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Compliance

COMPLIANCE MARKET COMMENTARY, Q2 2019

• Article by BRUIN Financial

COMPLIANCE MARKET COMMENTARY, Q2 2019

MARKET OVERVIEW

It is impossible to ignore the impact that political factors are having upon the economic landscape, with Financial Services firms under increasing pressure to assess their longer term strategies in response to Brexit, in addition to wide scale restructuring of Compliance teams in London. As a result, we have witnessed erratic levels of hiring over the past 18 months, and it was evident that hiring levels were slowing down towards the back end of 2018 across the Financial Services.

Despite this volatility, there will always be a requirement for firms to use external providers when sourcing candidates for niche areas such as Compliance. As a result, the Compliance team here at BRUIN Financial has seen noticeable increase in hiring levels during 2019 in contrast to the previous 12 months.

Also, whilst Investment Banks are encountering lower levels of hiring, the Investment Management space is incredibly buoyant from a hiring perspective as buy-side firms bolster their teams in response to increased regulatory scrutiny. As teams grow, roles naturally become increasingly technical, requiring candidates with subject matter expertise to fill specific requirements in teams. Over the last 3 years we have noted increased levels of hiring into Investment Managers (traditional and alternative) from 55% in 2017 to 67% of our workflow in 2019 so far.

 

MARKET TRENDS

European recruitment continues to be our largest area of growth within the Compliance space. Large volumes of our Asset Management client base are moving operations to either Luxembourg or Dublin, and we have a proven track record of delivering mandates in each of these locations. In addition, large volumes of our traditional Investment Banking clients are looking at hiring onto the Continent, with Paris and Frankfurt being key hubs for such growth.

The most important shift in the market in recent years has been the change in mind-set of candidates in the market. For years, hiring in the Compliance space has been dictated by salary uplifts in response to regulatory need, but more recently candidates are being more heavily motivated by flexibility. Work life balance and culture of firms are now the leading motivators when people are looking for roles, although clearly remuneration still plays a huge part in the decision to move!

 

ROLE PROFILES

 

Asset Management

 

Monitoring

Q2 has seen a real surge in Monitoring roles within Asset Management, with a range of vacancies from Analyst all the way to VP level. Candidates who have the experience of conducting the full end to end review are becoming increasingly sought after. Clients who have shown more of a desire for the ability to understand the methodology of conducting a review, as opposed to business area, have been the most successful in filling positions.

 

Guidelines

This has been an incredibly busy space over the past 18 months, with multiple firms implementing Blackrock’s Aladdin system. This has driven a movement of candidates into the contract space to help with the implementation and transition of clients onto the new platform. However, with projects coming to an end and impending changes to contractor regulations (IR35) there has been a recent shift to candidates seeking permanent employment in this space.

 

Generalist

This was the area which was arguably most buoyant in Q2, and has shown no signs of coming to a halt. Movement drives hiring, and this cycle has certainly become more evident. Of course, the requirement for additional recruits amongst the growing firms has also been noticed, and many of these roles will genuinely be completely generalist covering everything from Guideline Monitoring to Horizon Scanning. This certainly reflects the increased scrutiny on these firms from the regulators, as some of these firms possibly were barely required to cover the finer details.

 

SMCR

The extension of SMCR is now very much on the priority list for Investment Management firms and we have seen increased levels of hiring into this space during 2019. The majority of this hiring is still taking place from a contract perspective, but we have seen increased volumes of permanent recruitment too. Typically, candidates in this space are going to have previously worked in the Investment Banking space in a contract capacity, so buy-side firms are going to have to be flexible in terms of background when hiring into this space

 

Financial Crime

Financial Crime hiring on the buy-side has been much more active, and we expect this to continue throughout the year. Most Financial Crime teams remain fairly small so the requirement for a generalist is still the most common.

 

Banking

 

Monitoring

Some of the larger banks have created new functions to specifically focus the monitoring of their Front Office Divisions. This requires candidates with not only front office product knowledge but candidates with excellent senior stakeholder engagement. To find the right candidate we are still seeing a willingness to consider candidates from differing backgrounds; perhaps Audit or Operational Risk

 

Advisory

This was yet again one of the more buoyant areas within the sell side. With the majority of the city paying bonuses within the March/April period many candidates took this opportunity to explore new ventures.  Requirements have tended to be varied and not one particular product line has seen more movement than others.

 

Predictions

Moving into the second half of the year after what has been a delayed start to hiring from H1 we predict that there will be some overlap of processes carrying into this quarter as firms look to play catch up before the summer holidays commence.

 

Compliance FTCs

With the potential effects of IR35 already being noticeable within the larger Investment Banks we will see a significant increase in 12 Month FTCs as firms look to avoid any of the repercussions surrounding IR35.

 

Compliance Advisory

Another area which will see some movement is the Compliance Advisory sector which tends to pick up this time of year. Overall, bonuses were muted for a lot of firms, which has driven interests from candidates seeking to move elsewhere where performances have been better.

 

Buy Side Firms

This will continue to be our busiest area as we have seen a steady flow of generalist compliance positions at Analyst to AVP level over the past month. A key factor with keeping these roles generalist is that it allows the candidate to be able to cover different aspects of a compliance framework instead of plateauing in a specific function which leads to them moving on.

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For more information about the market or current opportunities please contact one of our Consultants.