Careers in Quantitative Finance

When imaging a career in finance, a role as a trader or investment banker is often what comes to mind, thanks in large part to their popularity on TV Shows or in movies. What probably does not come to mind, is a role as a quantitative analyst (also known as a quant). Though quantitative analysts may have little to no role in the collective imagination, almost everyone else in finance, including the traders and investment bankers, base their decisions on the work done by quantitative analysts.

What is Quantitative Finance?

Quantitative analysts deal almost exclusively with the mathematical and statistical parts of finance. Quantitative analysts can be found throughout the finance industry, including in banks, investment management firms, hedge funds, accounting firms, and financial software companies. The exact job description of a quantitative analyst varies widely from position to position, but the underlying responsibility remains roughly the same – to create mathematical models about complicated financial systems to provide a better understanding of these systems. Those working in other areas of finance often base many of their decisions on the work done by quantitative analysts.

Quantitative Finance as a Steppingstone

There are two main types of careers in quantitative finance, the first of which is an entry-level position. Quantitative financial analysts in these positions are typically not looking to have a long-term career in quantitative finance. Instead, they are looking to gain experience that they can leverage to get other finance positions, such as one as an investment analyst. These entry-level analysts typically do not have highly specialized knowledge in the field. They almost always have an undergraduate degree, but it is often in a broader field, such as economics or finance. Some people may take one of these entry-level quantitative finance roles, go back to school afterward to earn a master’s and return to finance in a different career.

Long-Term Quantitative Finance Careers

The second type of quantitative finance career tends to be more specialized and for those with more desire to stay in quantitative finance long-term. That is not to say that careers in these positions cannot also lead to careers in other areas of finance, but the level of specialization required for these positions tend to only draw those who plan to stay on the career path for an extended period. These positions are ususally in the securities industry and require a high level of expertise in complex modeling skills.

Educational Requirements

The educational requirements for a career in quantitative analysis depend on the area you’re looking to go into. You’ll need a bachelor’s degree that relates to the field of quantitative finance. For those in entry-level positions, the type of applicable degree is fairly wide-ranging including physics, computer science, engineering, finance, economics, or statistics. For those interested in long-term quantitative finance careers, the educational requirements are considerably more rigorous. Quantitative analysts in these roles must spend years developing their skills. Positions will almost require at least a master’s, though, for more competitive positions, a doctorate is often required.

Required Skills

Many of the key skills required for a career in quantitative finance are the ones you would probably expect – database management, computer programming (the required programming language often depends on the position, though C++ is the most common), knowledge about a statistical analysis software package, and advanced Excel capabilities. Perhaps a bit less expected is the level of communication skills, both written and verbal, that is required to excel in a career in quantitative analysis. Quantitative analysts must be able to communicate their work to others, including all implications for both long-term and day to day decision making.

Quantitative Finance Salaries

According to Glassdoor, the average base pay for a quantitative finance analyst is $61,971. Though this a fine salary, compared to many other careers in finance, it is considerably less lucrative. But when looking at this number, it’s important to keep in mind that this is the average of all types of quantitative analysts, including the more entry-level positions. Those with the educational background and necessary experience can expect to make considerably more. Salaries of 250,000 or more are not uncommon.

Is a Career in Quantitative Finance Right for You?

Quantitative finance is a complex field that requires abstract thinking and an ability to handle pressure well, since your decisions may have far-reaching consequences. Though the work may be challenging, and the pay lucrative, this is not a career for everyone. Quantitative finance is a more narrowed specialty that requires spending a lot of time in front of a screen and many years gaining the necessary experience and educational background.

Related Courses

Quantitative Methods for Finance Professional Certificate

This hands-on certificate program develops the fundamental desk-ready skills essential for quantitative roles in finance, including trading, structuring, valuation, risk management, regulation, and financial engineering. Learn all the mathematical techniques, Excel tools, VBA programming skills and numerical methods that you need to succeed.

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About The New York Institute of Finance

 The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in-class, in over 120 countries.

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