Explanation :In its most broad definition, the FO is responsible for generating a firm’s revenues, and, therefore, it integrates the sales and trading personnel, which may be people who work in the investment banking, private equity, trading floor, etc. depending on the type of the company. Some people argue that the traders should not be considered front as they are not coming in direct contact with the clients. However, they are generating revenues for the firm. Another special type of front office is the equity research department, which, although is not generating revenues, has a direct impact on the firm’s revenues with the reports that the analysts produce. So, at the end of the day, it all boils down to the roles that people play in a company and how these roles can positively contribute to the firm's income.
In a nutshell :
- On a conceptual level, the operations of many firms are divided into three parts: the front office, the middle office, and the back office.
- The front office is typically composed of customer-facing employees, such as the marketing, sales, and service departments.
- Because the front office has the most direct contact with clients, it is responsible for generating the bulk of revenues for the firm.
- The front office relies on the back office for support in the form of human resources, internet technology (IT), accounting, and secretarial functions.