Risk management salaries increase dramatically, says financial recruitment specialist

The junior end of the market has seen particularly strong growth. Morgan McKinley believes junior risk managers (up to four years’ experience) are in short supply and their salaries have increased by over 30% to accommodate rapid business expansion.

Credit risk professionals with two to four years’ experience should expect basic compensation of £40-65,000, with a 10-30% bonus, while senior managers who have worked eight years or more are seeing a range of £65-125,000, with 40-80% bonus. The bonus range can vary dramatically both within a product area and between different risk product departments. A market risk specialist with eight or more years’ experience, for example, should see a salary in the range of £95-175,000, with a bonus of between 75% and 125%, while quantitative finance professionals could see a bonus of up to 300%.

Simon Tuke-Hastings, head of the firm’s risk management and quantitative analysis division, attributes it to an increase in trading of structured products and regulatory drivers, such as Basel II.

“With higher trading activity in exotic and structured products, the quality of risk managers has become more important in ensuring proper trading conduct,” he said. “Basel II is a hot topic for credit risk and operational risk, they have seen an enormous increase in their compensation,” he added.

Tuke-Hastings believes many banks have begun to set up “quant-support” groups, with a lot of demand driven by hybrid credit and equity products. “Convertible bond recruits seem to be quite a big one at the moment – most clients say they’re hard to come by,” he said.

Overall, Tuke-Hastings believes risk management recruiting is buoyant. “With the regulatory drive and senior managers under pressure to make sure everything is ready and watertight, risk managers are in demand.”