Complinet Salary Survey 2009

Complinet Recruitment is pleased to announce our latest salary survey for 2009. The survey has been compiled from salary data contributed by a number of top financial services recruitment consultants.

Salary survey 2009: compliance officers emerge as rare winners in global financial crisis

By Complinet
March 2009

Compliance officers are surviving the global financial crisis much better than most other City roles, according to a survey of recruiters by Complinet. They are not immune from the fallout, however. Financial institutions from banks to insurers to hedge funds are placing an increased emphasis on compliance and risk management in the realisation that those which survive the crisis will have to prepare for more regulation by governments. As in most current fields of employment, however, it is an employer's market in compliance; the amount of people who are looking for work is greater than the jobs on offer. Employers have inevitably become choosier, and as a side effect the time-to-hire has increased as they see more candidates. Salaries have remained at stable levels and a few lucky performers are able to carry on as if nothing has happened. Perhaps not surprisingly, the most experienced players who are able to apply their knowledge to the prevailing conditions are in high demand.

Richard Aldridge, manager, compliance, at Robert Walters, told Complinet: Prior to Christmas there was a spate of redundancies but with compliance less hit than other functions. However, the market has still been quite 'stuttery' over the last three months.

Aldridge noted that in the larger institutions, back office recruitment has taken second place to front office operations hiring. This is likely to continue until firms can see more clearly how business will progress in 2009 and then allocate resources accordingly. Aldridge said that he has seen increasing roles in central compliance and those which are a mix of operational risk and audit, in particular, the more analytic business review roles which require breaking down parts of the business and stress testing to find risk exposure.

He also noted that people are still getting uplifts in salary but much less than a year or two ago. We're not talking about 10, 20 or 30 per cent of basic salary anymore, people are moving for the opportunity, the culture and location.

Binary bonus effect

Aldridge suggested that bonuses are a very mixed bag. At the larger firms I would use the word 'binary' — in the sense that performers get paid and well looked after and the rest are less satisfied. He said that this was the case at Goldman Sachs and Morgan Stanley, for example, with some of the figures similar to last year's.

Marcus Courtney, a director at Compliance Professionals, said: There are a surprising number of people in the market place — even people who are in work and are still looking although the number of vacancies has 'plateaued'. I think and there are clients who are coming to market with new vacancies at the moment but it is tending to be other areas than investment banks — stockbrokers for example. The big US houses have gone very quiet for obvious reasons.

Courtney believes that employees are realistic when it comes to bonuses. In the worst cases people are expecting 20 per cent of what they got last year but they have been mentally preparing themselves for this over the last six to eight months when they realised the state the market was in.

Fergus Hooley, from Joslin Rowe, questioned whether the bonus pools at the large US banks were going to be adequate to pay decent bonuses no matter how good people were at their jobs. He noted that the binary bonus effect might be more likely at the smaller, more nimble firms, such as quant funds with 50 staff.

While quite a few investment banks have recruitment freezes on across the board, compliance is affected but still reasonably buoyant given the focus on regulatory matters. We've had redundancies for the first time within living memory in the function and as a consequence there are some very good candidates available who in a typical market would not have been around.

Other recruiters said however that there were redundancies among compliance officers during the 2001/03 market downturn.

Hooley added that in firms where senior people have been made redundant, the body of the extra work was probably going to other individuals within the department. Areas that are in demand include control room and surveillance.

He said: I guess that for control room, for example, there are a few high profile cases going through pertaining to insider dealing so this function underpins that and the need for firms to know who is doing what and how they are doing it. There is some anti-money laundering movement at a junior level but not so much at MLRO level. Asset management is really the sector which I would say is moving the most.

He added that, on the whole, the days of gargantuan pay rises and guaranteed bonuses have gone. People are more likely to move on these days because they are more concerned about their company's health rather than for fairly minimal salary rises.

Lower expectations

Another recruiter, concurred that candidates' expectations were far lower than in the past. She has seen people moving jobs for salary increases of 10 or 20 per cent; however, she has also seen others moving for no increase and believes that salaries will stay flat for the year.

Whereas at the beginning of last year we had people saying 'we want a big increase and at least 10k' now they are going in with other motivations such as stability, career progression and recognition — with money coming after that.

She has found that with the more senior roles, including heads of compliance, firms were recruiting at a much lower rate because they knew there were candidates out there who were immediately available and would take a pay cut to get a job.

Candidates are more willing to be open to options that they would not have considered in the past. Aldridge has seen them approaching overseas markets, such as Dubai, Hong Kong, Sydney and New York. Rademeyer agrees that a lot more candidates are asking what is available internationally, such as in Asia.

I even have people living here in London who are looking at regional roles — one senior client at the moment is moving from London to Birmingham — basically people are going wherever the roles are. We have a lot of skilled individuals out there who are frustrated — even contract roles are hard to get.

