Insights

Compliance

COMPLIANCE MARKET COMMENTARY, Q1 2018

• Article by BRUIN Financial

COMPLIANCE MARKET COMMENTARY, Q1 2018

MARKET OVERVIEW

The beginning of 2018 saw a significant uplift in activity following the end of last year. Requirements were driven not only as a result of candidate movement, but the growing regulatory scrutiny placed upon financial services firms.

On the buy-side we have seen a surge in hiring across all areas. With the imminent approach of Brexit, there has been notable growth in distribution focused roles, as well as an increased demand for European language skills and familiarity with the European regulatory environment. Given the limited candidate pool in asset management this accelerated demand for high quality candidates across all areas.

Similarly the implementation of MiFID II has continued to drive demand for candidates well-versed in the new regulations, and compliance professionals who were present during its pre-implementation phase are particularly highly sought after. The imminent arrival of GDPR has also been a key focus over the last 6 – 12 months, although it is worth noting for roles in which this was a core remit clients tended to rely on contractors

The contract market has also been buoyant, particularly around Brexit, GDPR and SMR, all areas which many candidates from MiFID II programmes appear to now be aligned. Vacancies have been seen all across all levels of seniority, however this quarter has been characterised by moderately high day rates in a predominately candidate driven market.

 

Role profiles

Asset Management

Advisory

The advisory space was particularly busy with requirements for candidates with SME knowledge of regulations such as MiFID II and MAR in high demand. The larger organizations recruited specialist MiFID II compliance officers to help advise on any post implementation teething problems, whilst the mid-tier and boutique asset managers,  roles have sought candidates with more general experience due to team size and the wider scope of these roles. This route was also more attractive to candidates not looking to specialise in a certain area of Advisory too soon in their career but would rather keep a wider scope in their current roles.

Distribution

Distribution has been especially busy so far this year, continuing the trend established in the latter half of 2017. This may be a reflection of how the entire market is carefully formulating its respective strategies around Brexit, and how they intend to distribute their funds across Europe. In many cases, European language skills are required as a minimum; and we have noted a number of  distribution focused roles in the Luxembourg offices of many leading investment managers. Roles focused purely on financial promotions are similarly in high demand, looking at candidates with subject matter expertise.

Monitoring

Many asset managers have grown their monitoring team consistently, with a great deal of movement at the Analyst / Associate level. Given the limited candidate pool, hiring managers have been more open to considering candidates from a broad range of backgrounds in financial services, simply requiring solid experience with monitoring. Many vacancies in the monitoring space have focused, to varying extents, on the market abuse regulation, often incorporating surveillance as a result.

Investment Guidelines

Another area which continued the trend established towards the latter end of 2017 was the coding and monitoring of investment guidelines. With many firms now implementing the Aladdin system, there remains strong demand for candidates with relevant experience. Roles in this space typically incorporated both pre-trade and post-trade monitoring, with the emphasis on the coding aspect of the role varying in relation to level. Typically these vacancies were geared towards the senior end of the Associate grade, and extended as far as Senior VP. Clients have been fairly open in terms of depth of experience, which demonstrates how highly sought after these candidates are, and the accelerated career trajectory candidates in this niche can anticipate.

Financial Crime

Whilst pure financial crime roles within asset management have not been common of recent, there has been increasing demand for this knowledge and experience in generalist positions. AML advisory in particular has been notable amongst the experience required for roles on the generalist side, as well as roles featuring financial crime more heavily.

 

Investment Banking

Advisory

Whilst asset management has taken precedence this quarter, the investment banking space has been busy nonetheless, particularly within advisory. We have been instructed on a substantial number of front office advisory roles, and now that bonuses have been paid out across the vast majority of firms there is a lot of candidate movement in this space.

Activity has been high across fixed income, as well as equities and derivatives. One particular area of note is the growing demand for algorithmic trading. We anticipate that this will be an expanding market as systems become more automated, necessitating systems experience in electronic trading.

Monitoring

Monitoring has been a steady, but relatively quiet as most firms have already restructured their monitoring function in anticipation of upcoming implementation dates for numerous regulations. As such this area has seen a considerable degree of movement recently, and active candidates are on the whole settled for the time being. However, we anticipate this will continue to be an area of steady demand in the coming months.

 

PREDICTIONS

In the coming few months it is expected that crucial inbound regulations and changes, namely SMR, GDPR and Brexit will continue to drive demand for compliance roles. Prior to the arrival of SMR, there is likely to be a surge in related activity on the buy-side, as the majority of SMR experts currently reside on the sell-side. Additionally, whilst activity in asset management is fairly steady throughout the year, investment banking typically undergoes a quiet phase prior to the review period. As such, there is likely to be a increase in movement within investment banking in when bonuses are paid out. Undoubtedly the significant proportion of compliance professionals working in investment banking who have not gained a promotion this year will be contributing to this movement.