If you want to be in bond sales, brush up on your people and negotiating skills as well as your math.
What does a bond salesperson do?
A bond salesman’s primary responsibility is to facilitate trades between institutional investors and the bond traders within his or her own firm. Sales people are the relationship managers for their firm’s bond investors. They are evaluated by how much business they do with these clients and how profitable that business is.
The hardest part of the salesperson’s job is that he or she won’t always know what a client wants to do — at times it can even be hard to determine what they are actually doing. Even if you know what your clients are after, and you convince them to show their business to you and your firm, you will still need to get your own firm’s trader to show prices that will work for your client. Your trader must then be able to make money from that trade by selling it at better price than what he paid for it.
There are no commission on trades on the bond market, because it is an over the counter market. Unlike the equity market, where there is a standard commission rate added on to the trade (credited to the sales person and paid by investors) there is no additional commission in the institutional bond market. In this way, the bond market is similar to the foreign exchange, money markets and most derivative markets.
What does it take to become a good sales person?
To become a bond salesman, good math skills and an understanding of financial markets are a must. Obviously, strong sales skills are vitally important. You have to be able to sell yourself, your ideas, your traders and your firm to your clients. You also need to be able to sell your clients to your traders and your firm. The best sales people become trusted confidants of their clients.
How do I become a bond sales person?
The best starting point is to get an undergraduate degree in commerce, mathematics or finance.
On the-job experience through a university co-op program is the surest way to get your foot in the door, so going to a university that has a record of placing students in the finance industry is very key.
Passing the Canadian Securities Course (CSC) exam is a regulatory requirement to work in the industry. Many sales people also obtain the Chartered Financial Analysts (CFA) designation while working.
Is becoming a bond salesman a good career decision?
If you are an aggressive, personable, smart person who has good negotiation skills, this could be the job for you. As mentioned above, sales people are evaluated by both the amount and profitability of the business they do with their clients. Getting clients and traders to transact together can prove to be a difficult thing to do. At the end of the transaction, one of the two parties (trader and client) will be left with a profitable or unprofitable trade (by the trader) or money saved or missed (by the client). Bridging those two outcomes between client and trader can be the hardest part of the job.
This is a job that is very hard work but also very exciting and fun. The best sales people I knew, had good, trusting relationships with their clients, understood completely what their clients needed to do, and were able to get their traders to buy into the client relationship.
If you want to be a bond salesman, those are skills worth harnessing.