Time to try inter-dealer broking?

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A new beast is prowling the financial services milkround: inter-dealer brokers (IDBs) are on the hunt for graduates.

What are they?

As their name suggests, inter-dealer brokers arrange transactions between dealers at investment banks. They enable traders in investment banks to do large deals with each other anonymously. For example, if a trader wants to buy five million shares in Company X at 50p each, he or she will go to an IDB first to check prices and availability, and then buy the shares through the IDB if he decides to go ahead. Despite the deal being arranged by the IDB with a trader at another investment bank, the deal settles as if it were done with the IDB, to preserve the anonymity of the two banks. The IDBs take a small percentage of the value of the deal as a commission, and because the volumes they deal with tend to be very large their role can be highly lucrative.

Why are they hiring?

a) They're experiencing record levels of activity. ICAP, the world's largest IDB, smashed previous highs during August. Meanwhile, the second biggest player, Tullett Prebon, has boasted that current market conditions are "ideal".

b) As traders at banks become more educated and urbane, IDBs are being forced to drop their barrow-boy image and go for graduates too.

How many are they hiring?

ICAP is boldly going where no inter-dealer broker has gone before, and upping the number of graduate recruits by 50%. It's looking to take on 75 graduates across broking, finance and IT for 2008.

Less ambitiously, Tullett Prebon is hiring 50 graduates and interns worldwide, a rise of 20% on last year.

How can I impress?

In the barrow-boy era you'd be considered if you had the right personality type - i.e. you'd have to be able to take a ribbing in a macho environment. Nowadays it's all about academic achievement - you won't be considered if you have less than a 2:1. You'll also need to be personable - the bread and butter of inter-dealer broking is building client relationships.

Recruiters say that a good skill is languages - especially French and German, as firms look to tap the lucrative equity and cash derivatives market there.

ICAP tells us it looks for "people who have the good humour and energy to enjoy working in a fast-moving, team-orientated environment".

What's in it for me?

Headhunters say the average graduate starting salary is 30k. A few years ago a junior broker could expect to be on less than 20k for the privilege of working nine-hour days and being the butt of colleagues' jokes. The revised salaries signal a new approach to graduate recruitment and a concerted effort to compete with investment banks.

Who are the main players?

ICAP currently tops the IBS tables. There are rumours of a possible merger between second-place Tullett Prebon and the third biggest firm, US-based GFI, in a bid for the top spot. Then come Tradition (French-Swiss) and Cantor Fitzgerald (US).