Compliance Market Update
Black Swan Group Market Update 2012
The continued market uncertainty has kept Compliance at the forefront of all businesses minds. With programmes to implement new regulation such as the RDR, Dodd-Frank and Anti-Bribery acts getting underway over the last 12 months we are set to see continued movement in this area for Q1 and Q2 in 2012. Other areas such as MiFID 2 and Basel 3 are expected growth areas for 2012 and beyond.
As seen in recent times, more hybrid roles have come to market in 2011 with examples bridging the gap between Compliance, IT and Operations. Roles between Compliance and Operations have focussed on the Client Money and Transactional Reporting areas which again have been hot topics on the regulators watch-lists. With the FSA still handing out fines in relation to CASS and transactional reporting requirements, roles in this area are set to have a greater importance moving forwards.
The last 9 months of the year saw some high profile hires in the market at the senior level which wasn’t an area of much movement throughout 09/10 showing confidence returning as firms beef up their compliance offerings. With top level personnel changes at large global institutions there will no doubt be a stage of growth and change underneath them throughout 2012. Along with the senior changes there has also been a growing trend of director level candidates within Investment Banks making the move into boutique houses within the hedge fund and Private Equity space where there can be more autonomy and ownership of functions.
AML continues to be in demand across all markets but the product advisory space has once again been busy with, Equities, Fixed Income and commodities all being in equal demand. A key area which has been particularly short of talent has been those people with Exchange Traded Derivatives experience at the VP level with live searches still on-going in a number of houses.
One of the highest profile impacts on the market this year has to be the bankruptcy of MF Global in October. With their close ties to many houses things are set to be winding down with their business until April 2012 with KPMG on-site to assist with this task. This market change has flooded the recruitment space with some strong candidates, particularly within the Compliance arena where the function had grown rapidly in 2011. Key personnel have been kept on to assist with the wind down and will be trickling onto market over the first 6 months of 2012 as MF Global is wound down.
With 2011 being seen largely as a year of 2 halves, some houses started to take stock of current market situations in late 2011 and batten down the hatches on recruitment. Compliance has remained relatively buoyant as many hires are regarded as “key” to the day to day operations. Despite recent market conditions Compliance does look set for growth in 2012, that said, candidates must remain realistic on salary expectations in this time of austerity.
The industry is once again in an uncertain position in relation to how to structure compensation packages, with some opting for a higher basic or including a fixed payment and others staying with the more traditional ‘total comp’ focus. It is unsure where bonus levels will lie for 2011 with houses showing smaller profits as well as making redundancies – predictions generally seem to be that levels will be down 20-30% on 2010. With the current euro debt crisis 2012 looks like a year of uncertainty, fortunately though, compliance will be a major force in helping to reshape the financial markets through 2012 and beyond.
