Credit, Risk & Quantitative Finance | 2014 - 15 Salary Guide

David Leithead 12.10.2014

Permanent

Salaries for permanent Risk positions have seen a steady growth over the past two years. Base salaries for VPs and Directors have increased on average 20% from 2012-2013. There has been a trend in professionals with a more diverse skill-set getting paid more than individuals who are siloed into one Risk discipline. Key areas of growth have been in the Model Validation space, Global Transaction Services, Governance, Enterprise Risk and Counterparty Credit Analysis. 
 
During H1 2014 there was a noticeable rise in hiring within Model Validation and Risk Methodology roles. We have also seen a sharp increase in consultancy firms conducting huge risk-related projects as they seek to implement a full 360-degree risk process, which requires an overhaul of existing methods.

Operational Risk has also continued its hiring drive, both in the buy and sell-side at most levels and also across both contract and permanent hires. The Big 4 have been hiring in large volumes, and in particular they are keen to see operational risk practitioners who have a mix of framework design and implementation, ICAAP and ILAA experience. In addition, other skill-sets in demand are those with subject matter expertise in scenario analysis, capital markets, operations, economic capital, funds and retail.  We expect this trend to continue throughout 2014 with regulatory requirements now being more prominent in Operational Risk than ever before. Rates are starting to increase slightly and are coming more into line with the Credit and Market Risk disciplines. 

 

ANNUAL SALARY

Role: Analyst / 0-2 years AVP / 2-5 years VP / 5-7 years Director / 7-10 years MD / 10+ years
Market Risk Management £30k - £45k £40k - £60k £60k - £80k £75k - £120k £110k+
Market Risk Control £30k - £45k £35k - £55k £55k - £75k £70k - £90k £90k+
Investment / Portfolio Risk £30k - £40k £35k - £50k £50k - £70k £65k - £85k £90k+
Credit Analysis £40k - £50k £50k - £65k £70k - £110k £120k - £150k £150k+
Credit Risk Control £30k - £45k £35k - £55k £55k - £75k £70k - £90k £90k+
Operational Risk Management £30k - £45k £45k - £65k £65k - £80k £85k - £110k £110k+
Quantitative Risk Analysis £36k - £55k £55k - £75k £75k - £120k £120k - £160k £160k+

Contract/Temporary

As a result of regulatory pressures, many institutions are looking to hire Market Risk professionals with strong quantitative backgrounds. This is to work in disciplines such as model validation, model risk, methodology and quantitative portfolio risk. Although there have been limited requirements for front line market risk analysts across asset classes, this could change as banks start reporting increased trading volumes. One other growth area in Market Risk has been in the reporting function. Many sell-side and buy-side organisations are looking for professionals who understand VAR and can report it in a qualitative way to internal stakeholders. More and more reports are being produced due to heavy regulatory pressure from the local sites and foreign regulators that the organisations have exposure to. Consequently we are seeing some of the banks paying more for niche skill-sets and they are setting aside higher budgets. These can range up to £500 per day for just 4 years experience. 
 
Since the turn of the year, Credit Risk hiring has been active. Many of the positions that have been released to the market have either been within credit analysis or credit risk methodology, in response to the increase in Basel requirements and to ensure that businesses have sufficient capital in place to combat any unexpected losses. 
 
Within Quantitative Finance, there has been demand for headcount in both Market and Credit Risk. Having seen a slowdown in CVA-focused positions, there is now an increased appetite for wholesale modelling around PD, LGD, EAD, as well as traded book counterparty credit risk. The rates are still high at around £400-£600 for 5-7 years’ experience for strong professionals with top-tier academics and solid communication skills.  
 
From a regional perspective, there is not the huge differential between salaries within the various elements of Risk. However, salaries have remained reasonably flat over the past few years despite demand being extremely high for professionals with credit risk and SAS experience.

 

RATE PER DAY

Role: Analyst / 0-2 years AVP / 2-5 years VP / 5-7 years Director / 7-10 years MD / 10+ years
Market Risk Management £150 - £300 £250 - £400 £350 - £500 £450 - £650 £650 - £800
Market Risk Control £150 - £220 £220 - £350 £300 - £450 £400 - £500 £450 - £550
Investment / Portfolio Risk £150 - £300 £250 - £400 £350 - £500 £450 - £600 £550 - £800
Credit Analysis £150 - £200 £200 - £300 £300 - £350 £350 - £400 £400 - £500
Credit Risk Control £150 - £220 £220 - £350 £300 - £450 £400 - £500 £450 - £550
Operational Risk Management £150 - £220 £220 - £350 £300 - £450 £400 - £600 £500 - £800
Quantitative Risk Analysis £200 - £300 £300 - £400 £400 - £600 £600 - £850 £850 - £1000
David Leithead's picture
Chief Operations Officer UK
dleithead@morganmckinley.co.uk