Risk & Compliance Update – July 2018

Mon, July 30, 2018

The market

“The compliance and regulatory space has been one of the most buoyant recruitment markets across Asset Management and is set to continue as the FCA tightens its regulatory grip on the industry; Regulation only seems to be going in one direction. Much of the UK’s Asset Management market has spent the past six months attempting to negotiate the uncharted waters of Brexit. Key  questions that have arisen surround fund domiciles and MiFID II requirements. Firms have also seen the implementation of GDPR as well as the new Senior Managers and Certification Regime (SMCR)” Khalid Basheer, Risk & Compliance Principal Consultant.

Since our last update

The 2 key areas of demand have been:

  1. Policy & Regulatory Affairs
  2. Marketing Compliance & Distribution

Contract versus permanent demand

80% of the roles we have assisted with have been permanent and 20% have been contract. We have seen a 16% increase in permanent hiring since 2017 as some firms seek to avoid expensive short term hiring practices despite the uncertainty surrounding Brexit.

Key trends

  • Compliance Monitoring, Advisory and Generalist skill sets are continuing to be highly sought after in the Asset Management space. The Policy and Regulatory Affairs skill set which has seen the sharpest increase in demand with the Big 4 as well as the FCA bolstering their respective teams.
  • Brexit contingency planning has seen the demand for the Policy and Regulatory Affairs skill set most prominent amongst Asset Managers. More than a 60% increase in such hires than in 2017 with the majority of the top and mid-tier firms all adding to their teams.
  • Marketing and Distribution Compliance – according to a survey by State Street, 75% of the 250 Asset Managed firms polled, said they had already taken action or were in the process of revising their global distribution strategies in response to Brexit. A further 19% said they planned to make changes in the next five years.

Technology

The increase in regulatory obligations has also seen hundreds of UK Asset Management firms embrace emerging regulatory technologies now being called RegTech. An overwhelming majority of responses to an EY survey identified increased automation, efficiency and auditability as the impetus behind investment in RegTech. Despite the proliferation of RegTech start-ups entering the market over the past 12 months, it is BlackRock’s risk analysis and portfolio management software, Aladdin leading the way with close to 90 fund managers running more than $18tn in assets on the platform.

Diversity

Major UK companies are beginning to pull each other up on gender and race diversity – the co-founder of a London communications group was invited to pitch for business with a Wall Street firm last November, however the offer came with an unusual demand.  15% of the scorecard for the pitch was based on the firm being able to show its commitment to diversity and inclusion. This needn’t be a problem, rather be seen as an opportunity.

Compliance & Risk Placement Statistics:

  • 65% Female
  • 60% BAME
  • 10% Return to work parent
  • 10% LGBT

Our Event: ‘Disruptive Technology & Innovation within Asset Management’ with PwC

In this year’s PwC’s CEO survey, 69% of UK CEOs said that they believe emerging technologies – such as artificial intelligence, blockchain and robotics will disrupt their current business models in the next five years. We asked PwC to collaborate on an event with us for the second year running. The session was led by David Moloney, Director - Innovation & Transformation and Elizabeth Stone, Partner - UK asset and wealth management leader.

PwC concluded by stating that “predicting the future is difficult, however it can help to imagine different possibilities”.  Their report is a useful model for tackling uncertainty and the unknown. It has six key messages for leaders:

1. Act now

2. Make no-regret moves

3. Make a bigger leap

4. Own the automation debate

5. Focus on people, not jobs

6. Build a clear narrative

Firms leading the way with the technology agenda appear to be Blackrock, Schroders and M&G Investments, all of whom have technology centres of excellence.  Please contact us if you wish to receive the event paper.

Market Predictions

  1. Increased hiring needs across Europe.
  2. Europe and in particular, making mid-senior level hires with firms looking at individuals who can manage the relationship with their respective regulators as firms seek to leverage what they do in the UK, into Europe.
  3. Increased Distbution Compliance hiring owning to new fund launches.

Click Here to keep track of the Risk & Compliance opportunities we recruit for.