The wall that stands between control and compliance professionals and trading roles just got higher.
Middle-office and back-office professionals will find it harder than ever to get promoted to the trading floor in the way of SocGen's so-called "rogue trader," Jerome Kerviel. Citing recruiters and government officials in Paris and London, Bloomberg News reports Kerviel's unauthorized trading "ruined the chances of French bank clerks getting promoted to the trading floor."
"After Kerviel, it's very, very difficult for middle-office staff to move on as traders,'' Shaun Springer, chief executive of Napier Scott Executive Search in London, told Bloomberg. A Paris-based financial sector advisor to global search firm Korn/Ferry International put it even more strongly: "The middle office won't be a springboard to become a trader anymore,'' said Gael de Roquefeuil. "Career bridges were already difficult and at least for the short term they are completely over.''
Statements of French public officials point that way as well. Finance Minister Christine Lagarde, after investigating the scandal, urged "a rigorous independence between front-office and control units.'' And Jean-Claude Marin, public prosecutor in the case, endorsed SocGen executives' initial statement that Kerviel relied on knowledge accumulated over five years in middle office compliance and control work in order to cover his tracks.
' Playing With Fire'
Of course, back- and middle-office workers already faced near-impenetrable hurdles when seeking front-office roles. Almost all front office professionals are hired directly from one of a small number of elite educational institutions. "Even people who finish their CFAs, that is not necessarily a ticket into a front-office type role," David Martin, Boston regional director for global search firm Michael Page International, told eFinancialCareers.
While acknowledging the SocGen incident might push the goal completely out of reach, Martin wonders why so many candidates with risk and control experience are intent on moving to the front office. "In middle-office roles, they can have significant compensation," he says. "They can have great roles, a great career, without the stress of being a revenue generator."
However, while the pay gap between middle and front office may be narrowing, it can still be substantial. Back and middle-office jobs earn 60,000 - 120,000 euros total annual compensation (about $87,000 - $175,000 at Wednesday's exchange rates), compared with up to 4 million euros ($5.8 million) for "top traders," according to a Paris-based financial markets training firm cited by Bloomberg.