The FSA is already struggling to hold on to staff, but it’s a little ironic that new, more lucrative, jobs created within consultancies working on external investigations on behalf of the regulator could see yet more people depart.

Both Big Four and more niche consultancies are building their risk and regulation teams ahead of an expected surge in section 166 orders from the FSA. Working for a consultancy can be relatively lucrative: these roles tend to pay 90-100k at manager level, 200k for directors and anything upwards from 400k for partners, according to risk recruiters.

“Demand for specialists to conduct these investigations will increase in the near future,” says John Liver, partner in the risk and regulatory division of Ernst & Young. “We’re building our team, as are other Big Four firms. Generally, we would look to experience in other large consultancies, more niche providers, the regulator itself or the risk and compliance divisions of banks and other financial services firms.”

Considering the pay differential, poaching staff from the FSA could prove easy pickings.

Salaries at its enforcement division have increased, but stood at an average of just 53.2k in 2010. Managers within its regulatory division can expect anywhere between 65-118k, rising to 95-200k at the very senior end. Within risk, senior roles pay between 87-170k, but junior risk analyst salaries can be as low as 28k.

So far, the number of S166 orders issued by the FSA has been quite small – just 88 in 2009/10 (the latest available figures). Liver says this figure will increase to “hundreds” in the coming years as the regulator increasingly bares its teeth, says Liver.

If an S166 order is issued, the FSA deploys an external third-party to conduct a ‘skilled persons’ report into a financial services firm’s activities. These investigations can be anything from checking the robustness of internal risk management systems, to looking into a bank’s capital adequacy to a more in-depth review of any previous regulatory concerns.

Historically, the Big Four firms have carried out around half of S166 investigations, but smaller companies are getting in on the act. Financial services consultancy Capco has just launched a specialist Section 166 division, and intends to build it out in the future.

“We have hired specialists in risk and compliance with the experience and in-depth knowledge required to conduct S166 reports,” says Steve Vinnicombe, partner at the firm, adding that it would recruit more if the expected demand for S166 services picks up.

Deloitte, Ernst & Young and KPMG are also all building their financial services regulatory teams, who are responsible for FSA enforcement investigations.

So what does it take to break into this area? Liver says that they look for a “balance” in the team; employing a mix of regulatory, risk and audit experts. However, softer skills are also a must.

“There’s an element of relationship management required in the role; you’re not only the key stakeholder in these investigations, but also essentially the company’s client,” he says. “These investigations don’t necessarily indicate a problem at the firm, but you’re still entering quite a tense environment where your presence isn’t exactly welcomed.”