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Compliance

COMPLIANCE MARKET COMMENTARY, Q3 2018

• Article by BRUIN Financial

COMPLIANCE MARKET COMMENTARY, Q3 2018

MARKET OVERVIEW

Throughout 2018, we have noted a marked increase in the levels of hiring within the investment management space, with circa 60% of permanent hires being made in asset management, spanning both traditional and alternatives houses. We have continued to see large volumes with our traditional banking clients; however these remain within the more niche front office / product advisory roles.

With recruitment levels still generally high in the Compliance world, it remains an incredibly candidate driven market. When good candidates come onto the market, it is not unusual that they will have multiple processes on the go, meaning that the interview process has become much more of a two way dialogue. As a result, three main factors come into play when securing the best talent in the market:

  • Compensation – on average we are seeing an increase of circa 23% when candidates are moving from one permanent role to another
  • Process – firms that have smooth processes in a competitive market are more likely to secure the best candidates

Flexibility – work-life balance is an increasingly important factor in candidates decision making, so firms that can offer genuine flexibility when it comes to candidates and their careers will have a huge influence on a pool of candidates who are looking for something ‘different’ in their next move

Role profiles

Investment Management

Guideline Monitoring

A number of firms are implementing Blackrock’s Aladdin system, and as a result there is significant demand for candidates with experience of implementing Aladdin, or conducting the BAU coding / monitoring using the system. We continue to see candidates with strong guidelines experience transition into the contract market where they can command higher daily rates. In addition, there is still demand for candidates who have exposure to other systems, with Thinkfolio, Sentinel and Charles River still being used across the city.

Distribution & Marketing Compliance

This area continues to be highly competitive, and the roles tend to be split into either Financial Promotions roles, or Advisory roles focusing on the distribution of funds to mainland Europe. Candidates with additional European languages skills are particularly in demand as a result, and in a position to command significantly higher salaries.

Compliance Monitoring & Surveillance

Monitoring candidates remain in demand across the city, and it is probably the only area in which we see candidates transition between the buy-and sell-side as particular product knowledge is less important than the monitoring methodology that candidates possess. Consequently, we have noted a number of candidates transition from audit into monitoring. In

addition, buy-side firms are building out their trade surveillance capabilities, and again are open to seeing candidates from more established teams within sell-side organisations.

 

Investment Banking

Front Office Advisory

Candidates with specific product knowledge remain incredibly valuable to our banking clients. We have seen high volumes or recruitment across public (notably fixed income and equities) and private side teams. We have also seen a noticeable increase in roles within algo-trading compliance, with clients and candidates seeing this as an area in which they want greater exposure.

Financial Crime Compliance

We continue to see roles in this space being outsourced to regional or offshore locations for cost reasons. Countries such as Poland are becoming an increasing hub for teams conducting more ‘operational’ roles.

 

PREDICTIONS

We anticipate that Q4 will start with high volumes of permanent recruitment as firms look to complete their hiring plans by the end of the year. This high level of activity will naturally decrease as we head towards the Christmas period.

However, whilst there is high volume of hiring, unfortunately the candidate pool will shrink as the realisation of bonuses makes moving roles less appealing during Q4 every year. As a result, firms with the capacity to buy-out bonuses or offer assurances around bonuses for 2018 will be better placed to secure the best talent.

With Britain’s EU exit date fast approaching us and uncertainty increasing around the subject we could face a challenging period ahead. We are already witnessing a slight slow-down in hiring in London, but are seeing a dramatic increase in roles being hired in European locations. In 2018, BRUIN Financial launched our Dublin office to service our existing client base who have operations in Ireland. In addition, we have successfully placed a number of roles in Luxembourg with clients setting up management companies on the continent. From a banking perspective, Paris and Frankfurt seem to be the locations of choice and we are getting an increasing number of enquires about our capacity to service those locations.

 

Contract & Regional Compliance

The compliance contract market has been slower than previous quarters, due to the summer period. However, we have seen an influx of regulatory compliance opportunities on the buy-side, mainly, around SMCR and BREXIT Compliance projects. On the Senior Managers Regime, the FCA except all regulatory firms to have implemented this by December 2019, consequently we have recruited a number of SMCR Project Managers. We have seen a number of Guideline Monitoring and Financial Promotions mandates from our buy-side clients on a contract and fixed term contract basis, largely due to a peak period. As we head into Q4 we except a steady flow of Compliance Contract positions.