Insights

Compliance

COMPLIANCE MARKET COMMENTARY, Q2 2016

• Article by BRUIN Financial

COMPLIANCE MARKET COMMENTARY, Q2 2016

 MARKET OVERVIEW

Traditionally, the vast majority of Compliance hiring has taken place within Investment Banks where teams are larger, but in 2016 we witnessed a larger proportion of hiring taking place within the Asset Management space, across both traditional and alternative firms. Investment Banking recruitment levels still account for a significant proportion of hiring in the city, but this is spread across a smaller pool of organisations, as some of the bulge bracket banks have implemented hiring freezes in the midst of economic and political uncertainty.

This is also reflected from a candidate perspective. Whilst candidates have still been moving for the right opportunities, there has been an increase in scepticism pre-referendum, with a lot of candidates deciding that they will stay put until they have further clarification around organisational strategy in the second half of 2016. However, we did see the traditional surge of movement in Q2 post bonuses being paid out, and with salary increases across the financial services still at around 20%, candidates are still moving for the right opportunities.

Overall, the Compliance market is still very much candidate driven, with firms having to compete to secure the best talent. Often those candidates that are looking will have multiple processes ongoing at any one time, and therefore firms that offer the most competitive packages in terms of remuneration and career progression will prevail when hiring. In addition, organisations are fighting to retain their staff, with many firms offering competitive and innovative bonus structures, as well as significant counter offers when their employees attempt to leave.

Investment Banking
Monitoring & Testing – whilst Q2 was generally quieter in terms of recruitment, there was still a vast amount of movement within the M&T space. The ‘bulge bracket’ banks are bolstering their teams in response to increased regulatory scrutiny, and there remains a shortage of good candidates in the market, certainly at the VP/Director level. The biggest trend from a candidate perspective is that firms are more flexible about the background of candidates, with more movement between the buy and sell side. Similarly, where there has been a shortage of candidates with M&T experience, firms have looked towards other backgrounds such as audit (Big 4 & Internal Audit) where the methodology and skill-set is transferable.

Trade Surveillance – The tier-one banks continue to structure their teams by asset class, and there is increased demand for candidates at the AVP level with specific product knowledge and exposure to mainstream systems such as Actimize and SMARTS. Within the mid-sized banks, teams operate cross-asset class and therefore get much broader exposure to different areas of the business. Firms have also been prioritising roles at a senior level. Generally, firms are looking to upskill their teams, with the majority of roles being released at the VP (80-120k) / Director (120-160k) level.

In addition, we have seen the continue trend of firms moving non-business critical firms to regional locations. Whilst there will always be a requirement for front office compliance and regulatory specialists in London, some more operational compliance functions (Central Compliance, Surveillance, Monitoring etc) are being moved out of London. This is particularly prevalent in the AML / KYC space (please review our Financial Crime specific Market Commentary).

Asset Management
Guideline Monitoring – this remains a very challenging area in which to recruit from a permanent perspective, as experienced investment compliance candidates continue to want to contract on more lucrative daily rates. This is particularly the case with candidates who have experience of coding investment restrictions. During H1 of 2016, we have seen a plethora of roles at the 50-70k mark, predominantly focussed on pre & post trade guideline monitoring. However, most firms are now flexible on systems background, with less focus on the traditional systems such as Thinkfolio, Sentinel and Charles River as most systems are intuitive.

Financial Promotions – this is a notoriously tough area to recruit into, particularly around the 50-70k mark where candidates may have 2-3 years experience. There are some good juniors, and some senior candidates who have extensive Distribution Compliance experience, but the market is very competitive at the mid-level. Firms have particularly struggled when looking for specific language skills or exposure to multiple jurisdictions.

Monitoring & Testing – as is the case within the Investment Banks, firms continue to build their M&T teams on the buy-side. We have seen hiring in this space across the vast proportion of the leading investment managers. Firms that have secured the best talent have offered candidates genuine progression in terms of management responsibilities or broadening their skill-set. If candidates are moving into a like-for-like role, then the only real incentive is financial, and therefore uplifts in basic salary become instrumental in their move.

Contract Market
In the Asset Management world recruitment has be steady with majority of the roles coming out as fixed term contracts rather than rolling contracts. Most of the Asset Managers we currently work with have been looking for candidates with 3-5 years of compliance generalist experience who are looking for a new challenge. In particular candidates that have carried out thematic review monitoring have been particularly sought after.

In contrast to the decrease in job volume, the rates offered has been very similar to Q1. Our clients are increasingly aware of the difficulty recruiting the best candidates in the market. As a result of this many have been open for rate negotiations for in order to take on top tier candidates.  Similarly, where firms have struggled to get sign-off for permanent headcount, they have been able to bring people in on fixed term

PREDICTIONS

Despite political and economic uncertainty, firms are still committed to their long term regulatory obligations and therefore organisations will have to continue to build out and sustain their compliance presence in London.

In addition, now that we have clarity in terms of the referendum outcome, firms can now commit to their obligations going forward and we have already witnessed an upturn in hiring.

Long term, there is an element of taking a ‘wait and see’ approach, but there is a strong chance that political and economical changes will only increase the regulatory responsibilities of organisations in London and regional locations.

BRUIN NEWS

In Q2 of 2016, BRUIN Financial hosted a Gender Diversity Forum in collaboration with a leading Investment Bank in London.

The workshop focused on female talent pipelining in financial services, particularly focused on their Compliance function. Over 50 women at VP level attended the event in London, with teams from New York, Ireland and Hong Kong joining by video link for the 2 hour session.

The workshop was divided into two parts. The first highlighting the key barriers that women face in progressing their careers and how to overcome them, both from the perspective of a hiring manager looking to build their team and as a woman seeking internal promotion. Attendees gained an insight into unconscious bias, how to raise their profile at work and maximise their opportunity for an internal move.

The second part of workshop focused on CV presentation, style and format for internal promotion. This included a group session on how to identify and showcase skill sets, writing accomplishment statements and a one-on-one CV review session with a consultant.

This was a hugely successful BRUIN will be running other such events over the next 12 months. For further information please contact Julia Smith on 02031453332 or Julia.smith@bruinfinancial.com.