What Is the Front Office?

The front office represents the customer-facing function of a firm, for example, customer service, sales, and industry experts who provide advisory services. The functions of the front office generate most of the revenue for the firm. Many firms are can be divided into three parts, the front office performing sales and client service functions, the middle office that manages risk and corporate strategy, and the back office, which provides analysis, technical, and administrative support services.

The Origins of the Front Office

The term "front office" originally emerged in 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 establishment in a local area. By the 1930s, front office changed to encompass the most critical staffers in a company, such as managers and executives.

Key Takeaways

  • The front office is typically composed of customer-facing employees such as sales and service staff.
  • Because the front office has the most direct contact with clients, it is responsible for generating the bulk of revenues.
  • The front office relies on the back office for support in the form of Human Resources, Internet Technology, and accounting and secretarial functions.

Front Office Employees

Front office staffers have the most direct contact with clients. In many settings, the front office is the reception and sales areas. In a financial services business, these employees are experts who generate revenues by providing services such as wealth management. Depending on the type of service the company provides, front office personnel may be some of the lowest paid employees such as receptionists.

Financial Services Middle and Back Office Employees

The middle office and the back office employee support the activities of the front office. The middle office personnel would ensure that a company remains solvent and complies with regulations and ethical business practices. For a financial services firm, these departments might include corporate strategy, compliance, and financial control.

The back office includes administrative assistants, human resources staff and accounting staff. Also critical to the back office is the IT and technology departments. In a financial services firm, technology in the form of predictive analytics and algorithms play a central role.

Real World Example

A front office position as a Certified Financial Planner CFP® is an excellent career choice for those who are attracted to commodity broking, trading, or corporate investment banking. CFP® is one of the fastest growing positions in financial services. A CFP® works with clients to promote wealth management such as planning for college tuition expenses, retirement, and meeting long-term financial goals. The requirements for a CFP® designation include a bachelor's degree from an accredited university or college, completion of a CFP Board-registered education program, and passing the CFP® exam. Candidates should also amass three years of full-time financial planning experience, for example, through an apprenticeship.