Hi!
Welcome to this informative session on CFA salary.
In this article, we’ll dig deep into how much CFA earns throughout their career.
We’ll talk about how experience, education, location, and industry influence CFAs’ earning potential.
In a nutshell, we’ll cover:
We’ll go further and give you an overview of the CFA salary by education and geographical location.
Stay with us as we delve into this crucial aspect of a CFA career!
An Overview of CFA Charterholder Total Compensation
According to Payscale.com, chartered financial analysts earn an average of $81,862.
The platform indicates that the base salary ranges between $55,000 and $154,000.
In contrast, the CPA Society shows that the average total compensation for CFAs is $300,000.
The Society revealed that the median total compensation for these financial professionals is $180,000
CFAs’ total compensation constitutes base salary, cash bonus, and company equity or profit-sharing.
A CFA’s compensation varies depending on the organization.
Some employers include stock options, performance bonuses, and commissions.
Hence, the total compensation for a CFA charter-holder is more likely to be higher than for other financial professionals.
More than the employer’s compensation structure, other factors such as job title, years of experience, industry, education, company size, and location also influence the actual amount CFAs earn.
Let’s now look at how these factors influence a CFA charter-holder salary.
CFA Average Salary by Job Title
CFA earnings depend on their job title.
The CFA Institute breaks down CFA salary by job title as follows.
Fixed income portfolio managers earn a median salary of $253,250.
On the other hand, Equities portfolio managers have an average median salary of $316,600.
Portfolio managers make up 22% of the CFA charter-holders.
According to the institute, only 7% of CFA make it to the C-suite level, that is, the executive positions.
The job titles at this level include the chief investment officer (CIO) and the chief financial officer (CFO).
The chief investment office earns a median base salary of $334,500, while a chief financial officer earns $227,500.
Financial analysts’ average annual salary is $80,930.
CFAs who work as consultant managers take home an average median base salary of $74,000.
Those who hold the research analyst position earn an average salary of $73,954.
Relationship managers’ average salary is $120,000.
CFAs working as financial advisors take home an average income of $110,000.
Lastly, we have risk managers.
These investment professionals are paid a median salary of $126,000.
Chartered Financial Analyst Salary by Years of Experience
The more experience a CFA credential holder has, the higher their salary.
Payscale gives a salary range of between $55,000 and $154,000.
According to the compensation website, entry-level CFAs with less than one year of experience earn an average of $79,136.
Investment professionals with 1-4 years of work experience earn an average annual salary of $85,000.
The average CFA salary for those in the mid-career, 5-9 years of experience, is $88,000.
Experienced CFAs with 10-19 years of work experience get paid an average of $142,500.
The chartered financial analysts who’ve stayed in the industry for over twenty years make an average of $142,500.
CFA Salary by Industry
A study by Analysis Prep shows the rankings of different industries and how much they pay CFAs.
Investment banking tops the list of top-paying industries with an average salary of $93,000.
The second industry is insurance services, paying CFAs around $90,000.
The third position is asset management, where CFAs’ annual salary is $88,000.
Financial services are the next top payers, with CFAs earning about $86,000.
CFAs working for investment services earn around $80,000.
And finally, the wealth management industry pays CFAs $76,000 annually,
The Balance Career website gives a different perspective on CFAs earnings by industry.
The site categorizes the industries into college and university, hospital, government, private practice, foundation and trust, and self-employment.
CFAs working for colleges and universities earn around $75,000.
Local, state, and federal governments pay CFAs between $81,400 and $87,000 a year.
CFAs in corporate finance earn $85,000 annually, while those based in hospitals earn around $92,000.
Finally, chartered financial analysts working in foundation and trust get around $100,000.
CFA Average Salary Company Size
The smaller companies tend to pay lower salaries for the obvious reason that they have fewer clients and resources.
Bigger companies pay better than smaller ones, but the difference is not extreme.
CFAs working for big firms in the finance industry like JP Morgan, Ernst $ Young, UBS Group, and Goldman Sachs Group make the most in the industry than their counterparts with the same level of experience and designation in smaller companies.
These investment professionals earn an average of $102,200 per year.
On the flip side, companies with between 200 and 599 employees are the lowest payers, with an average of $81,500 annually.
Smaller companies with ten or fewer employees are not doing very bad.
CFAs in these firms take home around $84,000.
Companies with 10-49 employees pay CFAs an annual average salary of $88,100.
Mid-size firms boasting 50-199 employees are also not badly off.
These companies pay around $90,300 annually.
CFA Salary by Education
We all know that all CFA charter holders have passed the CFA exam.
And so, the education aspect here is the difference in earnings depending on whether a CFA has a bachelor’s degree or a master’s degree.
The CFA Society reports that CFA with bachelor’s degrees earns slightly lower than their counterparts with a graduate degree.
Graduate CFAs earn an average income of $237,357.
Those with an undergraduate make $162,500 on average annually.
CFA Designation Average Salary by Geographical Location
When it comes to salary by location, CFAs working in big cities like New York or California tend to earn more than those working in areas such as Chicago, Philadelphia or Denver.
According to Payscale, CFAs working in New York city make an average of $99,814.
California also has a higher CFA income of $91,000 annually, with San Francisco leading the pack with an average CFA salary of $98,660.
CFA income in these states is high because the cost of living is equally high.
Other states with relatively affordable costs of living, such as Philadelphia, Denver, or Pennsylvania, have slightly low incomes.
Denver has an average CFA annual income of $84,412.
CFAs working in Philadelphia are paid around $86,375,
CFAs income in Illinois and Texas make $85,000 annually.
Investment professionals working in Massachusetts take home an average of $84,000.
Conclusion
CFA designation is highly coveted and for a good reason.
The charter-holders earn considerably higher than other financial professionals in the finance industry.
The CFA income gets better as charter-holders acquire more experience.
Apart from experience, the CFA salary varies depending on where a CFA charter-holder lives, their industry, company size, additional education, and job title.
Given the statistics of CFA income and the potential to earn more, it’s obvious that the certification ultimately pays off.
