“You must choose… but choose wisely.” The Career Path of a Financial Engineer

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The Career Path of a Financial Engineer

Between our various roles on Wall Street and even at Enstruct, we’ve seen a lot of financial engineers’ resumes, tested them, trained them, and watched careers evolve.  However, like math itself, the career path of a financial engineer can either be extremely linear or completely random.  Here are a few career paths that we’ve seen over the years:

  1. Uber Quant:  this is the impassioned financial engineer who lives and breathes problems, formulas, solutions, and highly complex work.  Interestingly, we’ve found many of this type have physics degrees from their undergraduate education.  They tend to move towards high frequency trading roles or algorithmic investment strategies. 
  2. Development Quants:  this group tends to have more of a computer science background and ends up at financial institutions or consulting companies.  They work in teams and are responsible for building the backbone of enterprises.  Essential for in-house, custom development and knowing a company’s specific needs, their value lies in the ability to adapt non-quant needs.
  3. Theoretical Quants:  when it comes to derivatives, swaps, or options, these are the people you turn to.  We use the term “theoretical” in the sense that they create products that are completely intangible, but add value.  The work definitely draws on mathematical training and is good for those strong in calculus and linear algebra.
  4. Real Quants:  readers should not take this the wrong way, if they don’t fit into this category.  These are the opposite of theoretical quants in that they work with real assets.  This group is often shocked that most of what they learned during their financial engineering master’s program does not apply and they need to quickly refresh their large data management and statistics understanding.  The challenge here is that once an asset becomes a specialty they can branch off into one field and may leave financial engineering altogether.

Regardless of career path, there is one common experience that most financial engineers/quants will have to navigate:  accelerating their career through non-quant managers.  This can frequently occur and can stall a quant’s career.  Some non-quant managers do not appreciate the complexity of the work, while others are threatened by the knowledge.  Either way, most quants will run into this during their career and have to understand their value, be confident in their approach, and diplomatic in their demeanor.