Senior compliance hires offer hope of upturn in job market

A spate of senior level moves in investment banking compliance jobs has placed a spotlight on an area that has been suffering from more hype than activity.

The arrival last year of a new regulatory regime for the UK financial services industry raised expectations of increased hiring, but activity has been lacklustre until now.

Headhunters suggest that activity in this sector may be at last picking up, but an uncertain job climate and widespread pay disparities mean that everyone is watching everyone else, often still unsure whether to commit to a new employer or employee.

Hiring freezes are being lifted gradually, headhunters says, and investment banks such as Merrill Lynch and Lehman Brothers are said to be making job offers in compliance. Significant moves within the US firms have created gaps in the market that need to be filled.

Peter Haines has moved from UBS Warburg to Bank of America to be European head of compliance, and UBS has advertised the resulting vacancy. ABN Amro lost Georgina Robins, its global head of equities compliance, to Prudential Bache. Internal reshuffles there have filled the gaps.

When John Mack took over last year as CEO of Credit Suisse First Boston (CSFB), he brought with him Stuart Breslow in compliance from Morgan Stanley. Since then, Lionel Smith has been hired from Morgan Stanley as head of compliance UK, as has Anthony Eastwood as head of compliance non-UK.

Restrictive covenants in place have meant that the Morgan Stanley hires have not been made as a team. However, the arrival of Graeme Russell from Morgan Stanley as European head of compliance at CSFB after Breslow's hire is being seen by one headhunter &quotas a mandate to further grow the department and get it ship-shape.&quot

The spate of hiring at CSFB has caused some internal fall-out. Russell's hire came just before the very recent departure of Vaughan Edwards, CSFB's deputy head of compliance. He has not yet surfaced elsewhere.

&quotRussell is a lawyer, and his hire reflects the trend to appoint more lawyers to senior compliance roles to cover the risk of litigation. For a firm like CSFB, getting him on board was seen as a necessity worth the price,&quot says the headhunter.

Possibly the first high-profile move of a lawyer into a senior compliance role came two years ago at SSSB when Peter Maskrey, head of the legal transaction structuring group, moved over to cover compliance.

&quotSenior management (at the big investment banks) is beginning to see compliance as a very important, potentially very public, area,&quot says another headhunter.

Compliance appears to be becoming a profession in its own right in the UK and Europe, according to the recruiters. Whereas in the US compliance has a history dating back to SEC legislation in 1922, the UK's experience is very recent. It has been broadened by the introduction last year of the N2 regulatory regime, under the Financial Services Act.

One headhunter says: &quotSalaries at the top can be very competitive with other sectors. For a global head of compliance you could be looking at as much as 600,000 including a bonus, while a European head of compliance might get 400,000.&quot

But few predictions on compliance salaries can be made. At Alexander Mann Global Markets (AMGM), Malcolm Hill, who heads the compliance search team, says: &quotCompliance salaries tend to be very varied, so our clients always want information on compensation. Mapping is very much on the increase - of individuals as well as organisations.&quot

Hill says the pay disparity exists primarily on the bonus front, and the US houses are not always the largest payers of bonuses. &quotThe European houses have boosted bonus payments in compliance in the front office,&quot he says.

But employees don't always move for money. They are interested in the career profile on offer, says Hill. At the moment, those with 10-15 years experience have high visibility and can sit and wait for the right opportunity. &quotThe budgets aren't there yet at most financial institutions to offer silly money, but there is upward pressure at the senior end of the market,&quot says Hill.

He adds that many people who work for the regulator, the Financial Services Authority (FSA), seem eager to jump ship to the commercial sector, to increase their pay. Hill says: &quotThe number of people looking to leave the regulator is really quite amazing. With four to five years experience they earn (only) between 40,000-45,000 with a possible 5% bonus.&quot

But he concedes that a job in compliance with the FSA has many non-cash benefits, such as a limited working day, long holidays and no commercial demands on staff.

In reality, at the 40,000-50,000 level, it is proving difficult for headhunters to get candidates for compliance jobs to jump ship. This salary level is typical for the job title 'compliance manager' or 'compliance officer', depending on the institution.

Steve Meredith of the recruitment consultancy CPG (Centre Point Group) says: &quotIt is very difficult to get people to move at the moment. Compliance people are very cautious anyway - when they come to see you, they skulk.&quot

In the last few weeks CPG says it has taken on many vacancies in compliance positions, and has been advertising for compliance managers for City-based fund managers. Meredith says a future hunting-ground for compliance may well be among law graduates who decide that they do not want to go into law.

An accounting qualification can also be useful for a career in this sector, says Howard Foster, who heads search in compliance at financial services headhunter Hoggett Bowers.

The jobs are certainly out there. For example WJB Chiltern, the accountancy search firm, recently ran an advertisement for an accountancy client for two senior roles in compliance and corporate governance, earning between 85,000 and 100,000 a year.