Caps on bonuses may be pushing up salaries in some investment banking roles, but pay increases based on buoyant demand in the job market are still currently very rare in the financial sector. However, there are some roles where demand is outstripping supply and financial services firms are willing to hand out double-digit percentage pay rises.
1. Client assets
Compliance is a generally hot area, but client assets – namely ensuring compliance with new Financial Conduct Authority (FCA) rules requiring the segregation of client money from the banks’ capital – is truly a hot area, said Richard Webber, director of recruiters Twenty’s financial services practices and salary rises of up to 50% are on the table.
“Demand is being driven by the need to comply with the regulatory framework – and the fact that so few people have experience of it,” he said. “The requirements are enforced stringently by the regulator and reporting requirements have increased significantly and the correct handling of client assets is a high regulatory priority in the current climate.”
Director level positions have increased from £80k to £120k for those switching jobs, he said.
2. Internal audit
This may not be considered a particularly exciting role, but internal auditors’ role is becoming increasingly complex, which is driver up demand for specialist expertise. Some firms are finding that they need to increase salaries by 30-50% simply to meet the reality of the new job market dynamics, said David Leithead, managing director of Michael Page Banking and Financial Services.
“Pressure from the regulator and from risk functions and firm management is increasing the workload and complexity of the internal audit function and that will result in a lot of hiring in 2013-2014,” he said.
3. Internal risk exposure in insurance
Insurance firms are increasingly making forays into new markets – such as Africa or Latin America – as well as deciding which products will sink or swim in these locations. The result, said Adam Whitehouse, associate director, insurance at recruiters Robert Walters
“This role is very new to the insurance sector with it having never been subject to this level of compliance scrutiny until now,” he said. “Due to the newness of the requirement, certain strategic headhunting is coming into play to attract experience from a very restricted candidate pool.”
4. Compliance consultancy roles
While some banks may not be willing to shell out too much on compliance staff, they are prepared to bring in expertise on a consultancy basis, which is driving up pay, said Webber. Knowledge of European Infrastructure Market Regulations (EMIR) and Foreign Account Tax Compliance rules (FACTA) are particularly in demand, he said.
“Compliance professionals need to be tough cookies, not box tickers in ivory towers. They need to be able to stand up to the sales and trading teams and demonstrate not only their technical expertise but also their relationship management skills,” he said. “That means taking a strategic and business advisory view in terms of not just implementing the regulations but working with business heads to ascertain what the impact of the regulations will be on the business.”
5. Portfolio market risk management
Again, this role is driven by regulatory initiatives, with firms clamouring to hire risk reporting experts to ensure that they don’t fall fowl of the financial watchdogs, said Leithead.
“These teams are new and so there is a shortage of experience in the market,” he said. “Firms can try to hire from the regulators or poach from competitors and either way, albeit for different reasons, the incoming person is going to get a good pay rise.”
6. Regulatory change management
Pay for regulatory change management professionals – namely those helping banks adapt their business models to meet regulatory demands – may not be spiralling, but it’s common for 10% salary increases to be offered to most people moving into a new role, said Russell Hughes, senior manager, Robert Half Financial Services.
“Professionals experienced with anti-money laundering requirements, disclosure or reporting requirements, anti-corruption requirements and Basel III are highly sought after,” he said.