Guess who's still in demand thanks to Dodd Frank?
While financial firms throughout the land are still managing their way through waves of layoffs, primarily in trading areas, recruiters across the financial industry are expecting hundreds of companies to be looking for compliance officers over the coming 18-24 months.
From local and regional banks, to private equity and investment firms, to hedge funds, companies are focusing on their infrastructure and taking steps to manage risk. Compliance has become one of the fastest-growing areas in finance. Here's why, and what you need to know.
Dodd-Frank ushers in new jobs
To help implement the 2010 Dodd-Frank banking overhaul law and cope with the wave of foreclosures and refinancing, financial institutions hired compliance and mortgage servicing staff. According to the Bureau the Bureau of Labor, compliance jobs in banking have been on a growth curve since the Dodd-Frank law was enacted.
Impact on PE firms
Prior to Dodd-Frank, most private equity firms were not required to register with the Securities and Exchange Commission (SEC). Now, certain private equity firms—most with assets under management (AUM) topping $150 million—are required to do so, and to maintain records for all managed funds. The Acts’ new registration requirements and monitoring are creating a new tranche of compliance positions. A study compiled by PWC showed that more than half of the PE firms surveyed consider the main impact of Dodd-Frank to be increased compliance costs (that’s new jobs). More than 1500 PE firms are going to need to hire compliance professionals to handle all this registering and reporting, according to the Private Equity Growth Capital Council.
Banking on compliance
Meanwhile, larger banks have anticipated the need and are already staffed by-and-large for the newer requirements, so most of the hiring will be done by smaller banks (numbering nearly 8,000) and private equity firms, as well as hedge funds that have yet to have the pleasure of filing and reporting to federal agencies. By some estimates, nearly 50% of the hedge fund industry has yet to register, meaning there are thousands of firms that still need to get on board.
Where the jobs are
Firms are wading slowly into the hiring process, at a careful pace according to predetermined plans and established processes. The preponderance of hiring will be done by smaller banks, PE firms and hedge funds that haven't had to deal with filing and reporting to federal agencies.
And while there is growing demand for junior as well as and senior level compliance professionals, firms are still expecting brokerage licenses, such as a Series 7 and Series 24 certification; even a CFA.
Senior level talent may find more opportunities at smaller community banks, and because their compliance staff will be interacting with individuals from federal agencies, firms are seeking relationship-oriented people; in effect, diplomats with financial experience.
Explore the options
Many of these openings may not be located in major financial centers. If you are willing to look at opportunities away from traditional financial areas where it is more challenging to attract good talent, you’ll find you have a lot more options. For those who have aspired to become, or would even consider entering the compliance profession, now is a golden time.
Robert Namar is CEO of NAMARketing News, and a Wall Street veteran consulting for a number of financial services firms
