Investment Banking Compliance – H1 2016 Market Update

Written by Chris Roots on 23/08/2016

Market Overview

 The first half of 2016 has seen some major regulatory and political changes which have impacted the London Compliance recruitment market.

 Following the EU referendum on the 23rd June and resulting vote to leave the EU there have been mixed signals from Investment Banks. Before the referendum a number of firms including JP Morgan, Citigroup, and Goldman Sachs indicated that they would move jobs abroad in the event of a vote to leave. Since the vote banking heads have in most cases taken a softer stance indicating they would wait for the UKs negotiations with the EU before making any major decisions, with passporting a key issue.

 This ‘wait and see’ policy has translated into what we are seeing in the market with a 33% reduction in Investment Banking Compliance roles released between January and July, compared to the same period last year with some firms not releasing any roles externally in the first half of the year.

 That being said we are still seeing major investment in key hires. Particularly advisory, monitoring and surveillance. MIFID II is also well underway with the second consultation paper released at the end of July. In what is traditionally a candidate short market 2016 has not been an exception with the competition for A-grade candidates for these key hires continuing to put upwards pressure on salary expectations. In the current climate job security is also a primary concern with candidates looking for reassurance that roles and wider businesses are stable in the near term.

 Market Trends

 Advisory

 There has been a shift in markets trading towards electronic trading in the past 18 months and we have seen a corresponding increase in demand for subject matter experts. Several institutions have restructured to form dedicated electronic trading compliance teams and with Hedge funds also looking for this skill set the demand for top quality candidates is extremely high.

 Fixed income also continues to be an area in short supply with alternative backgrounds in legal, and surveillance particularly becoming more commonplace.

 Conduct, Monitoring and Surveillance

 With both the Senior Managers Regime coming in to force on the 7th March increasing accountability for senior management and the EU Market Abuse Regulation (MAR) coming into effect 3rd July extending requirements in relation to inside information and market abuse. There has been a concerted effort to bring in the right talent in areas that proactively support the conduct agenda, we have seen a 37% increasing in hiring for VPs and above in monitoring and surveillance compared to the first half of last year.

 Costcutting

 Another theme of 2016 has been investment banking institutions continuing to cut costs during the first half of the year. There have been high profile examples of Banks exiting or on/near/offshoring non-core businesses, or business units. Clients are as a result looking for candidates who are flexible in terms of location.

 This cost cutting is also something that has impacted the recruitment process with far greater effort made to recruit talent internally or direct. Job lists are circulated internally and far greater flexibility considered in terms of the background of internal candidates.

 Compensation

 We have seen a shift in priority to base salary and pension in the first half of the year than previously. With bonuses in general down in the past year, total compensation has been less of a component of candidate’s decision making process. Base salary increases, and pension contributions factoring heavily in negotiations.

 We are also already approaching the point in the year where new joiners will not be entitled to bonuses.

 Overall

 Compliance continues to be a growth area for recruitment in relation to the wider job market. In a speech by Jonathan Davidson, director of Supervision at the FCA, delivered on 12th in relation to Conduct and Culture he said-

 More and more firms are forming the view that a strong conduct culture which builds consumer trust in firms and markets and inspires employees is in the economic self-interest of the firms and their shareholders.’

 More than ever current market conditions require active headhunting, endorsement and referrals for us to secure top talent for our clients. As a candidate we are keen to discuss where the opportunities are and how best to position yourself in the current climate.

 If you are a candidate or client and require further information please contact Chris Roots at chris.roots@blackswangroup.com or 02033018714

 Chris Roots

Compliance Consultant

 

 

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