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Interim Market Report 2011 - Risk Management Salaries

The average salary increase achieved by risk managers accepting new positions fell from 19% in the second half of 2010, to 17% in the first half of 2011. Whilst the fundamentals of supply and demand still favour the supply (candidate) side of the recruitment equation, the slight fall may simply suggest that the unprecedented demand that existed in 2010 is starting to recede. The growth and building up of risk departments is replaced by the occasional need to replace risk managers as they leave.

The current rate of increase is unlikely to fall further. The principal factor supporting salaries is that most financial services groups are seeking not only specialist skills but also common personality traits that are frequently hard to find. The result is that those risk managers with a marketable combination of skills and personality traits receive not only multiple offers but the offer of a buy back from their existing employer. This again affects the salary they can command.

Whilst these average salary increases have been achieved by changing employer, like employees in much of the rest of the economy, annual salary increases achieved by the majority of risk managers staying with their existing employer have been rather more modest. In many instances base salaries have simply matched inflation which in an environment where real earnings are falling is hardly surprising. There is little doubt that many sectors of the financial services industry, and the individual companies within it, are tightly controlling their costs. Whilst the current dynamics of the recruitment market are promoting salaries, there is little danger of a demand led inflationary spiral. Confidence in the financial services industry and the wider economy is not strong enough.

Salary Survey

Barclay Simpson analyses the salary data that accumulates from the placements we make in the UK. This provides a useful guide to salaries and salary trends for risk management professionals.

To give as accurate a picture as possible, we have taken a range of different risk management profiles and provided an approximate salary range that they could realistically earn. The profiles are for good rather than exceptional individuals and take no account of other benefits in addition to the salary that usually accrue to risk professionals, such as bonuses, profit sharing arrangements or pension benefits. The ranges indicate London salaries, which are generally 10-15% higher than provincial salaries.

1-5 years’ experience


Credit risk

Salary

Credit Risk Reporting, Corporate / Investment / Retail Banking
Responsibility for compiling MI and reports for use by board, regulators, rating agencies, sales / trading and credit department.

£35,000-£45,000

Credit Analyst, Corporate Banking
Graduate with banking experience. Middle office role on Corporate or FI portfolio.

£35,000-£60,000

Credit Analyst, Project / Leveraged Finance
Graduate with specific banking experience in an area of specialised lending. Middle / front office.

£40,000-£70,000


Market risk

Salary

Market Risk Analyst
Graduate in Mathematics or related discipline (ideally with MSc). Experience in Market Risk including VaR and stress testing. Excel & VBA skills.

£35,000-£55,000

Risk Analyst – Model Validation
MSc in Mathematics or related discipline. Risk Management background with experience in risk quantification techniques and managing the validation process for new valuation models. Strong technical skills (Excel, VBA).

£40,000-£60,000

Quantitative Analytics / Analyst
PhD in Maths, Physics or Engineering. Excellent technical and mathematical skills. Experience in creating and building quantitative models according to front office trading requirements.

£55,000-£80,000


Operational risk

Salary

Risk Analyst, Investment Management
Graduate within operational risk in investment management.

£35,000-£45,000

Operational Risk Analyst, Insurance
Numerate school leaver with a general awareness of risk and control methodologies in the insurance or life sector.

£30,000-£40,000

Group Operational Risk Analyst, Retail Banking
Graduate with practical experience of Group operational risk management policies and procedures within a retail bank.

£35,000-£45,000


5-10 years’ experience

Credit risk

Salary

Credit Manager
Graduate with credit counterparty analysis experience from the banking sector, with sanctioning authority or line management.

£60,000-£80,000

Counterparty Credit Risk Manager, Investment Bank
Graduate with credit risk experience from the banking sector.

£50,000-£60,000

AD Credit Officer – Private Banking / Wealth Management
Good wealth product knowledge, degree educated and with some level of lending discretion.

£55,000-£60,000

Credit Sanctioner - Investment Banking
Graduate with strong focus on credit, often sector or product specific and with significant level of lending discretion.

