The one job banks and hedge funds can't fillMarch 13, 2012: 5:00 AM ET
New regulations for banks and financial firms mean a booming market for experienced internal watchdogs.
By Alex Konrad, reporter
FORTUNE -- The banking industry has cried foul over the additional burden of Dodd-Frank regulations taking effect soon, but they mean a boom in business for compliance officers. "Prior to the crash in 2008, compliance was never viewed as a sexy area," says Mitchell Peskin, a partner at the ExecuSearch Group. "Now it's a growth area." Some, like TD Bank (TD), bolstered their staff in 2010, but recruiters say a big hiring rush will start this summer as the Volcker Rule takes effect.
The surge appears to be already underway at a number of major job sites. TheLadders had over 100 listings for compliance officers last month, with New York, Chicago, and Dallas the top three listed locations. At America's Job Exchange, listings in the compliance space have exploded: There were 9,148 jobs with "compliance" in their title for the second half of 2011, up from 221 a year ago, according to company president, Rathin Sinha.
What you'll do
Financial firms need their own compliance officer to oversee activities and report directly to top management. Knowledge of the regulations and writing skills are critical. At investment banks, an officer will report within a compliance vertical of up to 50 employees under the bank's general counsel, says Peskin. Companies will also increasingly activate new compliance software to meet the regulations, so candidates must be prepared to work closely with information technology staff.
At regional and community banks, compliance officers must reconcile municipal bonds with regulatory constraints, which will create major job demand in that space, says Wayne Abernathy, an executive vice president at the American Bankers Association (ABA). He notes with some concern, however, that demand for compliance jobs might come at the expense of layoffs for other managers to offset salary.
The upcoming Volcker legislation could force thousands of banks to assume greater regulatory risk when dealing in munis, a major part of their business. Compliance officers at smaller banks would then have to work closely with in-house legal teams to consider whether the effort is worth the added business cost.
What you need
Chief compliance officers must have extensive experience; less exposed banks can hire those who have just five years in the industry. Well-qualified candidates may find themselves able to pick and choose their positions, while smaller-market banks may have to settle for candidates who pick up expertise as they go. "People are going to have to be hired as warm bodies to learn on the job," says Jody Moore of MSI Consulting.
The ABA offers training for lower-level hires, but a law degree is critical for high-level positions. Leadership and good presence in the boardroom also help as compliance officers at investment banks and hedge funds work with top management. And you'll have an ace up your sleeve if you've worked at one of the regulators or have already helped a company go through the transition process in your previous post.
What it pays
$70,000 to $90,000 at smaller banks; $150,000-plus at investment banks and hedge funds
A shorter version of this article appeared in the March 19, 2012 issue of Fortune.