Regulatory Compliance
Market overview
The volume of regulation coming downstream remains high, and therefore the need to hire top-tier talent continues to be business-critical.
On the buy-side, regulations such as Investment Firms Prudential Regime (IFPR) and Environmental, social, and governance (ESG) have kept compliance teams busy. Therefore there is a need to hire technical candidates who can not only deliver on specific regulatory initiatives but also manage the BAU requirements within the group. Within tier-one investment managers, the demand for strong compliance advisory professionals remains high, with the competition and subsequent salaries of candidates operating in investment or distribution compliance increasing rapidly. However, some prestigious asset managers have struggled during 2022, which has been reflected in some high-profile and high-volume redundancies within the asset management space.
In contrast, it has been an extremely lucrative year within private equity, and debt houses and teams have continued to grow. Outside of a few more established compliance teams within the private markets space, teams have been historically small. Still, they are growing significantly as firms increase their compliance offering in line with business growth strategies.
Therefore, there has been a considerable demand for strong generalist compliance candidates from private markets firms, demonstrated in the 33% salary increases that these candidates have averaged during 2022.
Two areas of the market have been particularly buoyant during 2022.
Rapidly growing firms in the $0-5bn Assets under Management (AUM) level have been looking to bring compliance in-house for the first time and appoint their first SMF16/17, purely compliance focussed. This has increased demand and created an opportunity for individuals looking to transition their careers towards holding the SMF16, whilst they may not have had that opportunity with their current employer.
There is still a significant demand for compliance professionals within Alternative Investment Fund Managers (AIFM) in Luxembourg. The talent shortage in such locations means demand and salaries are equally high.
We have supported a range of fund managers with building their risk and compliance framework in such locations over the past year.
On the sell-side, the battle for the highest quality talent remains at AVP / VP level, with some key areas reflecting the highest demand. Product advisory remains the area where firms struggle to hire and retain the best talent, as there is certainly no shortage of opportunities in the market. The FICC compliance space has been bustling this year. In contrast, there has been less hiring and fewer opportunities at the Director level end of the market. A combination of low attrition levels and minimal growth hire at this level have resulted in little movement at the Director level and above.
Harry Warwick
Director