Compliance is hot. JPMorgan has been investing in compliance and control staff. So has HSBC. The Financial Times reported this morning that compliance pay has increased by up to 100% since the start of the financial crisis. So, what's not to like?
This is why you might not want one of the many compliance jobs on offer in the City of London...
There are compliance jobs, and there are compliance jobs. Not all are equally exciting.
The really scintillating compliance jobs are the so-called 'compliance advisory' roles, where compliance people sit on the trading floor and provide erudite advice on products that conform to ever-changing regulations. Gail Danvers at recruitment firm PSD Group says mid-ranking compliance advisers in London can earn up to £150k ($242k) and are highly sought after.
So far, so enticing. However, according to recruitment firm Morgan McKinley's most recent monthly compliance update, compliance advisory roles only account for 25% of the jobs on offer in the City. Instead, Morgan McKinley says 32% of jobs are related to anti-money laundering and another 32% are related to compliance monitoring. Both are process-oriented roles. "I know a lot of people who would say they love compliance monitoring, but the sexy side is definitely advisory," says Danvers. You have been warned.
You might think that banks are so desperate for compliance talent they'll hire anyone with knowledge of financial products and financial regulation. You'd be wrong. Banks only want to hire people who have actual, proper, compliance backgrounds.
“Clients are very particular about who they’ll hire for compliance positions- they want direct comparable experience, which can be hard," says another senior compliance recruiter. "There’s often an acute shortage of people and the candidates they’re looking for either don’t exist or will only move for a large sum of money.”
PwC says pay for compliance professionals has risen by 50-100% since 2008. That's an exaggeration according to compliance recruiters. Danvers says it's up 30%. Another recruiter says there's been a big increase, but that to say it's doubled would be an untruth.
Don't assume that compliance jobs are nice relaxing alternatives for traders who want to downsize. As Hector Sants' state of exhaustion suggests, they are in fact very stresful. Expect to be patronised by traders. Expect to work on teams that are seriously understaffed. Compliance is not an easy ride.