office. Compliance, for example, is important to the whole organization because it makes sure that the company and its clients follow the rules and laws that guide the investment business.
Many times, the words "front office," "middle office," and "back office" are not used to talk about buy-side firms. Though, the main parts of buy-side and sell-side investment management firms are the same. Some of these areas are trading, compliance, accounting, administration, sales and client relations, investment research and portfolio management, and trading.
Most companies on the sell side organize their work in the same way. Things are put into groups based on whether they happen in the front office, the middle office, or the back office.
Front Office
The front office is where actions that directly bring in money from customers take place. The most important front-office tasks are done by the sales, marketing, and customer service groups.
Some professionals think of the trading area as being in the front office, especially if the traders deal with clients all the time. Some people think of research as a front-office task because it brings in money from clients.
Middle Office
The main tasks of the business are done in the middle office. Risk management, research, corporate finance, portfolio management, and information technology (IT) are all middle-office tasks, especially if these areas don't deal directly with clients.
IT is especially important for investment firms because they need to quickly and correctly process and retrieve huge amounts of data. Risk management is also important because it makes sure that the company and its clients are not put at too much risk on purpose, by accident, or through scams.
Back Office
The management and support tasks needed to run the business are located in the back office. Some of these tasks are operations, payroll, human resources, and accounting.
When it comes to trading firms and banks that hold money for people, the accounting department is very important because it clears and settles trades and keeps track of what people own.
There are some tasks that are hard to put in the front, middle, or back office. Compliance, for example, is important to the whole organization because it makes sure that the company and its clients follow the rules and laws that guide the investment business.
Many times, the words "front office," "middle office," and "back office" are not used to talk about buy-side firms. Though, the main parts of buy-side and sell-side investment management firms are the same. Some of these areas are trading, compliance, accounting, administration, sales and client relations, investment research and portfolio management, and trading.
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