Europe's banks draw in accountants
Investment banks across Europe are eager to hire accountants, and are paying more to do so.
City of London: Shortage of talent promotes flexibility
A survey of 450 candidates and 200 banks by Morgan McKinley, the middle and back office recruitment firm, found salaries for some accountants working in UK banks rose 20% during the past year. Accountants with between three and five years post qualification experience can now earn between 60,000 and 80,000 per annum.
Richie Holliday, a director at Morgan McKinley, says demand is strongest accountants to work in product control roles, particularly those related to structured fixed income products, such as credit derivatives.
Jonathan Morgan, business manager at Hays Accountancy and Finance in the City of London, confirms the trend. 'There's massive demand for accountants', he says. 'Last year people with two years' post qualification experience were on 55,000 to 60,000. This year they're looking at 60,000 to 65,000.'
The ideal product controller is ACA qualified with prior knowledge of derivative products. However, Holliday says a shortage of suitable candidates means banks are increasingly prepared to compromise: 'Banks are taking quick learners with first time ACA passes but no derivatives knowledge, and training them up.'
Higher pay is not the only method used to lure accountants into banking. Morgan says some banks are making it easier for product controllers to move into front office jobs like trading. He says banks are also expanding the roles of product controllers to include trade valuation and deal analysis; mundane tasks like reconciling trades and calculating P&Ls are increasingly automated.
France and Germany: Product controllers needed
Accountants are equally sought after by banks in continental Europe. Martin Dixon, director of Hays Accountancy and Finance in France, says demand was flat for the past few years, but has spiked in the past few months: 'The big French banks are recruiting more controllers this year.'
Klaus Robert Biermann at Michael Page in Frankfurt, reports a shortage of junior product controllers: 'We're looking for a lot of candidates with a mathematics background and a good understanding of quantitative methods. After insufficient hiring in 2002 and 2003, there's a lack of people with two years' experience.'
Biermann says German banks favour graduates of top schools such as the universities of Mannheim, Münster and Cologne, the European business school and Hochschule fuer Bankwirtschaft (HfB). Product controllers with two to three years' experience working alongside derivatives traders in Germany can earn up to €85,000 in Frankfurt, he says.
By comparison, pay in France is relatively modest. Dixon says product controllers in Paris with one to three years' experience typically earn €45,000 to €60,000, plus a nominal bonus. 'The French underpay their finance people', he says.
Investment banking careers for accountants:
Product controllers: ACA qualified product controllers work alongside traders to monitor and restrict the risks the bank is exposed to through trades. Similar to traders, controllers typically specialise in a particular class of financial product. After five years Hays says UK-based product controllers can earn 91,000 plus; after nine years, Morgan McKinley puts pay at up to 250,000. Opportunities to move out of banking are limited.
Management Reporting: Management accountants provide managers in banks with information on the state of the business. Their information enables managers to formulate strategy based on knowledge of risks and budgetary constraints. Management accountants in the UK can be CIMA or ACCA qualified. After five years, Hays says UK-based management accountants in investment banks can earn 80,000 plus; after nine years, Morgan McKinley says they're paid up to 220,000. It's possible to move from a management accounting role into a role as an accountant in industry.
Financial Reporting: Typically ACA qualified, financial reporters are responsible for producing monthly and year end accountants, and fulfilling the reporting needs of the Financial Services Authority (FSA). After five years Hays says UK-based financial accountants in investment banks can earn 80,000 plus; after nine years, Morgan McKinley puts pay at up to 220,000. From a job in financial reporting, it's possible to move into an accountancy role in industry.
Systems Accountant: Systems accountants in the UK are typically ACA, CIMA or ACCA qualified. They typically help a bank unify its accounting systems. After five years Hays says UK-based financial accountants can earn 80,000 plus; after nine years, Morgan McKinley puts pay at up to 225,000.
Operational Risk: Internal auditors can move into operational risk roles in investment banks. Operational risk specialists are responsible for quantifying and limiting the risk of something going wrong in the course of day to day business. An operational risk specialist with nine years' experience can earn up to 220,000 in London, says Morgan McKinley.
