More jobs, higher pay, but post-crisis boost is limited
The job market for compliance professionals is picking up. But the high fines and complicated investigations financial services firms face as regulators and enforcers sharpen their scrutiny after the 2008 financial crisis have had a limited impact on compensation trends, boutique recruiters and global firms told Compliance Complete.
Average starting salaries in a broad range of financial compliance positions rose 2.3 percent to 4.2 percent in 2013, according to figures from Robert Half, an international recruitment firm. (See chart) That compares with about 3.4 percent among financial professionals as a group.
“Hiring has gone up across the board … from senior level to junior level and everything in between,” said Jack Kelly of Compliance Search Group in New York.
“Some of it is due to new regulations like the Volcker Rule and new rules for swaps trading, [and] some of the hiring is in response to the backlash to insider trading, currency manipulation and AML sanctions. If you’re the executive of an investment bank, broker-dealer and investment adviser that is in the hot seat with the regulators, there is no choice but to show regulators that you’re doing everything you can to fix the deficiencies,” Kelly added.
“New rules, enforcement actions … are pushing firms to go out and increase their staffing. It’s going to keep on going,” he said.
But that doesn’t mean firms will make overly rich offers except in the most unusual cases, Kelly said. “On the one hand [firms] have a strong need to hire but on the other hand they are hampered by budgets. … They don’t want to be throwing a blank check at people.”
Compliance salary breakdown
|Title or Function||2013||2014||Increase|
|Internal Auditor – Manager||$83,500 – $117,250||$87,500 – $121,000||3.9%|
|Internal Auditor – 3 to 5 Years||$63,000 – $80,500||$65,250 – $84,250||4.2%|
|Internal Auditor – 1 to 3 Years||$49,750 – $66,500||$51,500 – $69,500||4.1%|
|Regulatory Reporting – Manager||$86,750 – $110,750||$89,250 – $114,500||3.2%|
|Regulatory Reporting – 3 to 5 Years||$66,000 – $84,750||$68,000 – $87,500||3.2%|
|Regulatory Reporting – 1 to 3 Years||$52,000 – $66,500||$53,750 – $68,500||3.2%|
|Financial Analyst||$50,500 – $73,500||$52,500 – $76,750||4.2%|
|Tax Accountant||$53,000 – $72,500||$55,000 – $75,250||3.8%|
|Chief Risk Officer||$142,500 – $218,000||$148,000 – $225,000||3.5%|
|Market Risk Analyst – Manager||$90,250 – $126,750||$92,000 – $132,750||3.6%|
|Market Risk Analyst – 3 to 5 Years||$67,250 – $88,500||$69,000 – $92,250||3.5%|
|Credit Risk Analyst – Manager||$86,500 – $112,750||$90,000 – $116,250||3.5%|
|Credit Risk Analyst – 3 to 5 Years||$61,000 – $82,250||$63,000 – $85,250||3.5%|
|Operational Risk Analyst – Manager||$85,000 – $109,000||$88,500 – $112,250||3.5%|
|Operational Risk Analyst – 3 to 5 Years||$62,500 – $80,500||$64,500 – $83,500||3.5%|
|Chief compliance officer (CCO) large firm||$149,250 – $220,500||$154,500 – $229,500||3.9%|
|CCO, midsize firm||$121,750 – $168,750||$126,000 – $176,000||4.0%|
|CCO, small firm||$102,500 – $132,750||$106,500 – $138,000||3.9%|
|Compliance Officer, Large Firms||$94,500 – $126,750||$98,500 – $131,500||4.0%|
|Compliance Officer, Midsize Firms||$83,750 – $113,000||$86,000 – $118,500||3.9%|
|Compliance Officer, Small Firms||$69,750 – $92,750||$72,000 – $97,000||4.0%|
|Compliance Manager, Large Firms||$80,750 – $104,000||$83,250 – $108,500||3.8%|
|Compliance Manager, Midsize Firms||$71,500 – $93,750||$73,750 – $98,000||3.9%|
|Compliance Manager, Small Firms||$63,500 – $82,500||$65,750 – $86,000||3.9%|
|Compliance Analyst||$50,250 – $77,250||$52,750 – $79,750||3.9%|
|Anti-money laundering (AML) Specialist||$65,500 – $88,500||$68,500 – $92,000||4.2%|
|Fraud Investigator||$64,000 – $85,500||$66,250 – $88,000||3.2%|
|Regulatory Affairs Specialist||$63,250 – $88,500||$64,250 – $91,000||2.3%|
– Source: Robert Half 2014 Salary Guide
AML at the top range
Among compliance jobs, anti-money laundering specialists earned at the high end of the range, while fraud investigators and regulatory affairs specialists got slightly less, according to the Robert Haft survey. The survey covered all of the United States and addressed multiple business models. Compensation offers in higher-cost localities and newer or higher-risk specialties will likely be at the higher range, if not more, for the most qualified candidates.
