what the hell is a financial engineer ?

blinko

what the hell is a financial engineer ? came across this while trawling the investment websites and just what what the hell these guys do ??

thaylock

Someone who engineers your finances.

Walletwatch

thaylock wrote:

Someone who engineers your finances.

Interesting... By that definition, most of these guys who work for some of these dodgy online investment companies should be called financial doctors - those that doctor your finances ;-)

cheerfulcat

Hi, blinko,

Have a look here -

http://www.riskglossary.com/link/option_pricing_theory.htm

"...the field of financial engineering, which is dedicated to designing and implementing such derivatives pricing models. Practitioners in that field are called financial engineers. These tend to be highly paid professionals with advanced degrees in mathematics or physics that enables them to implement sophisticated pricing models. "


Cheerfulcat

ReportInvestor

Could this be a clever way for the actuaries to re-invent themselves after the Equitable and pensions mess?

They've done too much "financial engineering" of the wrong sort in the last century :mad: .

Stonk

It's nothing to do with actuaries. Actuaries are glorified statisticians. No way in the world could an actuary become a financial engineer.

Financial engineers are invariably highly intelligent PhD mathematicians, who put their PhD knowledge to work on stuff like modelling and valuing the complex financial products that investment bank traders deal in.

Working in the investment banking industry, I have a healthy disrespect for "finance professionals". However, financial engineers are a notable exception, truly worthy of my respect, and of the money they earn.

Phonix

It's a clever way for them to say that their work is as important as an engineer's.

Stonk

Not so long ago a financial engineer at Goldman Sachs got a pricing model slightly wrong, and over a period of time it cost the bank tens or even hundreds of millions of pounds. So I would say that a good financial engineer is pretty damn important to their employer.

Let's not get into knocking the overuse or otherwise of the word "engineer". Engineers make things. Software engineers make software, financial engineers make mathematical models - just because you can't touch what they make doesn't mean it's any less valid.

ReportInvestor

Stonk wrote:

It's nothing to do with actuaries. Actuaries are glorified statisticians. No way in the world could an actuary become a financial engineer.

Are you saying that they financial engineers are mathematically clever, understand investment decisions and can also relate to people :rotfl: ?

What a shame that actuaries, rather than financial engineers, got to run so many of our Life Assurers . How many investors are paying the price :mad: ?