Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Compliance salaries surge as super funds, private capital hunt for risk talent
The demand for risk and compliance staff in financial services may have stabilised since the Hayne Royal Commission, but salaries are still going up due to a confluence of factors according to recent data out of Melbourne-based recruiters Kaizen.
The average risk and compliance compensation is now $172,000 (gross) including super, the 2024 Kaizen Recruitment, Risk and Compliance Guide notes, with salaries surging across the board.
The lack of available talent has increase demand at the lower end of the experience index, which has meant that the least experience risk and compliance talent is actually gaining the biggest relative average salary increase.
“Since the Royal Commission financial services risk and compliance professionals have had considerable increases in their remuneration,” the guide states. “To hire the same 1-2 years of post-graduate risk and compliance, we have seen entry-level salaries at the analyst/officer level candidates increase 68 per cent, going from $65K pre-royal commission to $95K to hire the same 1-year of risk and compliance experience.”
At the top end of the salary index, meanwhile, a hyper focus on fortifying risk management has spurred companies to offer higher salaries to experienced staff members. A mid-weight risk and compliance manager with 7 to 9 years’ experience now takes home $155K to $185K (including super), Kaizen says, while a chief risk officer can post anywhere between $280K and $450K.
Salaries in the more senior roles can vary “dramatically”, the guide notes, depending on the size of the hiring company and other variables including the responsibilities of the employee. Senior risk and compliance officers are being given more authority, however, and taking on more work to go along with their higher salaries. They’re also now in frame to take home bonuses, especially if they’re employed by one of the larger super funds in the country.
“Businesses are now adding risk, compliance, and legal (RCL) professionals to the list of employees who could qualify for bonuses,” the report states. “Previously unavailable to the business support functions, most RCL candidates would not be eligible to secure bonuses.”
This trend was first noted at Australian Super and other large industry funds, the guide continues, typically at senior manager levels and above. “But we have now seen this filter down even to the analyst level in some funds as organisations looked for ways to outcompete their peers securing and retaining the best talent.”
Large industry super funds aren’t the only providers keen to attract and retain risk and compliance staff, with the march of private capital players extending into this corner of the labour market as well. In particular, Kaizen reports, a growing number of private credit providers are trying to fortify their systems and frameworks “in advance of the regulators pushing them to do so”, Kaizen postulates.
“Candidates who have deep credit and investment risk have been highly favoured, particularly if they understand private equity, infrastructure, real estate, and private debt. Opportunities have been created in the space for senior risk and compliance leaders with a strength in operational and enterprise risk as well as more junior roles being created to handle the increasing workload.”
