HOUSE, Issue 29

Welcome…to the 29th edition of House. After a busy first half of the year, we are starting to see some selective hiring in Asia Pacific, whilst activity in the London market has really started to pick up within banking, as firms look to enhance their compliance departments. We have also seen a real push from the Big 4 to hire regulatory experts, continued demand for wealth management regulatory experts and a change in attitudes towards traditional advisory compliance officers.

Advisory compliance is no more…Monitoring and testing is king!

Once the darlings of compliance departments globally, where control room officers wanted to go and where the best salary packages were most often found, it seems that the advisory compliance profession is in decline. We are now rarely asked for product specific compliance officers, having spent most of the last decade chasing fixed income compliance officers, we now have too many…

Monitoring and Testing, Surveillance, Compliance Assurance are the new doyens of the compliance fraternity. Regulators no longer want to see lines of compliance officers flanking the trading floor or chaperoning the investment bankers, they want metrics and tangible results. They want to see exception reports showing testing of the business, they want to see high tech surveillance systems and an audit programme to back all this up. This year we have seen a seismic shift in what people need from a compliance officer.

Big 4 go regulatory crazy!

We have seen a lot of human capital activity at the Big 4, both internally and externally, as they boost their regulatory services in Asia and Europe. In Hong Kong, we have seen promotions to Partner for Winnie Ho at EY, Mary Wong at PWC and high profiles hires for KPMG, with Jennifer Teng formerly Head of Compliance at Jeffries.

The most notable pattern is for employers to want direct industry knowledge. They want people who can empathise with their client base, provide real experience and apply the relevant regulatory solution to a specific situation. This suggests a change in thinking from the Big 4, from offering large scale transformation or gap cover to now penetrating the strategy market.

Wealth Management Compliance! We need people!

As the growth of wealth and millionaires in APAC surpasses the rest of the world, private bankers and wealth managers have been actively pursuing clients in an increasingly competitive and consolidated market. This is particularly the case in China, whose private wealth stood at 165 trillion yuan in 2016 and is forecast to grow to 188 trillion yuan this year. As a result, Chinese private banks are now competing globally in AUM for the first time with China Merchants Bank taking 20th and ICBC taking 23rd place as reported in the Scorpio Partnership Global Private Banking Benchmark, 2016.

As the number of ultra high net worth individuals in Asia continues to grow, and financial institutions expand their wealth management teams in response, it is clear that the regulatory functions must keep pace. However, is there a population of wealth management compliance officers big enough to support this growth?

Arion House suggests there isn’t. There is already a significant dearth of wealth management compliance officers and demand is only expected to grow as regulators increase scrutiny of the industry and firms take on an increasingly complex and diverse client base.