The Chartered Financial Analyst (CFA) is universally considered to be the gold standard in the banking and investment industry. Hence why it is a very lucrative career choice, and as per the CFA Institute, the CFA salaries are higher than other finance professionals. CFAs also enjoy faster career advancement and a greater degree of credibility.
However, your salary as a CFA will come down to several factors. Academic background, experience, location of employment, industry, and job title are other critical variables that must be considered.
Contents
CFA Credential Overview
The Charter Financial Analyst (CFA) designation is awarded to those who have completed the CFA Program and have the required work experience. The Program is so designed that you get high skill sets and expertise in investment analysis to advance your career.
To achieve the CFA credential, you must complete a three-part exam on the basics of investment tools, valuing assets, portfolio management, and wealth planning. It is typically taken up by those with backgrounds in finance, business, accounting, or economics. CFAs are qualified to work in the areas of risk management, investment management, asset management, and more
What Do CFAs Do?
When it comes to investment management, CFA charter holders are at the apex of professional development. They are valued by employers in every sector of the global finance industry for their functions and roles in portfolio management, private wealth, consulting, and analysis.
CFAs have the flexibility to take their career paths in different directions and they can branch out into portfolio management, research, consulting, risk analysis, and risk management. In investment management, the sectors open to them are asset management, private wealth management, commercial and investment banking, and insurance. The CFA designation salary depends largely on the roles performed and the level in an organization.
Where Do CFAs Work?
CFA is not a regulatory requirement for a job in finance, even in the investment management area. However, CFAs are increasingly preferred by employers, especially when it comes to rising seniority, because of the high level of expertise and skills that they bring to the table.
As per studies done by the CFA Institute, the percentages of charter holders in Portfolio Management and Research account for about 25 and 12 percent respectively. This is expected as the CFA credential focuses on the investment management sector where these two fields are applicable. This is followed by Consulting, Chief level executive, investment strategy, and risk management at 10, 9, and 7 each percentage respectively.
How Much Can You Earn as a CFA? A CFA Salary Guide
The CFA salary is not the same across industries and is also dependent on the roles and responsibilities assigned and the number of experience in this field. For example, the CFA annual salary varies a great deal between Level 1 and mid-career CFAs.
Let us dive into the median salary and the details at each level.
How are CFAs Compensated?
CFA Level 1 Average Salary
The average base salary of a CFA at the entry level varies from $48k to $ 264k though the average median base salary is about $82,893. Hence, the CFA Level 1 average salary including a bonus that can range from $4k to $24k is anywhere between $67k to $243k, quite impressive for a starting level job in a profession.
CFA Level 2 Average Salary
A CFA holder salary for a mid-career professional, on average, ranges from $65k to $238k. The breakup of the CFA designation salary is as follows for those who have reached the halfway mark in their careers – Base salary $60k to $199k, Bonus $10k to $50k, and Profit sharing $0 to $17k. The average base salary is a respectable $83,844 annually.
Average Salary for CFA Charter Holder
If you check out the CFA salary drawn by a late-career professional, you will find a quantum jump from that of a Level 1 or mid-career CFA. From hovering around the early $80k, the average base salary shoots up to a whopping $142,500 annually, the price of experience and accumulated expertise. Add to it a bonus of $35k and profit sharing of $20k, the total CFA annual salary can pile up from $123k to $464k on the high end of the scale.
CFA vs CFP Salary Comparison
Now, how does the CFA salary measure up against that of a Certified Financial Planner? Considering that the CFA credential is considered the gold standard in finance, there is naturally a wide divergence between the two at the Level 1 and mid-career level. On a comparison of the CFA vs CFP salary, it is seen that the CFA is miles ahead.
The average base salary for a CFA is $86,471 per year while for a CFP, it is much less at $70,918. Taken with Bonus, Profit sharing, and Commission (for CFP), the CFA designation salary ranges between $68k and $213k, and for the CFP it is $53k and $131k, a huge difference by any measure.
