He moved into financial services IT and has stayed there, working as a freelancer focused on three areas - asset management middle office technology, the interface between the investment company and the client, and on Internet work, although currently he is working on Sarbanes-Oxley, the American accounting compliance requirement, for HSBC.
Moss characterizes his work as stepping in between the business side who want things done and the technical people who can make things happen. "I am someone who can facilitate communication," he says. "The most important skill is applied common sense."
But he also keeps up with technology in a broad sense so he can evaluate what people tell him systems can do. "If you had asked me 20 years ago it I would still be doing this now, I would say no way, it is a young person's game," Moss says. "But age doesn't seem to matter in the freelance business, unlike staff positions."
In his determination to work as a contractor, Moss has a lot of company these days. Simon Walker, associate director at the Partners Group, says the biggest trend he sees in financial IT is employees who want to go independent. At least once a week he hears from someone who hopes to make the switch.
Where to look
Independent contracting is a great fit for some, but certainly not for all, he warns.
"If you are a person who gets quite bored easily and dislikes the politics aspect in a job, and you're not worried too much about actual career progression but want to be autonomous, then really there is no other option," Walker says.
Hot fields where independent contractors can find work easily these days include implementing front office order management systems, such as Charles River or Latent Zero, or just about anything in fixed income if a developer has five years of experience and knows the business as well as the technology.
Working as an independent contractor isn't secure - but then again, neither is a staff job. Contracts, says Walker, average around seven months, but contractors are the first to go in an economic downturn. And while freelancers can support a family and a mortgage, they have to be smart about managing their money. "A big mistake is thinking you can pocket the big rate and not put aside money for pensions and other benefits," he says. "I have contractors with families, but they save huge amounts. And where their job is risky, their style of investing is risk averse."
Most banks aim for 15% contract staff for flexibility, but in high demand areas independents can make up to 95% of the workforce because the banks simply can't hire full time employees.
Pay ranges widely. Junior developers will often be paid by the hour, so they try to work as many hours as possible. More experienced freelancers are paid by the day, from 400 to 1,000. They might be expected to work slightly longer hours than permanent staff, but not above an extra five to seven hours a week.
"As a contractor you become your own brand and your name is everything," Walker says. "That is why I always tell my contractors, 'You do realize you are no longer an employee, but your name is your brand.' If you are permie you have the room to maybe mess up a bit."
Should you consider becoming a contractor? What follows is a list of questions Simon Walker at the Partners Group poses candidates:
What levels of risk are you willing to take?
- No sick pay
- No paid leave
- No benefits such as health care/life assurance/pension
- 1 - 4 weeks termination notice no reason/warning given
- Rate and amount of work reliant on market
Pay: A rough method of working out your day rate (if the market is very good add 25% to final figure):
- Salary divided by 230 working days in a year (includes 2 week holiday) = x
- x + 50% (Benefits) = a
- a + 50% (Risk) = a rough day rate
How familiar are you with accounting?
Are you willing to incur breaks in pay (when out of contract)?
- You like change
- You hate politics
- You are not concerned with moving up the career ladder
- You are delivery focused
It's sensible to have money in the bank before leaving a steady job and going into contract work. A contractor's agency should pay within 10 days from receipt of invoice; avoid agencies that take 30 days to pay. And if you don't go through an agency you'll have to become a debt collector, and big banks are renowned for paying slowly, says Walker.
Set up a limited company through an organization that specializes in this, or through an accountant. Walker refers clients to Orange and Gold. Jonathan Shellard, managing director there, says his company offers a way for contractors to maximize their income under the UK tax regulations such as IR 35.
Shellard will set up a management company that the contractor is a shareholder in. For high-end finance professionals, this can offer significant tax savings. "We act as the office, manage it, and take the directorship to his tax advantage," he says. For a consultant earning 100,000, the cash benefit of the company structure could be 10,000 per year.
"We conduct a risk evaluation at the outset and if we are happy the contractor has a strong defense we indemnify him 100% against tax and social security," Shellard says. "We charge five percent - the contractor pays a premium - but if we lose the IR 35 status argument, we will take the hit, so he has certainty of income." Only the most defensible contractors are accepted into this program.
Lower level workers will generally be taxed on their pay although they can shelter some earnings through expense allowances.
In the middle are contractors whose status is difficult to determine, and if the Inland Revenue challenge their status, they can take it to arbitration. "There isn't a lot of activity in the courts because that gets stressful and costly," Shellard says. "People tend to settle early. You never know where the decision will fall, but I would guess the tax office wins more often."