A bottleneck has formed at the bottom end of the British compliance job market in the last year or so and salaries have therefore risen stupendously. Compliance Matters recently interviewed Chris Clarke, a City of London compliance recruitment specialist, to explain this problem and to review the ways in which financial institutions admit new entrants into the compliance job market.

Chris' observations apply to all areas of compliance in all sectors of the financial services industry. This article follows the format of a question-and-answer session.

Q: Who issues compliance qualifications in the UK?

A: There are two main bodies that do this – the International Compliance Association or ICA and the Chartered Institute for Securities and Investment or CISI. They do a range of things. It can be a certificate, which takes six months, or it can go up to a full-blown diploma, which typically takes two years, maybe three, and which people typically do while already employed. If they are already in compliance, the financial firm they work for usually pays for it. A diploma is very expensive, running into thousands of pounds; certificates only cost hundreds.

My advice to someone who wants to enter the compliance job market is for him to have a degree to start with, then get a minor qualification, then get his foot in the door at a bank or other financial firm, then get a diploma. So many people are getting legal degrees every year that there are not enough jobs at law firms to go ‘round, so they sometimes look at related areas and compliance is one of those. The problem for recruiters here is to weed out the ones who think of compliance as a short-term career fix that will tide them over until they can get on with their legal careers. There are many of these people, so some firms are wary of graduates.

Q: Are there any ways around this problem for graduates?

A: One way is for a graduate to begin to study for a compliance certificate. This will prove that he or she is sincere about going into compliance and hopefully he will be able to get a compliance job while he ro she is still studying for that qualification. This happens a fair amount. If he or she manages to do that, he or she will have the option of going on a diploma course later and his or her firm will usually pay for it. He or she might even persuade his or her new employer to pay for the certificate course that he or she is completing, although this is the 'Holy Grail' rather than the norm.

The biggest challenge at the moment is that compliance departments are incredibly busy and the staff there don't have the time (or don't feel that they have the time) to train up a 'break-in' person or graduate. Because there haven't been many firms taking on break-in people, salaries at the bottom end of the compliance market have jumped in the last year or so.

Q: What salaries do entrants at the bottom end of the market earn?

A: Somebody with 0-1-2 years' experience can earn anything between £30K and £45/50K in London, whereas before it was £25-40K. I'm now seeing people with two years' experience touching £50-55K. This is all because there haven't been many firms taking in break-in people.

Q: Is a law degree the only viable one?

A: No, it needn't be a law degree. Compliance departments do need automated systems, so it could be IT or even maths. Some compliance departments just want somebody with a degree. If it's a first, even in history, that will do because it means that the graduate is at the top of the pile. A lot of it is due to the taste of the bank's hiring manager.

Q: Who, or what, is a hiring manager?

A: It's always a line manager in a compliance department who decides whom to hire. It tends to be the head of compliance doing it directly. At a small asset management firm, there's usually a head of compliance and a small number of other compliance staff one rung down from him, so it'll be him. At a larger institution, there's the head of compliance, there might be a separate money-laundering reporting officer or MLRO, plus some separate compliance monitoring teams, all with their heads as hiring managers. Or it could be the head of regulatory policy.

If the head of compliance started off as a lawyer, he or she is likely to want to hire somebody with a law degree. If he or she started off life as a banker outside compliance, perhaps coming to his or her job through the operations route, he or she would be more open to a range of different applicants and more likely to pick someone with a different degree. The legal route is the usual one, though.

Q: Is there any difference in starting salary between a first-time entrant to a compliance department with a law degree and someone with a different degree?

A: No difference in price at all.

Q: Are there any differences in all these trends between sectors of finance?

A: Everything we've been talking about is generic across the whole of compliance. Compliance gives you an underlying skill set that you can take anywhere - it's always the same to a degree. Compliance people are moving between jobs that deal with different parts of the rulebook, and between different parts of the industry, all the time. Mind you, a lot of people stay in the same area (e.g. fund management) forever because they know how that sector works inside out and that makes them more valuable and enables some of them to move on to bigger and richer institutions. When they do move between market segments, they tend to move to parts of the industry that are not too distant from their present jobs; you never see someone going from securities compliance to insurance compliance.

* Chris Clarke can be reached on 0203 693 7251 or at chris@clarcrecruitment.com