Regulatory bodies are a no match to private equity firms in terms of compensation plans. Entry level graduates fancy internships and trainee programs in the “Big Four” organisations.
But what comes as a surprise is people from the top management shifting from private equity jobs to advisory services in regulatory bodies. Clearly, there is something beyond monetary benefits that causes this unlikely shift.
Recent research by eFinancialCareers, a career enhancing organisation has reported that financial regulators are hiring private equity experts across Hong Kong, US and other Asian countries. The stringent salary bands that are characteristic of such regulatory bodies also seem to vanish gradually.
Effect of financial crisis on private equity market
Post the financial crisis, the private equity industry had to tackle unprecedented hitches in terms of operational efficiency and in offering better value to the investment professionals. A good percentage of the talent pool affected through these changes looked for opportunities outside the private equity sectors.
Impact of regulators on future growth
In the world of regulation and compliance, key decisions are bound to impact the future of the industry thus vesting more ownership in the hands of policy makers. Regulatory compliance and policy effectiveness are difficult parameters to be achieved, luring professionals looking for more challenging roles.
Long-term job security
While economical uncertainties and political unrest have caused downsizing of organisations in the past, regulatory bodies seem to be the least affected. With the globalization of the financial sector, regulatory bodies specializing in the demeanour of overseas business seem to be growing.
Growth of private wealth management
Advisory services of private funds are on the rise. Asian countries such as Singapore and Hong Kong have been rapidly growing as centres of private wealth management. Regulatory bodies across Asia are now hiring experts from private equity firms to manage and enhance these areas of focus.
Regulatory bodies are emerging in many jurisdictions with new supervisory models. Finance professionals in regulatory bodies can choose from a variety of key areas such as corporate governance, compliance management and risk controls.
While history has seen successful transitions between the two industries, there have also been some fiascos (Joe Jiampeitro a former employee of Federal Deposit Insurance Corporation was fired by Goldman Sachs due to breach of confidentiality policy). However in most cases the stint lasting for 3-4 years in any regulatory body can notably amp up the profile of a finance professional.