Financial services is buoyant, where are the biggest opportunities?

Throughout 2010, financial services has continued to lead the recovery, posting healthy results. The trend is set to continue, especially within specialised areas.

As a result of increased liquidity and seeing evidence of some economic stability, the strong performing banks had noticable change in sentiment and recruited into their tax teams in the first six months of 2010. Corporate tax teams had been downsized throughout the economic downturn in 2008/2009 and consequently teams were overworked and stretched at minimum staffing levels. These strong performing institutions are continuing to recruit on a permanent and temporary basis throughout 2010.

Whilst the first half of 2010 saw the stronger performers in financial services hire tax professionals, the second half of the year is seeing recently merged and distressed banks returning to hiring. These banks have finalised restructures and are reviewing skill gaps in teams. As a result, interim hires are an attractive solution to cover critical business areas, whilst they formulate a permanent hire strategy.

Moving from the general to the specific, there are several areas of tax that are especially busy and in which interim tax professionals are in demand

• Operational tax teams have grown within investment management and banking as the complexity of tax legislation increases. There is also increased focus on financial regulatory control influenced by the US development of the Foreign Account Tax Compliance Act: ‘FAT CAT’
• Product tax is a busy area after signifi cant improvements in results in asset management. Equity managers and hedge funds are experiencing a sharp rebound due to strong growth in equity markets and investors’ confidence. In the face of increasing complexity of products being offered to investors, tax professionals can monitor the products from an internal risk perspective
• Transfer pricing remains a strong area with continuing challenges from ever-changing policies and regimes. Interim specialists are needed on a project basis to draft and implement transfer pricing policies and restructure existing frameworks
• VAT is a recognised area of demand through the challenging economic environment. The heightened demand for liquidity has meant that this mechanism is high on the agenda. We have seen a notable increase of VAT professionals hired to work on a project basis focusing on system implementation, VAT planning and risk management in the face of recent UK and EU legislative changes
• A distinct growth area is at the newly qualified level. Companies are looking to hire at this level as it is a cost-effective way of injecting teams with good talent and standing them in good stead into the future

The next six months

Financial services will continue to impact positively on the recruitment of tax professionals in the later half of 2010. Working with the majority of large and medium-sized financial institutions, we can advise you on optimal appointments.