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Management Consulting in Capital Markets

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Management Consulting in Capital Markets [#permalink] New post 16 Jul 2010, 12:10
Hello,

First of all, this forum is a major achievement and welldone to all the moderators.

I have a few questions on Management consulting jobs specific to Capital Markets. I have read a few of Rhyme's excellent posts, which talks about consulting in general. I'll continue to search through the forums for more.

Let me first give you some background, which will probably help you answer my questions more effectively. I have been building applications in capital markets front office technology for the past 5 years and am now considering moving into a role(maybe after an MBA), where I can help financial institutions find effective solutions for their day to day business problems. I do this from the technology aspect of things everyday. But I would like to shift gears and work on the other side of the equation where I can be involved in the analysis and strategy phases of a business plan, rather than in the technology implementation phase. Example plans can be: How can we tap the islamic banking client market in the middle East? Should our business consider trading in Multilateral trading venues? How can we better manage the credit risk of our clients?..You get the idea...

In terms of other closely related front office roles, I don't want to move into a sales and trading role nor do I want to become a quant. The risk side of things is unavoidable in any banking related role, but I don't particularly fancy becoming a risk manager, monitoring/reviewing/controlling the risk numbers for a trading desk. Instead, what I really would like to do in the long term is, to become a business development manager in a bank (or any financial institution really), where I can introduce revenue generation ideas, manage various development streams and work on long term strategy roadmaps for the business.

From my very limited knowledge in mgmt consulting, it sounds like consulting might be a great way for me to achieve this somewhat vague dream role. I reckon, the multitude of projects I'll be involved in, with a variety of institutions, will give me an excellent exposure to all aspects of the industry and set a perfect foundation for me to specialise into a particular area afterwards.

My b/g has turned out to be very long, but I'm hoping a lot of you will be able to relate to my thought process and contribute further. As for my questions, I'm looking to understand the below:

a) Is management consulting in capital markets a good route to becoming a business development/strategy manager? Is that a common career path?

b) Can you give a few use-cases of typical problems that are solved my managment consultants in the capital markets space?

c) Do banks and others really consult the Mckinseys and Booz&Cos to solve their problems and help build strategy? Won't that give away too much of their secret sauce?

Thanks for your time
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Re: Management Consulting in Capital Markets [#permalink] New post 19 Jul 2010, 11:12
a) I am not sure there is a common path for what you are looking to do. Many people I have met in those positions have worked in customer facing roles for organizations for years - front line experience is valued. There may be more consultants moving across than I know of, though I typically think their skills in analysis are appreciated more on the buy side.

b) It can be anything really. Working on restructurings has been big business for the past few years. Real pointless / big picture items such as "where should we place ourselves to be at the top of the game in ten years" which is akin to asking for a perpetual motion machine.

In focus on risk a lot of work can be done on CDOs, derivatives, funding - many people have problems in these areas and need field experts to assist.

I am sure some of the big houses get involved in brand consulting as well. Thankfully I am well away from that world.

c) Not sure about Booz. McKinsey and Bain pop up frequently on the circuit. McK has its own risk practice which helps its sell (not sure how good they are from a client perspective). Firms are pretty open with consultants; they have a very solid confidentiality and non-disclosure agreement.

There are plenty of more non-core consulting firms that work the financial markets. Looking at the MBB could be at your peril, as they are a framework provider and finance doesn't always lend itself to that. Plenty of boutiques do a lot of business, but you would have to seek them out as they don't have standard processes.
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Re: Management Consulting in Capital Markets [#permalink] New post 21 Jul 2010, 11:14
Thanks 3_ for your reply. Very useful answers.

I do think the role of business development manager in a bank is quite different from the one in , lets say, a product company, where its more of a glorified sales/marketing role. Yes, the role does require meeting a lot of clients, but in a bank, I would say, its mostly internal clients. While the trading desk heads are busy generating revenue, schmoozing clients and hedging out their risks, the bus manager brings to the table ideas from the industry and uses technology to bring it to fruition.

Regardless, I think i am beginning to understand the consultancy role a lot better now.

Thanks again.
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Re: Management Consulting in Capital Markets [#permalink] New post 22 Jul 2010, 05:59
For that kind of role I am not so certain that there is much involvement with external parties for the development of ideas. Consultants work on the higher level (where the firm should position itself) or in the clearer problem solving, or sometimes - for the foolhardy - implementation.

I have a pretty big study on risk and securities based consulting firms that provides a resource for the active firms. Let me know (PM) if you want me to share.

I am not going to attach it on here as it is relatively propreitary research for work purposes, but I can edit it so that it is available.
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Re: Management Consulting in Capital Markets   [#permalink] 22 Jul 2010, 05:59
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