Recruitment Themes and Predictions for 2018 - Buy Side

  • June 12, 2018
 

As the Buy Side is clouded by uncertainty and change, simultaneously straining from the pressures of Brexit and a growing list of regulatory reforms, we take a look at what's driving recruitment of risk and compliance professionals and consider what's to come for the rest of 2018.

 

2018 is proving to be a challenging year for Buy Side firms, with regulatory pressures increasing whilst the uncertainty of Brexit’s impact looms large. At FourthLine we are well positioned to help firms navigate these challenges and build their change programs, drawing upon our extensive network of expert talent.

What is driving change within the Buy Side?

The Buy Side is currently facing up to seismic shifts, as its landscape is transformed by new regulations and geopolitical uncertainty. MiFID II was implemented at the start of this year and with it came sweeping changes. Implementation was fairly smooth, but there is still a lot of work to be done particularly in the areas of Transaction Reporting, Costs & Charges and Research Payments.

Brexit remains a complicated and uncertain issue for Buy Side firms, with its output unknown and clarity difficult to come by. It seems certain that it will lead many firms to relocate to Europe, and this will in turn drive demand for certain change professionals.

Firms also need to look ahead to SMCR, due in 2019. Whilst final requirements are still to be confirmed, firms will need to ensure they are in a position to understand how the changes will affect their business and plan implementation strategies.

What skills and types of experts are in demand this year?

Whilst most firms have deployed compliant MiFID II solutions, as we move into Day 2 a significant number of contracts have not been repapered or are still being negotiated. This will lead to demand for legal professionals who specialise in the area. With many firms outsourcing their Transaction Reporting requirements to ARMs, there will also be a need for oversight specialists who have experience of designing and building oversight functions, as well as experts with strong vendor relationship management skills. Professionals with experience and knowledge of Research Payments and Costs & Charges are also likely to be in high demand.

In relation to Brexit, we expect to see a huge increase in demand for contracted change experts across the whole project spectrum. Whilst we don’t know exactly what Brexit will look like at this point, professionals with knowledge of Passporting agreements for UCITs and AIFMD funds are likely to be in high demand, and there will undoubtedly be a requirement for regulatory lawyers and legal experts. Professionals with experience of corporate restructuring will be wanted, whilst the changes to derivative clearing should present opportunities for change professionals with knowledge of the current regulatory landscape and intricacies of the European Financial Services infrastructure.

Firms looking ahead to SMCR will require change specialists who have successfully implemented SMCR within banking firms and those with HR experience with regulatory project work.

How is the Buy Side changing this year?

We expect the Buy Side to continue to see unprecedented levels of change, with much depending on how Brexit plays out in the UK.

The impact of MiFID II will continue to be felt, with more responsibility on Buy Side firms to ensure that systems are working as they should be on a daily basis and a shift in the wider culture, with a greater need for transparency.

The upcoming SMCR should also lead to a change in where accountability sits, and ultimately the way in which firms behave.

What are FourthLine’s predictions for the rest of the year?

By all accounts, the unpredictable nature of Brexit makes it extremely hard to predict what will happen over the next year to the Buy Side, though firms would be wise to plan for worst case scenarios. A lot will inevitably ride on what decisions are made with regards to access to the Single Market and the Passporting of funds.

With regards to MiFID II, we anticipate that some firms may fall foul of the regulation as the FCA start handing out fines. In some cases, firms ran light MiFID II programs and mistakes will have been made, so we expect to see the recruitment of MiFID II experts throughout the year to assist with remediations.

We also expect SMCR to drive demand for change professionals with a strong understanding of the senior management regime requirements, conduct responsibilities and regulatory reporting.

If you’d like to find out more about any of the above points or discuss your recruitment requirements, get in touch with our Buy Side team on 0203 800 1568.

 

 

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