Financial Services, Middle Office & Operations 2012 Salary Guide

Hakan Enver 09.01.2012

Middle Office & Operations Salaries

Asset Management & Private Banking Salaries

Permanent Roles

The recruitment market for operations and middle office roles was challenging in 2011. Companies focused on performance excellence and client services under a constant pressure for cost efficiencies and reduction. Basic salaries remained stable and we expect similar in 2012, with the exception of performance analysts and transition managers who might be able to command slight increases.

We are also seeing increased demand for professionals with strong client facing and relationship management experience, especially if this includes managing relationships with institutional clients.

Restructuring and continual process improvements are driving a need for strong asset management experts with experience of operational change, and this is expected to be consistent throughout 2012. We also saw a premium being paid for specific experience within asset management and private wealth businesses.

 

BASIC SALARIES (PER ANNUM)

Role: Analyst /0-2 years AVP / 2-5 years VP / 5-7 years Director / 7-10 years MD / 10+ years
Relationship Manager £30k - £35k £35k - £55k £55k - £70k £65k - £85k £80k+
Client Services £25k - £30k £28k - £37k £35k - £45k £45k - £65k £65k+
Client Reporting £30k - £32k £30k - £35k £35k - £45k £40k - £55k £50k - £80k
Fund Manager’s Assistant £30k - £40k £40k - £50k £45k - £65k £60k - £70k £65k - £80k
Portfolio Control & Cash Manager £30k - £35k £32k - £40k £40k - £55k £50k - £65k £65k - £80k
Performance Analyst £32k - £35k £35k - £45k £45k - £65k £50k - £70k £70k+
Transitions Manager £40k - £45k £40k - £50k £50k - £65k £60k - £80k £70k - £100k
Fund Administrator £25k - £35k £35k - £45k £45k - £65k £65k - £90k £90k+
Valuations & Pricing £30k - £35k £32k - £38k £35k - £45k £60k - £70k £70k - £100k
Data Manager £30k - £35k £32k - £40k £40k - £55k £50k - £80k £70k+
Business Manager £40k - £50k £50k - £65k £65k - £90k £80k - £110k £120k+

Temporary Roles

Throughout 2011 there was a decline in temporary hiring across buy-side operations, with job availability decreasing by as much as 15% in some areas compared to the previous years. Hiring in the first half of 2011 was considerably busier compared to the second half. This can be attributed to various factors, such as deteriorating global economic issues and the exhaustion of recruitment budgets.

In addition, the performance of a desk or individual business unit, also in part determines its recruitment activity.

Outsourcing has continued to dominate the operations space for the larger institutions, with businesses looking to reduce costs and streamline departments by sending parts of their back office offshore.

Although early predictions indicated slight increases, rates continued to remain at a constant level throughout last year and early suggestions are that these could remain similar into the first few months of this year. Candidates with strong and consistent CVs, however, are in a better position to negotiate a potential 5-10% increase in hourly rate at offer stage.

 

RATES (PER HOUR)

Role: Analyst /0-2 years AVP / 2-5 years VP / 5-7 years Director / 7+ years
Client Services £12 - £14 £15 - £20 £21 - £25 £26 - £35
Client Reporting £13 - £15 £16 - £20 £21 - £26 £26 - £33
Fund Analyst £14 - £15 £16 - £20 £21 - £27 £28 - £38
Performance Analyst £12 - £15 £16 - £20 £21 - £25 £26 - £35
Fund Administrator £12 - £14 £15 - £18 £19 - £25 £26 - £33
Valuations & Pricing £12 - £14 £15 - £20 £21 - £23 £24 - £31
Data Management £12 - £14 £15 - £18 £19 - £22 £23 - £28
Reconciliations £12 - £14 £15 - £18 £19 - £25 £26 - £35
Trade Support £12 - £15 £16 - £19 £20 - £25 £26 - £37
Cash Management £12 - £14 £15 - £17 £18 - £22 £23 - £30
Settlements £12 - £15 £16 - £20 £15 - £21 £22 - £30

 

Commodities Salaries

Permanent

For the second consecutive year, the middle office and operations commodities permanent jobs market saw a number of flow and reconciliations roles being near- shored by the bulge bracket investment banks in 2011. This led to increased availability of more traditional back office professionals.

Those with an understanding of the physical markets, across energy and metals, were offered considerable pay rises as businesses built out functions. A lack of clarity around economic outlook and less than favourable results throughout 2011 have made it difficult to anticipate where growth will be in 2012.

With costs continually being scrutinised, it is fair to predict that compensation will remain consistent with 2011 figures, where salaries were pushed up to compensate for reduced bonuses. Recruitment is likely to be mainly attrition-replacement based, although hiring managers may take the opportunity to up-skill and re-organise teams at the same time. Significant growth is not predicted.

Regulation around higher capital requirements will make it harder for institutions to acquire physical assets, again negatively impacting a need for new employees. Undoubtedly 2012 promises to be a challenging year for this market.

