Salary Survey: Managing risk means more reward
High profile corporate failures and geopolitical uncertainty may be bad for business, but they are good news for risk managers in investment banks and asset managers on both hiring and pay fronts.
Hiring in risk management has been up this year, with most staff receiving guarantees. Demand for staff has driven up salaries, particularly for mid- to junior-level staff. In a survey of 50 risk professionals working in London, search firm Sheffield Haworth found associate vice presidents working in risk now earn base salaries of 60,000 to 65,000 (€86,000 to €93,000).
'Banks have been hiring across the board', says Adrian Marples, senior consultant in risk management at Sheffield Haworth, 'About 75% of people have received guaranteed bonuses.' Marples says this is 10,000 higher than 18 months ago.
However, the outlook for bonuses is less promising. More than 50% of respondents expected bonuses to be similar to last year.
Banks that have hired risk professionals in 2004 include JP Morgan, Citigroup, Bank of America and Barclays Capital. BarCap has boosted its risk management teams in both London and New York.
Fund managers and hedge funds have also leapt aboard the risk management bandwagon. For example, Insight Investment appointed its first ever chief risk officer in July. In May, Permal Investment Management, a fund of hedge fund, poached Julian Shaw, global head of risk management at Barclays Capital.
Recruiters say front office hiring and new regulations like Basel II are the main drivers behind the hiring spurt. 'Institutions like Barclays Capital have bought big sales and trading teams in derivatives products and subsequently built up the supporting risk functions,' says Clodagh Nevin, a risk specialist at Michael Page.
Nevin says credit risk specialists have seen their status rise this year, along with their salaries. Market risk specialists, who work with traders to establish the riskiness of trades, used to be the best paid people in the risk universe, but Nevin said some credit risk specialists working in derivatives business areas have caught up with them.
