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Compliance

Compliance Market Commentary Q2, 2015

• Article by BRUIN Financial

Compliance Market Commentary Q2, 2015

MARKET OVERVIEW

Q2 picked up where Q1 left off with recruitment levels being high across both the buy and sell side industries. However, it wasn’t until mid-Q2 when we saw a surge in the market which was largely down to industry bonuses being paid out and headcounts being finalised.

Throughout the course of Q2 the Investment Banks continued to invest in their Compliance teams as the scrutiny imposed by the FCA continues to rise. This quarter also saw a dramatic rise in the demand for Compliance candidates outside of London as some of the leading Banks expand their regional hubs due to the FCA order that Retail and Investment Banking business lines must be completely ring-fenced.

Similarly to the Investment Banks, firms on the buy side continued to increase their levels of recruitment activity. Whilst Asset Managers do not tend to recruit in bulk like the Investment Banks, they are still subject to a candidate driven market. This has unsurprisingly resulted in inflated salaries in the industry and as teams grow, each role becoming more silhoed.

With the market still very much being candidate driven and good candidates not staying in the market for long, Q2 highlighted the speed with which firms are now looking to complete the recruitment process. Firms on both the buy and sell side are now looking to push through offers quicker than they would a year ago as it has become more apparent that good candidates are normally involved in numerous processes at one time . Alongside the quicker recruitment process, the greater risk of missing out has also resulted in salaries within the market becoming inflated as firms look to do their best financially to secure the right candidate.

ROLE PROFILES

Monitoring & Testing – Q2 continued in line with Q1 with solid Compliance Monitoring candidates seemingly being the most sought-after candidates in the market. The monitoring space continues to be the most fluid, as we are seeing a large number of candidates move between the buy and sell-side. This comes as no surprise as trends from Q1 suggested firms were now prioritising the methodology above any practical experience. As a result we are also seeing candidates from the Management Consultancies with an Audit focus, move into industry in a monitoring capacity.

Product Advisory – Recruitment trends from 2014 continued for the first half of the year with Front Office Advisory candidates continuing to be highly sought after as the Investment Banks upskill their Advisory teams. The majority of hiring seen in this space has tended to be at VP level, with the larger Investment Banks now ideally looking for proven candidates at other “bulge bracket” institutions. We are also starting to see more movement in this space on the buy-side, with Fixed Income Product Advisory candidates being in particular demand.

Financial Crime – As with previous years, Financial Crime continues to be one of the hotter areas within Compliance as firms across the buy and sell-sides strive to find the best candidates in the market to mitigate the risks they are exposed to. The requirement for BAU aligned candidates remains as high as ever, but it is slowly becoming apparent that our clients are looking towards those SMEs who, alongside that deep knowledge, have experience of leading projects. Due to this, this we are starting to see an increase in demand for those from one of the “Big Four” management consultancies.

PREDICTIONS

We expect Q3 to follow the trend of previous quarters and recruitment levels in the industry to continue to rise. With this increasing demand for candidates, we envisage that salaries within the industry will continue to become inflated, and candidates offered multiple opportunities at any one time becoming the norm.

Whilst we expect our clients to increase their levels of activity, we are aware that Q3 tends to see a slow down in the recruitment process; an inevitable side effect as candidates and hiring managers go away on annual leave for summer breaks.

Implementing the MiFID 2 framework is unsurprisingly becoming a core focus for firms on the buy and sell-side. As such, we foresee that investment in this area will increase rapidly over the coming months; resulting in salaries in the space to be inflated accordingly as good candidates will be increased demand.

Finally, we believe firms will continue to up-skill their Compliance teams in regional locations as building out functions outside of London continues to be a focus. Nonetheless, we fully expect that the demand for “business critical” hires in London to continue to grow and firms having to offer their best possible deal in terms of package and future opportunities to secure the best talent in the market.