£70,000-£90,000


Market risk

Salary

Market & Liquidity Risk Manager, Banking
Value at Risk PhD working on the capital allocation programme within the insurance sector.

£65,000-£85,000

Portfolio Risk Manager, Fund Management
Graduate with risk management experience with the Big 4 and the fund management industry.

£65,000-£75,000

Market Risk Manager
Graduate in Maths or related discipline. Ideally MSc. Experience in providing risk analysis and commentary for senior management, investigating risk profiles, improving risk capture. Strong Access, Matlab, Excel & VBA skills.

£65,000-£90,000


Operational risk

Salary

Operational Risk Manager, Investment Banking
Graduate accountant with experience in audit and risk control in investment banking.

£65,000-£75,000

Senior Risk Manager, Retail Banking
Graduate accountant with banking audit and operational risk management experience.

£60,000-£80,000

Group Operational Risk Manager, International Banking & Financial Services
Graduate with banking and risk management experience responsible for developing the operational risk profile of the overseas business units.

£55,000-£65,000


10+ years’ experience

Credit risk

Salary

Credit Director – Corporate Bank
Degree or ACIB qualified, clearer trained and holding a significant level of individual lending discretion and credit committee member.

£80,000-£90,000

Head of Credit Risk - Retail Bank
MSc qualified as a minimum, highly technical and often from a statistical background. No longer hands on, but likely to be from a scorecard development background.

£80,000-£110,000

Head of Portfolio Analytics
PhD in a quantitative subject. Significant experience in the area, including scorecard development. Comfortable managing a large team.

£80,000-£140,000


Market risk

Salary

Head of Market Risk Control
Graduate with experience in market risk control in investment banking, including VaR analysis, stress testing, scenario analysis, market risk reporting and project work.

£85,000-£125,000

Head of Market Risk Management
MSc graduate in Maths or related discipline. Accomplished in all aspects of market risk and management including initiating and leading market risk projects. Ability to develop strong relationships with front office and relevant business heads. Investment banking background.

£80,000-£140,000

Head of Model Validation and Quantitative Analytics
PhD graduate in Maths or related discipline. Investment banking background with experience in both quantitative analytics and model validation.

£85,000-£160,000


Operational risk

Salary

Head of Operational Risk Framework – Private Bank
Graduate with strong operational risk MI and reporting experience from the financial services sector. Previous management experience.

£70,000-£90,000

Global Head of Operational Risk – Investment Bank
Graduate and qualified CA with investment banking experience in operational risk and group internal audit.

c.£125,000

Chief Risk Officer - Retail Banking
Economics graduate with central bank, merchant bank and retail banking experience in all disciplines of risk.

c.£150,000


Interim

Salary

Interim Risk Framework Analyst

£200-£350 per day

Interim Risk Manager

£450-£550 per day

Interim Head of Risk

£500 + per day

Risk Consultant
(whereby the contractor is brought in for a specific area of expertise - the role may not fit neatly into the hierarchical structure of the team.)

£400 + per day


Bonuses

The following table indicates the full range of bonuses and is based on conversations we’ve had with clients and candidates. We also looked at last years figures and factored these in also. The very broad ranges indicate the extremes, however, most bonuses will fall somewhere near the median point within each section.

 

Analyst
Associate
VP
SVP
D
Investment Banking

0-40%

20-60%

30-80%

40-100%

40-100%

Corporate Banking

0-25%

0-35%

10-50%

20-60%

30-100%

Private Banking

0-25%

0-30%

10-50%

20-60%

20-60%

Asset Management

0-20%

0-30%

10-40%

20-60%

20-60%

Retail Banking

0-20%

0-30%

10-30%

20-60%

20-60%

General / Life Insurance

0-20%

0-30%

10-40%

20-60%

20-60%

Lloyds Insurance

0-20%

0-20%

20-40%

20-40%

20-40%

Hedge Funds

n/a

0-70%

0-150%

50-200%

50-300%

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