There’s no two ways about it: a lot of financial services firms are cutting costs after a disappointing Q1, meaning that they are less likely to replace people who have left and may actually be laying people off. That said, risk management is one area where most firms are unable or at least more reluctant to cut anyone, given the high stakes of a misstep in that area.
So what do you have to do to get a risk job on Wall Street? And what qualifications and credentials can give you a leg up?
“The most in-demand candidates right now are core modelers in the loss forecasting-space, coming in at the four-to-six-year mark,” said Kareem Bakr, the head of credit risk recruitment, Americas, at Selby Jennings.
Academically, these individuals will typically come from traditional STEM backgrounds, such as statistics and applied mathematics, he said.
Credentials and qualifications to land a risk job
Candidates with experience across consumer and commercial backgrounds are always in high demand. Essentials include knowledge of probability of default (PD) and loss given default (LGD) modeling and exposure to Comprehensive Capital Analysis and Review (CCAR).
“Now that CCAR season has just about finished, [hiring] managers with needs in this space now have the time to thoroughly vet candidates and focus on adding a significant amount of headcount,” Bakr said.
Many companies are shying away from the strict demands for Ph.D. graduates and are now more interested in someone with a Master’s degree and real, relevant working experience, he said.
It is common for risk management professionals to get jobs with a B.A. or B.S. degree, while M.B.A. and M.A./M.S. were neck-and-neck in second and third place, respectively.
“CFA certifications are a nice touch to your resume; however, most [hiring] managers do not feel it adds too much extra value,” Bakr said.
The CFA is far and away the most common certification among U.S. risk management professionals in the eFinancialCareers Resume Database, while the CPA is a distant second and the Financial Risk Manager (FRM) qualification from the Global Association of Risk Professionals (GARP) in third, gaining momentum.
Position yourself as a jack of all trades
For entry-level candidates looking to target quantitative roles, he recommends keeping an open mind with regards to job function. Managers are bringing candidates in with the idea that they can be utilized across different functions, for example, someone who can do both development and validation.
The same goes for non-quantitative risk positions, as more companies are looking for a jack of all trades rather than a subject-matter expert. Across the industry, operational risk groups are working closer with model governance and regulatory teams.
“Having a broad knowledge across the board will better position you for the next step in your career,” Bakr said.
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