Careers: In the City

July 17, 1998

Pack up your PhD and head for the City where the computer screens are painted in pound signs for the ambitious researcher, says Natasha Loder

GETTING a PhD is not the obvious route towards making a million. But most jobs that pay well seem to fail to satisfy the research instinct. So is it possible to find a job that will stretch the mind and stuff the wallet?

A job in the City can fit the bill. The rapidly-changing financial world has a voracious appetite for the talents of bright PhD graduates, postdocs and even established academics from a variety of disciplines. Financial houses are looking to increase their strength by employing big brains to do cutting-edge analysis, research and information technology in the increasingly complex world of finance and investment.

When people mention a career in the City the typical response is "Oh well, I suppose it pays well," say Chris Attfield and Mark Thomas from First Chicago NBD in London. But there is more to it than money, there are some huge intellectual challenges. Jessica James, their manager in the strategic risk management advisory group, explains: "It's like physics was 100 years ago, there's still loads of exciting stuff left. Young people who have a good eye for what is going on can do very well indeed. Our own little research group has made some remarkable discoveries, and that is tremendously exciting."

Thomas and James are both PhDs. PhD graduates can end up researching trading strategies, doing risk management, pricing deals, characterising the market, developing new techniques to help clients choose deals, and developing computer systems for modelling or creating software products. Most come from science backgrounds, especially mathematics and physics. But the key skill is the raw brain power to deal with the maths, and even PhDs in non-mathematical topics such as history and philosophy have gone into the City. Computer modelling, statistics and IT skills are also highly sought after.

"To my surprise, my analysing and organisational skills seemed very applicable, it was an ideal use of all the things I enjoyed most," says Attfield, who trained as a chemist.

He finds working on closed projects especially rewarding.

The other talents needed are pretty much the standard fare of a PhD graduate. "A research training is invaluable," says James. "If I hire a PhD from a good university I know I'll be able to say 'here's a problem, here are the papers and here are the people you need to talk to'. They may not know what a swap is but by the end of the week they'll tell me what I am doing wrong with it ... they have the brains, the research ability, and the self-reliance to go for any problem like a dog with a bone".

Salaries are extremely variable between banks and between individuals. But people who do well are rewarded. After five years - if you do well - a quantitative analyst can expect a basic of Pounds 85,000, plus a bonus of about the same size. Traders can earn much more than this, but the job does not require a PhD.

The work is fast-paced, with long hours and plenty of deadlines, so it is not a job for the fainthearted. "It does matter more than in academia ... you price it wrong and you could lose your job," says Thomas. Not every PhD graduate is suitable for a City job: they need to be personable, sociable, presentable and a good team worker.

Burn-out is also common, although traders suffer more than quantative analysts. And, although there have been attempts at reform, there is sexism (and racism) in the City. One recruitment adviser who requested anonymity says: "There's often a salary gap between equally qualified and experienced men and women which is clearly unacceptable." But there are also very good equal opportunities employers, such as JP Morgan, Goldman Sachs and First Chicago NBD.

As for earning Pounds 1 million, one PhD graduate who started out as a quant is reputed to be earning this after only seven years. How come? Because he is very, very clever. But these amounts are rare. The only thing you know for sure in the City is that nothing is certain.

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