What does 'Front Office' mean

The front office consists of the sales personnel and corporate finance employees in a financial services company; these people generate most of the revenue for the firm. A financial services company is logically broken up into three parts: the front office includes sales personnel and corporate finance, the middle office manages risk and corporate strategy, and the back office provides administrative, technical and support services.

BREAKING DOWN 'Front Office'

The origin of the term "front office" comes from law enforcement in the early 20th century. Criminals in the underbelly of society called the main police office or the main detective bureau the front office because it was the highest law enforcement office in a local area. By the 1930s, "front office" changed to encompass the most important staffers in a company, such as managers and executives.

Typical Employees

Front office staffers have the most direct contact with clients among any employees at a financial services firm or an investment bank. This means revenue generators hire experts in wealth management, sales, trading, investments and private equity. The one exception to this rule is the equity research department; it doesn't directly generate revenue, but it plays such a vital role in the decision-making process that these employees must work closely with people who invest clients' money. Researchers write reports about earnings prospects and companies that could benefit from investments.

People who want to work in a front office should lean towards careers as commodity brokers, financial traders or corporate investment bankers. These people know how to shift large sums of money to get the optimized return on client investments. Investment bankers advise companies on mergers, acquisitions and raising investment capital through various markets. Traders buy and sell investment products, such as stocks, bonds and commodities, on behalf of clients.

Support Network

The middle office and the back office both support the activities of the front office. The middle office includes employees who ensure an investment company remains solvent and doesn't engage in bad investment practices. These departments include corporate strategy, compliance and financial control. The middle office works closely with the front office to help run the revenue-generating aspect of the investment bank smoothly.

The back office entails support staff such as administrative assistants, human resources and accounting. The back office also includes technology departments, such as IT employees and technical support. Due to a greater technological role that computers, software and algorithms play in everyday investments, the back office has become more prominent in the daily functions of financial services companies. Without the support network in the middle office and back office, the front office fails to make money for the investment bank.

RELATED TERMS
  1. Virtual Office

    A virtual office gives businesses a physical address and office-related ...
  2. Compliance Officer

    An employee whose responsibilities include ensuring that the ...
  3. Data Protection Officer (DPO)

    A data protection officer (DPO) is a position within a corporation ...
  4. Key Employee

    A staffer who is a stakeholder and in a decision-making role ...
  5. Adverse Domination

    A legal doctrine that allows regulators to bring litigation against ...
  6. Revenue Officer

    An individual who collects revenues such as taxes and duties ...
Related Articles
  1. Managing Wealth

    Top 3 Trends Affecting Private Wealth Management

    Don't miss out on high-net-worth clients because you aren't prepared for their service demands.
  2. Taxes

    How To Claim Home Office Expenses

    There are many factors to determine what home office deductions can be made towards your small business. Planning ensures high deductions.
  3. Investing

    Microsoft Launches Office 365 in 10 New Countries (MSFT)

    Microsoft Office 365 will now be available in 10 additional countries. This means Office 365 is now available in 150 markets and 44 languages.
  4. Personal Finance

    A Career In Endowment Management

    The pay may not be as competitive as Wall Street, but the work environment, opportunity and knowing your helping out an educational facility makes this an attractive career.
  5. Investing

    Why This Stock Can Rise 60%

    Office Depot has been transforming its business model and the stock represents a big opportunity.
  6. Investing

    Office Depot Dips After Announcing $1 Billion Deal

    Shares of Office Depot (NASDAQ: ODP) fell 9% during after hours trading on Tuesday after the office supplies retailer announced its intention to buy CompuCom, a provider of IT managed services, ...
  7. Retirement

    Who Can Really Help at Your Local Social Security Office

    Many calls to Social Security end in frustration. It doesn't have to be that way.
  8. Retirement

    Is Your 401(k) Administrator Competent?

    The more that employees know about their employee 401(k) plans, the better. But what doesn't your administrator know?
  9. Investing

    Office Depot Has a Plan for Life Without Staples

    Office Depot (NASDAQ: ODP) spent more than a year in limbo as it waited for federal regulators to approve its deal to be acquired by rival Staples (NASDAQ: SPLS). That deal was ultimately cancelled ...
  10. Insights

    Remarkable Earnings Of Former U.S. Presidents

    Ex-presidents have the opportunity to earn huge money through book deals and public speaking. Yet some ex-presidents managed to find themselves facing bankruptcy.
RELATED FAQS
  1. What's the average salary of a loan officer?

    Read about the average yearly salary for a loan officer. Learn about what these professionals do and what determines their ... Read Answer >>
  2. What is the financial services sector?

    The financial services sector consists of a diverse group of companies that goes beyond banks and credit unions. Read Answer >>
  3. Can LLCs have employees?

    Discover how limited liability corporations (LLC) can have an unlimited number of employees and the legal steps required ... Read Answer >>
  4. What exactly is a portfolio? Is it something I can carry around?

    The quick answer to this question is that a portfolio is a collection of stocks, bonds and/or other investment assets. A ... Read Answer >>
Hot Definitions
  1. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  2. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  3. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  4. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  5. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  6. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
Trading Center