There’s no question that the income one can earn in an activity is a primary driver for choosing a career. However, as anyone in an industry will agree after some experience, a salary alone isn’t enough to keep a person in a job. You have to like what you’re doing and feel some sense of purpose beyond just the paycheck. However, it doesn’t hurt to be making a good income at the same time as well.
The certified or chartered financial analyst, or CFA, has a lot of promise when it comes to a lucrative career, but it’s not a guaranteed salary like a traditional employment role.
Professional License Value
First off, the salary of a CFA reflects the professional status of the person. A CFA isn’t simply a business shingle that one hangs outside their office door. It represents a certification and licensing in a financial skill and capability that requires the holder to perform their function with a fiduciary duty as well as a high level of skill and ethics.
As a result, a CFA professional automatically commands a higher salary for their work than a generic analyst or even an economist. The reputation and professional license involved are at stake. And if that license were to be revoked, the professional could no longer work as a CFA. So it matters quite a bit, and the salary level reflects that training and competency effort.
Second, the CFA’s salary is going to vary by region and geographic location. Clearly, being located in or near major urban areas such as New York City or Los Angeles or Chicago will command a higher figure than someone located in Ashland, OR, or Waco, TX. In addition, if the CFA is working independently or as part of a large, well-known organization, it will make a difference as well.
Given the size of accounts and clients, large corporation positions are going to be rewarded with higher compensation in many cases than a CFA might earn independently as a sole agent.
Third, experience matters quite a bit. New entries and CFAs who have been working for only a few years will likely earn near a respectable salary of under $70,000. On the other hand, those with five years to a decade of experience will earn a bit more, closer to under $90,000 annually. Where the high point in the salary range is realized comes in the extensive experience category, with those near or over two decades of work earning over $155,000 annually.
Industry Variations Happen
Fourth, the industry the CFA works in can have some impact on the range of salary possible. Some industry types will offer far greater figures and opportunities than others. Banking, for example, as well as insurance, tends to be at the top of the range. Wealth management, which typically services retirees looking to protect and extend their savings into later years, tends to be in the lower range, often serviced by independent CFAs versus those working in big firms and corporations. The investment industry oftentimes lands in the middle of the salary range between everything else.
CFA salaries can be very promising, but one has to pass the CFA exam first before even getting started in the field. Utilizing the right resources for that certification test is critical for success. However, once completed, it has opened to door for career success for a lot of individuals nationwide.
Interesting related article: “What does Financial Analysis mean?“