Welcome to the first of three articles in our ‘Essential Product Control Guide‘ series.
Product Control Explained is your essential guide to life as a Product Controller. Here are some of the most common questions we’ve been asked about Product Control – answered honestly by experienced team of Controllers:
What Is Product Control?
Product Control is, as the name suggests, a Control Function found in Financial Institutions, primarily Investment Banks, Hedge Funds, Wealth Management and Asset Management Firms. Product Control is seen as either a Middle Office or a Back Office function (as opposed to Trading divisions which are known as Front Office).
Product Control is a crucial part of Finance. It acts as an independent control department with a remit to ensure the integrity of an organisation’s financial statements through preparation and independent verification of daily and monthly P&L, balance sheet reconciliation and substantiation, and valuation testing of trading inventory.
Where do Product Controllers work?
As mentioned, Product Control Functions are found in Financial Institutions, primarily Investment Banks, Hedge Funds, Wealth Management and Asset Management Firms. The main Product Control hubs are London, New York and Singapore however banks have local Product Control teams in many other locations including Hong Kong, Tokyo, Sydney, Johannesburg, Frankfurt, Paris, Christchurch and Dubai. There are many others.
What do Product Controllers do?
The Product Control role can be extremely varied. At its core it involves preparing daily P&L reporting for a trading desk or group of trading desks within a specific asset class (e.g. Equities, Rates, Credit) The role can also involve month-end reconciliation between reported P&L and the official books and records and price testing of inventory to ensure that the carrying value of a trading book’s inventory has been independently verified.
Product Control roles could also involve preparation and development of Management Information (MI) and may also be Project Based, e.g. Focusing on the implementation of new systems or processes.
What skills do I need to be successful?
There are a number of core competencies required to be a successful Product Controller. The key ones are listed below:
- As an independent control function the integrity of Product Control is crucial.
- To be a success in any role, not just Product Control, proactivity is a key skill. To take the initiative and solve a problem, improve a process or build a relationship demonstrates commitment and passion for the role.
- To get the most out of the role you need to be passionate about it. Product Control is a prime example of role that will give you back what you put in. If all you want to do is prepare daily P&L then you won’t be challenged and you will not get a lot from the role. If you start each day with a desire to learn and improve then opportunities will present themselves and you will be constantly challenged and motivated.
- Product Control is a team culture and you must be able to work effectively as part of a team to be a success. Helping even out workload, collaborating to solve problems and sharing knowledge are all qualities that those working in high performing Product Control teams possess.
- Problem Solving
- A common claim made about the Product Control role is that no two days are ever the same. Whilst some days can be very similar there are always new issues to investigate and resolve, regardless of how long you have been in the role. An interest in and aptitude for problem solving will take you a long way.
- Relationship Building
- Product Control as a function has a wide variety of stakeholders in Front Office and Finance. A new Controller will have to build relationships with Traders, Desk Heads and Trade Support/Operations. As your career progresses you’ll begin to deal with a more senior client base including Regional Trading Heads, Business COO’s, Product Control Management, Project Teams, Other Infrastructure Team Leads…the list goes on. The ability to build strong working relationships with such a diverse client base and communicate appropriately both verbally and in writing is a crucial skill.
- Professional Scepticism
- At its core, Product Control is an independent control function and a Controller should never lose sight of this. There is a critical balance to strike, particularly where Front Office is concerned, between building a good and respectful working relationship and retaining that independence. Professional scepticism is something that comes with experience but at its core it means never taking something at face value, always questioning and taking a holistic view to ask whether a trade, an explanation or a comment makes sense in light of all the other information available to you. This, along with integrity, is the core of Product Control. Blind acceptance has no place.
How do I get into Product Control?
There are two common entry points into Product Control:
- Newly Qualified Accountants moving from Practice
- Graduate Finance Programmes
Although these are the main routes they are by no means exclusive. People also move into Product control from other areas within Finance or from Operations / Middle Office. See below for more on the interview process.
What qualifications do I need?
Most Product Controller either join as qualified accountants directly out of Practice (usually Audit) or are in the process of studying to obtain a professional accounting qualification. In the case of graduates who join as part of a Finance Graduate Programme the study towards obtaining a qualification forms an integral part of the Programme. The Graduate programme will see graduates spend time in 2 or 3 difference areas within Finance of which Product Control is normally one.
Again, although this covers the majority of controllers but we’ve seen many controllers build successful careers who aren’t qualified accountants or have non-audit backgrounds.
A relevant degree isn’t essential with Controllers, in our experience, having a studied a wide variety of subjects including the Arts, Engineering, Science and Business.
Again this will depend on the nationality of the Controller. In the UK, the Big Four Accountancy Firms recruit across degrees. Contrast this with South Africa where to become a Chartered Accountant you have to study an Accounting degree or equivalent, obtain a specific Post-Graduate qualification and then complete a four year training contract with a recognised Firm.
What is the interview process?
The interview process depends, of course, on the entry level and experience required for the role. Graduate Finance scheme places are invariably filled through assessment centres.
Interviews for candidates moving from Practice will generally consist of 2 or 3 ‘rounds’ where you’ll meet the Hiring Manager, another manager in the area and probably some of the wider team. There is also usually an HR interview. The interview can be challenging, especially for those without a Financial Services background but luckily for you we’ve pooled our years of experience of sitting on both sides of the interview table to bring you the most comprehensive guide to a Product Control interview you’ll find anywhere:
How much will I earn?
The million dollar question! Well, maybe not quite.
Careers in Product Control can pay well, especially as you grow in seniority. Remuneration takes the form of a base salary which will be driven by your level of experience and job title, and an ‘incentive’ payment (bonus to you and me). Investment Banks in particular also normally have an additional wide range of benefits that employees are able to take advantage of.
The bonus will be a percentage of the base salary which depends not only on your experience but also your performance during the preceding year. Rank highly among your peers and you’ll be rewarded accordingly. Under-perform and a donut (zero bonus) is the likely outcome. This is, of course, all assuming your Bank or organisation has had a good year. The overall size of the bonus pool is correlated to the Full Year Results.
The wide variation in Finance bonus payments in recent years (with zero bonus years not uncommon, particularly among junior controllers) serves to highlight that this component of total compensation cannot be relied upon when considering potential earnings. Whereas 10 years ago bonus levels of 20% upwards were common across all levels in Product Control, post GFC they are the exception rather than the norm.
That said, base salaries in Product Control remain relatively high. For a comprehensive guide to Salary levels and trends broken down by specific role, experience and location we recommend checking out the Robert Walters 2015 Salary Checker App.
You can download this FREE by visiting our RESOURCES page HERE.
Product Control is a rewarding, varied and interesting career in a fast-paced and ever changing environment.
Also see our RESOURCES page for the tools we’ve found invaluable in building a career in Product Control.
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