A survey of how much CFA charter holders make offers some interesting insight into compensation and the designation.
How much do CFA charter holders make? It’s one of the most asked questions here on the FinQuiz blog and one of the most popular among candidates. Makes sense, why would you spend upwards of 1,000 hours studying and make other sacrifices without a little monetary compensation?
The CFA Institute last ran its CFA Charter holder Compensation survey in 2015 and offers an interesting look into how much designation-holders earn. Your preference for a particular sector of finance should play an important role in your job decisions but money is always a big motivator as well.
Let’s take a closer look at the compensation survey.
The most recent charter holder compensation survey I found was for Canada, completed in August 2015. There are also older surveys available for local societies in the U.S. and globally but the nationwide survey gives us a good overall look at how much CFA charter holders can make.
The 2,606 charter holder respondents were mostly men (83%) with an average age of 39.7 years and in their current position for 5.6 years. Total average career tenure was 15.1 years for respondents. The range of employers was fairly large with asset/fund management firms employing nearly a third (27%) of respondents followed by investment counseling (11%), sell-side brokerage (7%), pension management (6%) and IB, insurance, financial services and commercial banking each accounting for 5% of responses.
More than three-quarters (77%) of respondents receive a performance bonus with 13% entitled to profit sharing and 22% receiving stock awards or options as part of their compensation. Besides a base salary, other compensation included sales bonuses, multi-year incentives and consulting fees.
The average base compensation was $138,000 with performance bonuses adding another $77,000 for those that received them. Total compensation averaged $280,000 across all recipients (base and bonuses do not add up to the average because of different pay structures).
Of course the average may not be the best measure (remember your quant methods?). The median compensation of $147,550 suggests a large skew to those earning salaries much higher than the group. The top 25% of income earners make between $275,000 and up to $10 million annually. Base salary accounts for a larger share of compensation for newer employees while bonuses and profit sharing grow as job tenure increases.
More than half of the respondents personally manage assets for employers, managing an average of $4.2 billion in AUM. Portfolio managers made the most with an average compensation of over $600,000 while c-suite charter holders averaged just over $500,000 annually. The roles bringing in lower compensation tended to be junior positions and those outside direct asset management like portfolio analysts ($98,906), compliance ($147,700) and marketing ($153,000).
Average compensation was reported higher by 20% from the prior year but up only 7% on an annualized basis over the four years from 2010. Nearly a quarter (22%) of respondents also hold an MBA, followed by master’s degree (17%), CIM (7%), CA (6%), CFP (5%) and FRM (5%). A third of respondents held no other designation besides the CFA.
The full Canada CFA Compensation Survey is available here and offers a lot of information across 79 pages. A lot of detail is provided for individual jobs and definitely worth a look. There are some obvious facts like the link between experience and tenure to compensation but there are also some not-so-obvious facts that will surprise you.
‘til next time, happy studyin’
Joseph Hogue, CFA
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