Is Compliance a Path to Investment Banking Jobs?

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With all the pressure put on Wall Street by Sarbanes-Oxley and other regulations, some candidates wonder whether a position in compliance can be a launching pad to the investment banking side of the house. Recruiters say think again.

"I don't think that is a plausible approach," says Brian Drum, president and chief executive of Drum & Associates, a recruiter in lower Manhattan that is presently seeking candidates for several compliance positions. "People who have a compliance background have a different skill set than bankers."

Compliance personal tend to have a legal or accounting background, Drum notes. While plenty of people with law degrees have become successful bankers, what the investment banking world prizes most are business and analytical skills and, more importantly, extensive contacts that can help land a firm advisory business. Compliance, by its nature, is an internally oriented function.

"I personally have not seen people go from the compliance side to the investment banking side," Drum says. "It might be possible at a small firm, but I don't think it's probable at a large firm. Large firms are more specialized. A small firm might need more of a generalist."

However, Drum adds, "Having said that, we do live in a world of building relationships, and if you build relationships internally with the investment banking side of the house you might be able to make a move."

In short, if a compliance staffer was able, over time, to demonstrate the attributes bankers prize, and develop a relationship with a mentor in a position to hire on the banking staff, it might happen. But assuming compliance is an avenue into investment banking is a weak strategy to count on.

A spokesman at JPMorgan notes that a more likely path for moving into banking is out of the research department. Many stock analysts have become valuable members of investment banking teams because they can offer analytical skills as well as a large Rolodex.

It's not like compliance lacks its appeal for the right people. Drum says it attracts people who are detail-oriented and more comfortable in a staff job than they would be in a line position. And the demand for qualified compliance personnel remains strong, with movement from firm to firm.

"Most of our placements already have compliance experience," Drum says. "The compliance area is interesting. A few years ago it was easier to find people, but the pendulum has swung. It's an employee's market now."

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