Q2 is normally the time of year that compliance hiring picks up, and after a slow Q1, it certainly did increase this year across both temporary and permanent positions.
Compliance market overview
Following on from our Q1 update, and the predictions we made of seeing an improved market, the positivity was seen almost as soon as the clock struck 00:00 on the 1st April. Job flow has picked up across a plethora of firms, from your top tier investment banks, to small asset managers and banks across the city, as well as on the outskirts in neighbouring counties.
Unusually low levels of hiring in Q1 can be attributed to Brexit, but firms have realised that they need to keep up with the day-to-day. This has resulted in an increased volume of hiring in Q2. Interestingly, for roles throughout this quarter, salaries have been at a lower range than normal - most prominently for general roles within core compliance.
Another trend noticed in the past quarter was more firms looking to hire people on Fixed Term Contracts rather than on a daily rate. Whilst daily rates would normally make up 75-80% of the market, it has now swung to an even 50% split.
Historically, Q2 is when the financial services recruitment market starts to get going - it was certainly the case again this year. Although political uncertainty may have had some impact, the two main drivers for the pickup in activity during Q2 compared to Q1 were:
- Bonus Payments - By Q2, all financial services firms (excluding a select few) would have paid their annual bonuses. This tends to be a very popular time for candidates to move roles.
- MiFID II - Naturally, there was always going to be post MiFID II implementation issues following the ‘go live’ date of 3rd January 2018. Many firms experienced this, and it may have contributed to the lack of new headcount approved in Q1.
We expect to see continual increases in job flow until late August, when hiring tends to cool off.
Most exciting roles seen throughout Q2
- Compliance Generalist - This will always be driven by smaller banks and asset managers as they do not have such separated areas and departments as the larger banks. The type of experience that is demanded is to have cross covered multiple areas of compliance, i.e. monitoring, surveillance, PA dealing, G&E and control room. Depending on the type of firm, they will sometimes stipulate certain product exposure such as equities, fixed income, investment funds, foreign exchange etc. These roles previously would have paid in excess of £500/day, but this year they are being paid more on FTCs at around £60,000 - £80,000.
- Compliance Junior / Associate - We have seen junior hiring increase over Q2 across both the KYC area as well as core compliance. Both of these areas will look at candidates coming fresh into compliance, seeking individuals with strong attention to detail and a desire to learn and grow within the field. A legal, economics or finance degree would be beneficial for those wanting to take an easier route into compliance. The successful candidates in this area are most regularly coming from either operations or legal departments, in roles such as operations analyst or paralegal. The market rate is currently £25,000 - £38,000.
- Monitoring - Quarter on quarter, compliance monitoring has been the busiest area of compliance hiring. Q1 saw compliance monitoring being mainly busy over smaller tier 2 firms, and whilst this is still the case, it has also grown to be the busiest area across the tier 1 banks in Q2. Previous desk / thematic reviews experience is highly desirable but not essential for some firms. Where it is not imperative, they will look at candidates with good product knowledge, mixed with different operational experience or an investigative background. Rates are £50,000 - £70,000 or £350 - £450/day.
We’ve seen numerous permanent compliance and financial crime roles across both buy-side and sell-side. Vacancies ranging from managing director down to junior, organisations have also been looking into hiring away from the UK to Dublin, Frankfurt and Luxembourg. Our Q2 hot jobs have been:
- Compliance Monitoring - Primarily due to regulatory pressure, but also due to the lack of strong compliance monitoring / thematic review candidates. This has been across buy and sell-sides, with both areas happy to consider candidates from the opposite markets as well as professionals with 3rd line / internal audit profiles.
- Regulatory Advisory - Following the implementation of MiFID II, we’re still seeing organisations looking to hire regulatory advisory professionals. Regulations including MiFID II, AIFMD, UCITS V and SMCR have been the main focus.
- Investment Guideline Monitoring - These type of roles are buy-side only, and hiring has been completed into retrospective teams year-on-year. Many organisations are now changing monitoring systems and this can lead to new headcount and new skill requirements, resulting in movement across the market. Coding skills are heavily demanded, along with pre and post trade monitoring experience. Previous experience of multiple monitoring systems is of great interest as it shows an ability to adapt.
Desirable skills sought after in Compliance candidates
- On the job experience is the most valuable across both temporary and permanent
- Regulatory experience, encompassing a strong understanding of the FCA Handbook, MiFID II or 4MLD depending on field of expertise
- Depending on area, additional courses/qualifications such as CISI, ICA, ICA Diploma in Financial Crime/Regulatory Compliance and ACAMS
- Senior stakeholder experience and transitional skills from similar departments
Predictions for the upcoming quarter
Q3 will start off with firms’ hiring remaining buoyant after “football coming home”. If you have read this and “football didn’t come home” it means England didn’t win the World Cup...I still expect Q3 to remain stable continuing on from the Q2 rise. The hiring for SMCR implementation for buy-side firms is going to be an area of growth next quarter, despite the exact date being unknown - a number of firms are getting people in place in advance.
We anticipate there to be an increasing prevalence of women in compliance. Many organisations have stated that they would be happy to create opportunities for strong female candidates where there weren’t originally vacancies. Firms will also look to bolster teams in regulatory change and horizon scanning with clarity coming on Brexit policies, and hiring will continue in Dublin due to various Brexit programmes.
Contributors to the Compliance recruitment Q2 update were:
Caleb Hawkins | Team Leader, Compliance Temporary Recruitment - 020 7092 0233
Harry Rogers | Senior Consultant, Compliance Recruitment - 020 7092 0242
Leo Bellometti | Senior Consultant, Compliance Recruitment - 020 7092 0044