 

BASIC SALARIES (PER ANNUM)

Role: Junior Mid level Senior
Head of Operations * * £120k+
Physical Energy Trade Support £35k - £55k £55k - £75k £75k - £110k
Commodity Derivatives Trade Support £30k - £45k £45k - £65k £65k - £90k
Clearing £30k - £40k £40k - £60k £60k - £90k
Settlements – Physical £25k - £45k £45k - £60k £60k - £90k
Settlements – Derivatives £25k - £40k £40k - £55k £55k - £70k
Contracts £30k - £45k £45k - £60k £60k - £80k
Documentation (Derivatives) £30k - £40k £40k - £55k £55k - £75k
Collateral £30k - £45k £45k - £65k £65k - £90k
Shipping / Scheduling £40k - £50k £50k - £70k £70k - £100k
Business Analyst £30k - £40k £40k - £55k £65k - £90k
Project Manager * £60k - £80k £90k+
Client Services £35k - £45k £45k - £60k £60k - £80k
MIS / Controls £30k - £40k £40k - £50k £50k - £70k
Trade Finance £30k - £32k £45k - £50k £65k - £70k
Vault Operations £25k - £28k £35k - £45k £55k - £65k
Static Data £25k - £35k £35k - £45k £45k - £65k

 *Typically, these roles do not exist at this level

 

Investment Banking & Brokerage Houses Salaries

Permanent Roles

At the start of 2011 there was renewed confidence in the jobs market following some good results and positive sentiment from a number of key players. There were significant numbers of jobs released and these were quickly filled by a mobile and motivated candidate pool. However, in Q4 there were a number of redundancies across middle office operations as banks focused even more aggressively on location strategy.

In 2012 we expect to see new budgets free up capital to acquire top talent for management and change management positions. We will see the usual resignation- replacement surge for line roles, but we will also see some incremental headcount rises following some houses publicly announcing commitment to growing areas – especially in relation to compliance with increases in regulatory requirements.

Taking everything into account, it is reasonable to expect a busy start to the year, though perhaps not at the same level as 2011. Clearly it will help to be ahead of the game in competing for talent. Banks that were able to source professionals at the end of 2011 and extend offers for acceptance post-bonus season, thus negating the need for buy-outs, will reap the rewards.

 

BASIC SALARIES (PER ANNUM)

Role: Analyst /0-2 years AVP / 2-5 years VP / 5-7 years Director / 7-10 years MD / 10+ years
Trade or Sales Support / Desk Assistants (+ up to £10k for Exotic Products) £35k - £45k £45k - £60k £65k - £85k £85k - £110k £110k+
Client Services (+£5-10k for languages) £30k - £40k £40k - £55k £50k - £75k £80k - £90k £90k - £100k
Documentation / Reconciliations / Settlements £30k - £40k £40k - £65k £65k - £80k £80k - £95k *
Collateral / Margin Management £30k - £45k £45k - £65k £65k - £85k £90k+ £100k+
Clearing (+£10k for OTC Clearing) £35k - £45k £45k - £65k £65k - £85k £85k - £110k £110k+
Middle Office Control / Regulatory Control & Reporting £30k - £45k £45k - £65k £65k - £85k £85k - £120k £120k+
Asset Servicing £30k - £40k £40k - £60k £55k - £80k £75k - £100k *

 *Typically, these roles do not exist at this level

 

Temporary

In 2011 many companies continued to shift their back office operations and processing to both regional and offshore locations. This trend is likely to continue this year as cost reduction remains a key focus. As a result of these previous expenditure reviews and headcount restrictions, a large number of long term contract positions were also created. There has also been growth in niche areas, particularly those sitting within

middle office oversight and control functions. There has been increased demand for operations professionals who are able to demonstrate solid risk awareness and who are able to critically assess and improve controls and processes. It would be prudent for all job seekers to consider how they could add such value prior to any interviews.

Pay rates fluctuated substantially throughout 2011 between banks and have varied by up to 35% in some instances for comparable positions. A number of banks have been forced to reduce rates, typically cuts of up to 10% have been all too common in recent months. Hiring activity should increase in Q1 2012 but recruitment processes will be as competitive as they have ever been.

 

BASIC SALARIES (PER ANNUM)

Role: Analyst /0-2 years AVP / 2-5 years VP / 5-7 years Director / 7+ years
Loans £15 - £20 £18 - £23 £22 - £26 £25 - £30
Client Services £13 - £16 £18 - £24 £22 - £26 £25 - £30
Asset Servicing £15 - £18 £17 - £23 £22 - £25 £24 - £30
Collateral £18 - £20 £20 - £24 £23 - £26 £25 - £35
Reconciliations £13 - £16 £15 - £20 £20 - £25 £24 - £27
Equity / Fixed Income Trade Support £15 - £18 £18 - £23 £23 - £27 £25 - £30
OTC Trade Support £17 - £21 £20 - £24 £24 - £27 £26 - £33
Commodities Operations £14 - £17 £16 - £23 £20 - £25 £24 - £30
Futures and Options Operations £15 - £20 £19 - £23 £23 - £26 £25 - £30
FX / MM / FX Options Operations £14 - £16 £17 - £20 £21 - £23 £24 - £33
Settlements £13 - £17 £18 - £24 £22 - £26 £25+
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henver@morganmckinley.co.uk