Q&A: Compliance and Regulatory Practice

In the following conversation, Doug Henderson, a managing director in KPMG LLP's financial services regulatory practice, explains how to pursue a career path in compliance. The advice starts at the beginning, but should also be of value to those eyeing a shift from other sectors of the finance world, and those seeking their second or third job.

What makes compliance an appealing field in which to work?

It puts you in a position to be knowledgeable on all aspects of the business and because the rules are always changing, it's intellectually stimulating. Plus, it's on the right side of the equation - typical compliance professionals are trying to do the right things to make sure the company is doing the right thing by its customers. That's a good feeling.

Which undergraduate classes best prepare a finance major for a career in compliance?

Pre-law, business law, ethics, business, finance and industry-specific classes. If you want to be in banking, banking classes would be relevant. The same is true with brokerage, securities or management classes. Law is probably the most relevant of those classes.

What are some of the things I would do as an entry-level compliance employee?

The largest firms have significant compliance organizations and entry-level positions are going to be pretty narrow in terms of the scope of work you do. You might be assigned to review reporting, or conduct testing, or review activities. You might work as a junior member of a team that's involved in investigations or inspections or you could be assigned to review advertising, correspondence or email.

The smaller the firm, the fewer compliance people and the broader the scope of responsibility is on everyone including entry-level and junior people.

If you want to go directly into compliance, I would recommend that you get some other background first. Go to work for a regulatory agency, the Financial Industry Regulatory Authority or the Securities and Exchange Commission on the securities side. On the banking side, the Office of the Comptroller of the Currency, the Federal Reserve or the Federal Deposit Insurance Corporation. Or, work for a state banking or securities regulator. Oftentimes, public positions they don't pay as much as private industry, but in these times, public agency work is a great credential to have.

Are most securities-related compliance jobs found with firms such as yours or within financial institutions?

They are mostly found in financial institutions. We don't hire entry-level people to do compliance at KPMG. We, and our competitors, would look for one of two things: past regulatory experience or experience as a compliance practitioner.

Do experienced compliance professionals move freely between the Big 4, law firms, regulatory agencies and investment banks?

In these market conditions, there's not as much movement in and out of regulatory agencies. Depending on market conditions, there's a fair amount of movement within the industry among different organizations, including industry and consulting.

Are there certifications or designations that I should pursue if I want to advance in compliance?

On the securities side FINRA offers the Certified Regulatory and Compliance Professional (CRCP) program and boot camps for those who want to quickly pick up securities compliance and anti-money laundering knowledge, as well as university programs with the Wharton School of the University of Pennsylvania and the ICMA Centre at Henley Business School, University of Reading.

What's your advice to a student who's about to take his or her first job in this niche?

Make sure that you're current and conversant on the requirements that apply to the business you're in and that you understand the business itself. The best compliance people are able to bridge the gap and bring compliance in a meaningful way to the business side.

Compliance people can accomplish things by authority, leverage and power, but they're most powerful when they connect, communicate, coordinate and collaborate with the business side to find the right answers.