Financial services contractors earning more than twice the UK national average wage
According to Procorre, an international professional services consultancy that operates in all business sectors across 120 countries, consultants working in the financial services sector earn on average £69,341*.
This is more than double the UK national average wage of £26,500**, and their earnings are expected to grow even higher as the City continues to recover from the financial crisis.
The annual pay for consultants specialising in financial services has shown a slight decline in recent years, from £71,142 to £69,341 over the past two years. This is a decrease from 172% to 162% more than the UK national average wage, so income for contractors specialising in financial services still remains considerably higher than the national average.
Procorre explains that although specialists in financial services have traditionally been the best paid contractors, pay growth has been constrained by the banks’ cost cutting in the aftermath of the financial crisis and new regulation.
However, with City firms now starting to report growth in profits and business volumes, it is expected that fees for consultants in financial services will start to rise. It is estimated that there are now over 1 million jobs in the sector.
Procorre says that the experience and skills that consultants bring to a role gave financial services firms the opportunity to adapt to the changed economic circumstances banks and City firms were faced with after 2008.
Lisa Mangan, Relationship Manager at Procorre, comments: “With the financial services sector rebounding from the credit crunch, consultants and contractors in this area are likely to be even more in-demand, with firms looking to take advantage of their skills to put new growth initiatives and other projects into action.”
“As demand grows, the best consultants in the market, who have typically already built a very financially rewarding career, will have the opportunity to be very selective over who they work with. For the employer, making sure that they can offer the best remuneration and most rewarding environment will become increasingly important. The right package will often be needed to tempt the very top consultants to take on more work.”
Procorre says that demand for financial services consultants is being driven both by projects within existing financial services providers, and by new entrants to the industry. In particular, demand for regulatory consultants is strong as existing banks look to implement the safeguards now expected by regulators.
Recent newcomers to the sector include the so-called & lsquo;challenger banks’ such as Metro Bank and Aldermore, which both hope to build market share in the personal and SME banking markets, while investment banking and asset management start-ups include ex-Barclays’ boss Bob Diamond’s new Africa focussed bank, Atlas Mara, and Neil Woodford of Invesco Perpetual’s new firm Woodford Investment Management.
New bonus rules reduce attractiveness of permanent employment at banks
Procorre points out that new European bonus rules limiting bank bonuses to 100% of salary (or 200% if the bank gets shareholder approval) have diminished the attractiveness of working as a permanent employee.
Lisa Mangan adds: “The financial crisis has led to sweeping changes to bonuses for permanent staff at banks, which has shifted the relative attractiveness of working as a permanent employee towards working as a financial services consultant or contractor.”
“Bonuses for permanent financial services staff are still very attractive compared to many other sectors, but they are now often much less attractive than they used to be. However, working as a consultant offers the freedom to pick the highest paid and most interesting roles.”
*Excludes contractors earning less than £500 per year. Most recent data available