If you want to find a niche area of financial services that is both growing (for the moment) and creating highly paid jobs, try the ratings agencies.
While banks struggle, ratings agencies are enjoying booming revenues. Moody's was surprising upbeat last week when it reported fourth quarter results, with revenues rising 33% versus the same period of 2011. McGraw Hill reported today that fourth quarter revenues at Standard & Poor's ratings business rose 34% year-on-year. And Fimalac, parent company of Fitch said in January that Fitch, "enjoyed an increasingly fast pace of growth" at the end of 2012. Raymond McDaniel, president and chief executive of Moody's, predicted that similar "favourable conditions" should continue in 2013.
On the back of growth, rating agencies are recruiting. Daniel Piels, a spokesman for Moody's in Europe, said the company wants, "skilled, well-qualified applicants" to work across its ratings business and its analytics team which provides software, advisory services and research for credit and economic analysis and financial risk management. Mark Tierney, a spokesman at S&P said the company's EMEA business "continues to grow strongly" and that it is recruiting "steadily...across both analytical and support staff."
Fitch declined to comment on its hiring plans. DBRS - a small Canadian based ratings agency - is also building its staff. The company describes itself as, "dynamic and growing," and Rani Ryatt, an assistant vice president in the London office, said it had been hiring.
Pay at ratings agencies has typically been lower than at most investment banks. While the ratings agencies don't break out compensation and headcount in their financial statements, the most recent results filed at Companies House in the UK for S&P and Fitch respectively, show that the average member of staff at S&P in London earned £101k ($155k) for the year ending 31st December 2011, while the average member of staff at Fitch earned £81k ($126k) for the 12 months ending 30th September 2011. At DBRS, pay appears to be appreciably higher, with the average person in London earning £150k in the year to November 30th 2011, according to records at Companies House.
And rating agency pay appears to be rising. Last week, Moody's said it had accrued higher bonus payments for 2012 than 2011. Unfortunately, agencies defer bonuses in much the same way as banks: Fitch said it introduced three year bonus vesting back 2009.
Competition for jobs at ratings agencies may be more aggressive now than in the past. Piels said the number of people applying to work at Moody's has risen. Nor are ratings agencies entirely without their own risks. Standard & Poor's is being sued for more than $5bn in damages by the US Department of Justice, which accuses it of inaccurately rating mortgage bonds before the financial crisis. Similarly, Egan Jones, a small US ratings agency known for its leading edge forecasts was recently banned from issuing ratings on asset backed and US government securities for 18 months as part of a settlement with US regulators.