Just as Sarbanes-Oxley created a cottage industry of compliance professionals, the Dodd-Frank Wall Street Reform and Consumer Protection Act that was passed last year is expected to generate a slew of new financial jobs, especially for accountants and auditors.
At least that's what the Bureau of Labor Statistics in a recent copy of the Business Journal was predicting. BLS says employment for accountants and auditors is expected to grow "much faster than average" or approximately by 22 percent between 2008 and 2018. According to the report, more than 279,000 new jobs could be created in this sector as a result of changing financial laws and corporate governance regulations that translate into an increased accountability for protecting an organization's stakeholders.
Growth is also expected among financial and budget analysts. BLS says this group could see job growth at 15 percent and candidates with a Masters Degree are predicted to have the best opportunities.
There is some debate, however, over how much change is likely to come out of Dodd-Frank. Some are calling it the biggest piece of financial regulation since the Great Depression while others say by the time financial industry lobbyists have their way with it the act could end up being a toothless pile of useless paper.
As they now stand, the financial reform regulations promise to create new trading venues and liquidity sources, reduce trading costs for investors, and stimulate higher trading volumes and profits across the industry, according to Information Week.
Information Week Editorial Director Greg MacSweeney writes that "Dodd-Frank touches on virtually every part of the financial services business, from credit cards, mortgages, and bank fees to derivatives trading and hedge fund registration. For starters, banks, investment firms, insurance companies--and the firms that serve them--are likely to need all kinds of data analytics, risk management, and knowledge management software to meet the reporting and compliance demands imposed by Dodd Frank."
On Wall Street, a different scenario is playing out. Recruiter Deborah Rivera of the Succession Group, who specializes in placing candidates in origination, sales, trading, investment banking, and research positions, says that when it comes to Dodd-Frank, it all depends on where you work.
"Anyone I've spoken to thinks it's going to be a catastrophe," says Rivera, who has a number of candidates who are worried about their jobs. As an example, she points to the financial engineering groups that work on alternative solutions for corporations such as helping a company optimize their capital structure so they can issue more stock.
Other people who may be in jeopardy are folks who work in any of the derivatives areas. "They seem to feel they'd have to make public what they're doing for their clients, which would take away their effectiveness because the competition would see it too and that defeats whole purpose of their existence," adds Rivera.
Still, there is hiring going on in certain sectors. According to Rivera, people are adding to their head count in financial institutions, as well as bankers who cover financial institutions. "We're seeing people being added in the consumer products sector, such as bankers who cover companies like P&G or Johnson & Johnson," says Rivera. "There's also a resurgent need for people who can do restructuring for asset securitization."
Meanwhile, back on Capital Hill, the House Financial Services Committee held a hearing recently to review five proposals that would repeal significant parts of the Dodd-Frank Act. In particular, those proposals just happen to be ones that are unpopular with Republicans and the business community. They include:
- A requirement that private equity funds register with the Securities and Exchange Commission.
- That derivatives trading be reported and processed through a clearinghouse.
- A rule that publicly traded companies calculate the median compensation of all employees and compare that to the CEO's pay. A bill to repeal this provision has already been introduced.
- A liability provision for credit rating agencies and to increase the offering threshold for small companies.
If the lobbyists win this battle, not only will the Wall Street reform act have little strength left to reform anything, but all those jobs that BLS was predicting may just whither away as well.