Salaries for junior and mid-level positions in the funds industry have remained roughly flat over the past three years, and have dropped slightly in a small number of areas, according to a specialist recruitment firm.
Meanwhile, both pay and the total number of senior roles has generally grown, partially driven by increased regulation and by need to demonstrate “substance” in Luxembourg, Funds Partnership said on Thursday.
Compensation for senior managers is systematically “pushed up” by increased visibility with clients and responsibility with regulators, Rana Hein-Hartmann, co-founder of Funds Partnership, said in a webcast to present its 2019 salary guide.
The “Funds Partnership Salary Guide 2019” is based on the actual job offers given to candidates by the recruiter’s clients, Hein-Hartmann stated during the 13 December web conference.
Asset servicing and custodian & depositary banks
Pay in the asset servicing segment has “gone up the most” of any category in the salary report, stated Hein-Hartmann. For example, wages for mid-level and senior managers with risk oversight responsibility rose 10%-15% compared to 2015. At the same time, a fund accountant makes about the same as three years ago.
Asset managers and management companies
Funds Partnership has “seen massive growth in third party services”, she said during the webcast. Brexit has helped play a part in this. Many smaller UK money managers setting up EU hubs in Luxembourg will outsource functions to third party providers, at least until they better understand the post-Brexit environment.
Due to international tax avoidance rules that require “substance”, or evidence that real decision-making and operations are taking place here, the recruitment firm is “seeing more front office roles” coming to Luxembourg.
The headhunter has seen more movement among mid-level staffers in alternative funds than in any other segment studied. That said, their salaries actually “saw the least change” compared to three years ago, Hein-Hartmann stated. Alternative funds are also bulking up on tax expertise, she noted. In addition, debtfunds have “grown tremendously in the past three years”.
Professional service providers and fiduciaries
The consulting and fiduciary segment is “very active” in Luxembourg, however salary changes were mostly at senior level.
Recruiting from abroad
Despite the boom in funds industry jobs, the consultancy does not aggressively recruit abroad.
It is usually “very difficult to get candidates to move overseas” for mid-level and senior roles, according to Hein-Hartmann. This is due in large part to the difficulty in convincing parents to change their children’s schooling. Candidates that do make the move are often those who already have personal or professional links to the grand duchy.
For example, “nine out of ten” job offers to people employed in London fail in the end, she reckoned.
Hein-Hartmann said Funds Partnership most often advises clients against recruiting from abroad. “We have enough talent in Luxembourg” and the Greater Region.