Graduate degrees or professional certifications can add up to 10 percent to the base pay, and the survey averages generally do not include discretionary bonuses, the firm added.
AML is an “evergreen space,” Kelly said. “There is a continual need for AML people at all levels.” Noting that BNP Paribas warned last week that it may face over $1.1 billion for sanctions violations, he said, “They will have to start ramping up their hiring, but everyone else [facing similar areas of potential risk] is looking at them and thinking they too will have to start hiring.”
Despite its importance to firms, many AML jobs are not high-profile or high-paying, Kelly added. “A lot of the work is hands on, looking at SARs [suspicious activity reports] or making sure that wire transfers are not violating the rules.”
Senior positions like chief compliance officers can get guaranteed contracts with discretionary bonuses but lower-ranking executives often don’t get a guarantee, Kelly said.
Compliance pros looking for more pay or visibility should present targeted experience and specialized knowledge if they hope to realize their goals, and some of the best jobs also require thinking outside the box by having high-level mathematics degrees or project management expertise, recruiters said.
Math and science experts
The highest pay is for math and science experts building complex Wall Street risk models and trading algorithms, followed by regulators at the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Financial Industry Regulatory Authority and the National Futures Association, the recruiters said.
Regulators at compliance conferences have confirmed that they have been hiring experts from the industry, who then try to watch their former peers’ every move for signs of misconduct, or undetected or inadequately disclosed risk.
Financial firms are competing for these quantitative-skilled candidates for compliance positions, but they do need people who can “at least understand and keep up with the sophisticated technology,” Kelly said.
“In a perfect world [firms] would want someone with a math background. If you don’t have that, they would look at [your] academic background … to see whether you’re smart enough to try and keep up,” he added.
Tight budgets keep a lid on
Stuart Rosenthal, managing director of New Jersey-based Rosenthal Recruiting, like Kelly a compliance-focused recruiter, agreed that tight budgets are keeping a lid on the job market. “The budget is still the main driver of compliance hiring … Companies are sticking hard to their budgets and not many of them are willing to pay too much for compliance roles.”
The budgets, which are often controlled by the firm’s chief financial officer, are generally tight, he said. “Sometimes there is wiggle room on salaries but a lot of times banks leave the position open for many months.”
The challenge for firms is that regulators have been saying for years that they look askance when they see unfilled compliance positions at firms facing enforcement actions or otherwise remediating deficiencies.
“A lot of hiring is being done when firms are at the wrong end of an enforcement action and they need to hire people to fix deficiencies. Some of these hires are short-term contractual positions that last for two years,” Rosenthal said.
“At other times [hiring results from] the sheer demands of complying with a multitude of regulations,” he added. That has made the Volcker Rule and the Dodd-Frank Act in general key drivers of compliance hiring.
Rosenthal also questioned the extent of the rise in overall hiring, saying. “The mass hiring being done by the biggest banks … could be skewing the numbers for the industry as a whole.” JPMorgan Chase & Co, HSBC and Barclays are among major firms announcing compliance hiring sprees in the wake of headline-grabbing enforcement actions.
More employers now want candidates who can fill project management roles that combine information technology skills with compliance experience, Rosenthal said. That is especially in the AML area, where banks are looking through masses of documents for evidence of suspicious activity.
“For a lot of roles, firms want very specific skills and very specific experience. For example, firms recruiting a compliance officer for Dodd-Frank regulations want someone who can cite verbatim the different rules under the act. The same applies for AML work,” Rosenthal said.
A CCO at a broker-dealer, one level below the biggest investment banks, could get up to $750,000 a year, while a mid-level compliance officer with five years’ experience could get between $90,000 and $150,000 and a junior officer from $50,000 to $150,00, with most of them in the $90,000 to $120,000 bracket, Rosenthal said. Bonuses, which are discretionary, vary and are negotiable, he added.
“The key depends on who is controlling the budget. … Some companies are flexible about salaries when hiring new compliance staff. They don’t always want to set a budget for hiring. Instead they want to get the best people and pay close to market rate for them. Quite often companies will do an analysis of what the best people are earning in the market and come up with a figure to match that,” Rosenthal said.
Much of the ramp-up in hiring that resulted from the new rules and enforcement actions is already in place, Rosenthal added, saying that he doesn’t expect much of change in the next six months.
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This article was produced by Thomson Reuters Regulatory Intelligence, and written by Emmanuel Olaoye and Stuart Gittleman.
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