The most common question asked for people not in the industry is… What’s the pay like? Unlike investment banking the pay is actually a bit all over the map where someone in their mid 20’s could have a differential of up to $40K+. Instead of doing the breakout by “age of individual” we break it up by “years of experience”. Below is the quick takeaway:
Entry Level Junior Associate/Assistant – No MBA (0-1 years of experience): This candidate is usually from a target school and has decided, hopefully, that they enjoy stock picking and believe that it is better than dealing with sleepless nights or selling “salt to a slug”.
- $55,000-60,000 Base with a year end bonus of 25-65% of the base salary = likely around $80,000 all in.
Associate (2-4 years or MBA with no Finance Experience): This individual likely has a few years of experience, has his Series 7, Series 63, Series 83 and Series 86 Licenses under his belt so their name is now officially on research reports. At this point compensation begins to get blurred. These candidates are on their way to either moving up the ladder or becoming “Career Associates”.
- $70,000-90,000 Base with a year end bonus of 30-70% of the base salary = likely around $120,000 all in.
Senior Associate/ Vice President (4-5+years experience or MBA with Finance Experience): At this point most you’ve established yourself as wanting to be in finance longer term or you’ve survived long enough for the bank to want to keep you around. Typically you’ll have a CFA or an MBA and will be on your way to becoming a career associate or a Vice President. Vice President would entitle you to have a few names under coverage (Your name is first on the page).
- $90,000-125,000 with a year end bonus of 30-70% of the base salary = $180,000 – $220,000
Director / Junior Analyst (6-10 years experience): At this level you have companies under coverage, approximately 5+, and are ramping up to become a senior analyst or a Managing director. This is likely your last bump in base salary as you’ll be expected to generate revenue for the firm and gain traction in financial rankings (Institutional Investor, Greenwich and others).
- $110,000-150,000 with a year end bonus of 30-100% of the base salary = $225,000+ (wide range begins)
Senior Analyst / Managing Director (7-10+ years experience): Congratulations! At this point you’ve likely found a “seat” at your firm for the long term that will likely net you $150,000-750,000+ a year if you’re well respected. You have an associate underneath you and are likely traveling quite extensively. But of course, you’re still working ~60-65hrs a week.
- $125,000-150,000 with a year end bonus of 0-350% of the base salary = $350,000+ (wide range)
Takeaways: The graphical depiction says quite a bit about what to expect when moving up the ladder in finance. Similar to the other professions on the sell side, your net pay becomes very contingent on your bonus which is almost entirely revenue/performance based. For those on the younger side, working 60ish hours a week is really not that bad for how much you are making overall but you’re not going to become a quadrillionaire by age 30. More importantly, for those that wish to enter finance for the long haul, remember that saving your bonus is really what makes the job worth it, otherwise you may as well go work for Investor Relations.
