Pressure on supply drives up financial services salaries within key sectors

Highlights
As demand outstrips supply, financial services workers are gaining significant increases in basic pay when moving roles:

Senior accountants receive an average 31% increase
Junior Fund Managers salaries up circa 27%
Operations professionals gain 10 ñ 20% rises
Credit Analysts averaging 20% growth at all levels
Trading Floor Secretaries see average salary increase of 23%

Source: Morgan McKinley Salary Survey 2006. Salary comparisons made between April 2005 and April 2006 Salary Surveys.

Senior accounting salaries up 31%
With the continued expansion of Londonís financial services market, the sustained pressure on candidate supply is pushing up basic pay rates within key sectors of the industry including product and financial control, asset management, credit and support functions. Finance workers changing roles are the ones reaping the monetary rewards.

This is particularly the case for senior accountants across the controlling functions within investment banks. A reduction in the number of graduates taken on by the large accountancy firms in 2002 and 2003 is continuing to have a knock-on effect on the availability of this candidate pool. As a result, experienced accountants are in high demand and short supply and in turn, receiving substantial increases in basic pay. Accountants with two to five yearsí experience can now gain on average a 31% rise in basic salary. For example, a 4 yearsí post-qualified controller received a 19,500 salary hike to 71,500 when moving to a new position within a new organisation.

Robert Thesiger, Chief Executive of Morgan McKinley comments:

ìWhile actual salary bands may not have shifted dramatically in certain areas of the financial services sector since last year, more candidates are receiving basic salaries at the higher end of bands when they move roles. Senior accountants are a good example. The reason for this is simply a case of supply and demand. The financial services market is buoyant, banks are expanding and global opportunities are abundant. This is squeezing an already tight candidate pool and in turn salaries are being pushed up to secure the hire of experienced candidates.î

Junior fund managers basic pay up 27%
It is not just experienced individuals who are witnessing increases in basic pay. At the more junior end of the market, basic salaries are significantly higher across a number of financial practice areas compared to 2005 as financial institutions compete to attract those individuals who can demonstrate clear potential. A key example is Fund Managers within asset management houses with up to 2 yearsí experience who could have expected a minimum basic salary of 30,000 in 2005 but are now commanding a minimum of 38,000 ñ a jump of 27%.

For back office support staff at the junior level, it is a similar story. As banks expand and grow their product ranges, this has significantly increased demand and salaries have risen accordingly. For example, an OTC Derivatives Credit Documentation specialist with up to 2 yearsí experience can now earn between 35,000 and 45,000 - an increase of 14% on last year.

Even the secretarial and office support sector which hasnít seen salary growth for several years is now showing signs of upward movement in basic pay, particularly for those whose specialist knowledge is in demand. For example, Desk Assistants and Trading Floor Secretaries with up to 2 yearsí experience can now earn between 25,000 and 29,000 as opposed to 20,000 to 24,000 in 2005.

Robert Thesiger, Chief Executive of Morgan McKinley comments:

ìAcross the board salaries have been going up over the last year as the ëwar for talentí continues to take hold in the City. Headcount targets in nearly all investment banks have risen in order to handle the increase in business activity and supply has not been able to keep up with demand. With the financial services industry looking set to remain buoyant well into 2007 and beyond, employers are now working hard to secure the talent they need. Already, total compensation packages have become more sophisticated in the battle to retain staff and in order to attract new talent, banks are upping starting salaries, offering sign-on bonuses and in some cases providing indications of what 2007 bonus payments may look like.

ìAside from using compensation packages to lure individuals from competitors, banks are becoming more flexible in their hiring and opening up candidate specifications to attract those who may not necessarily be an exact fit for a role but can demonstrate clear potential and be trained into the position. Also, organisations are looking further afield for their candidate supply to capture those financial services workers who are transporting their careers around the globe.î