What lies ahead for the rest of the year?

According to Hooley, consolidation is the key. Things are picking up and headcount freezes will have to be lifted — there will be some activity but nowhere along the lines of 2007/8. We are talking about slow steps forward.

Asked whether he thought the compliance culture needed to change, given the state in which banks have found themselves, he said that it is more to do with risk and internal audit than compliance.

I don't think they could have done differently. It is not compliance that has been at fault — maybe risk or internal audit. In some ways compliance has been involved in a lot in the last two or three years — calls for them to have more independence, the FSA writing its 'Dear CEO' letter to companies and people calling for compliance bonuses not to be linked to the profits of their employer.

A note of caution

Not all City recruiters agreed with the some of the more optimistic findings of Aldridge and Hooley.

David Symes, of Compliance Recruitment Solutions, told Complinet: Middle and particularly senior salary levels are generally facing downwards pressure as the increasing number of out of work candidates at this level since before Christmas are willing to take pay cuts of up to 33 per cent just to secure the next role.

Symes said that this was the first time that he had seen redundancies in any volume since the 2001/3 downturn. He also noted that demand had eased off and that not even the Gulf offered the open door previously seen.

This is partly because most firms which wanted to establish a base there did so by 2007 and partly because not only has Dubai been affected by global events but the long awaited property crash has well and truly arrived. This has had a direct impact on financial institutions, some of which are consolidating or merging their activities.

A. Investment banking, wholesale markets and broking

KEY

* For compliance administrator, i.e., where around 50 per cent of time is technically based, consider under this category.

** Only if purely specialist role, i.e., not combined with other general compliance duties.

*** IT systems-based relates to roles frequently based in middle office operations using IT to enforce or monitor compliance driven requirements.
**** This is both for roles within compliance or operations; however, if experience gained as part of broader compliance career consider under main categories.

MAIN ASSUMPTIONS AND NOTES

SECTOR CATEGORISATION

Private clients

Please note that private client and wealth management divisions should be considered as follows:

If specific product knowledge needed, then for derivatives and/or structured products under A; for collective investment schemes under B; for life and pensions products under D or E.

Otherwise under the main categorisations (i.e., if a stockbroking firm or wholesale bank A, asset manager B or retail bank/IFA then D or E).

Corporate and retail banking inc. building societies

Head office roles, i.e., technical and policy, marketing or monitoring If combined with treasury and wholesale banking activities (including corporate finance and trade finance) please consider under A above but if only corporate and retail banking, consider under D.

Branch or local monitoring: Consider under E above.

Money transfer firms (or similar)

As this sector forms a specialist part of the main corporate and retail banking system and roles within mainly require AML experience and knowledge, they should be considered under the AML functions within D & E.

Accounting, legal and other professional services/consultancies

Fee earners: This survey can make no attempt to categorise fee earning staff aside to state their basic remuneration should be related to their general market worth relative to level of experience and sector specialism as in rest of survey however given the number of other factors (e.g., directly relevant professional qualifications if accounting or law firms etc, business development expertise and success, personal reputation etc.,) there is unlikely to be a direct correlation.

In-house compliance and AML: These roles tend to require a combination of AML/KYC, conflicts and specific sector knowledge (e.g., Solicitors Regulatory Authority) thus would best be considered under the AML categories of sector A (though adjusted upwards if role requires e.g., qualified accountant or lawyer to be able to offer transactional support etc.,).

In-house private client advisory (PWM/IFA); Consider in line with one above.

II. POSITION CATEGORISATION

There will always be titles in certain companies outside the above guidelines — overall the aim is to categorise lower levels by years of experience and executive levels by responsibility held — however common sense is required at all times in the above, e.g., a head of compliance without staff in a small company may get paid less than a junior compliance manager in an investment bank.

If a role is purely that of a specialist alongside compliance staff then consider under specialisms, however, if part of a mainstream role that includes specialisms then still consider under mainstream compliance, e.g., 50/50 compliance and AML work (or head of compliance but also MLRO) NB financial crime roles should be considered under AML (with premium if qualified accountants or lawyers needed for forensic work).

To avoid unnecessary complexity, there is no emphasis on functional splits within mainstream compliance, e.g., whether mainly monitoring or technical etc. NB If prior to full time compliance role a candidate has extra related experience then some or all of those years/period should be taken into account, e.g., for technical and policy roles, previous financial services legal experience or for monitoring roles, previous internal or larger firm external audit experience.

III. ADDITIONAL NOTES

Please note that any category marked N/A has been considered to have insufficient standalone positions for responsibilities within these sectors to justify inclusion.

• Advertise
• Search profile
• Salary survey
• Jobs by email
• Interview tips
• A-Z Advertisers

• Compliance news
• Recruitment news