CFA Investment Banking Salary

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If you are interested in becoming a CFA, you may already know how much the salary you will earn. However, the salary of a CFA is not fixed on a certain nominal, since it will also depend on job function and region. In fact, there are a variety of CFA roles across the investment industry.

A CFA Charterholder does not only earn the base salary, but they also earn a significant amount of compensation that comes from the base salary, long-term incentives and any bonuses. If you are wondering how much the salary of a CFA is, you can dive into our post since we will show the real information about it below.

How Much Is the Salary of a CFA Investment Banking?

As we’ve mentioned, the salary of a CFA will depend on the roles of a CFA in the industry. One of the CFA roles in the finance industry is investment banking. Of course, the salary of an investment banking worker will be different from the salary of Portfolio Management, Equity Research and even Corporate Development.

According to some internet sources, the CFA Charterholder Portfolio Manager Base Salary is around $127,000 and the salary of the CFA Charterholder Portfolio Manager Total Compensation is approximately $177,000.

In the Investment Banking division, there are also some sub-divisions such as Analysts, Associate and VP/Director/MD. Here’s the detailed salary of each position:

  • Analyst: $100,000 to $150,000 (base salary plus bonus)
  • Associate: $150,000 to $300,000 (base salary plus bonus)
  • VP/Director/MD: $300,000 to $1,000,000+

It’s important to note, there can be a wide range based on the bank, the region you are working in and the year you receive your salary.

In addition to knowing the salary of a CFA in investment banking, we will also show you the CFA compensation by job title. Well, averages do not provide the full picture, since there is a wide range for CFA salary, depending on the specific job title.

Here’s a breakdown of medial total compensation by job type:

  • Financial Analyst (corporate) $80,930
  • Portfolio Manager (fixed income) $253,250
  • Chief Investment Officer $316,600
  • Portfolio Manager (equities) $344,500

How Does the CFA Investment Banking Division Work?

So far, the investment banking division (IBD) of an investment bank actually helps corporations, governments and institutions increase capital and complete mergers and acquisitions (M&A).

Career on investment banking is highly demanding with analysts frequently working 100 hour per week. Of course, the competition to apply for this position is intense, compensation is very high and also the job’s profile is extremely high. However, the tradeoff is long hours, a lot of grunt work and a military-like culture.

To be a CFA on Investment banking division, you must have the following personality:

  • Highly ambitious
  • Competitive
  • Detail oriented
  • Quantitative
  • Polished and presentable

How to Apply for CFA Investment Banking Position?

It’s known that there are two primary entry points into investment banking, including:

  • Analysts

The position of analysts is recruited from undergraduate (B. Com or B.A) programs at reputable schools or universities. In this case, an analyst is commonly expected to stay at the position for 2 to 3 years, at which point that they will either be promoted, go back to business school or move on to something else.

  • Associates

The position of associates is recruited from MBA and/or other graduate student programs. In this case, strong analysts may be promoted to associate roles, but typically analysts will be required to go back to school before being promoted.

Well, the associates actually have similar responsibilities as analysts, but it takes on more responsibility quickly and are on the fast track or promotion. Of course, both roles will require extensive financial modelling and presentation building skills.

Additionally, analysts or associates commonly go on to work in private equity, in-house at a corporation, equity research or do something entirely different. Well, most investment bankers wish to graduate to PE and the banks are natural feeder systems for those firms. In this case, corporate development is a pleasant stepping stone from IB that provides exposure to similar transactions, on the client side.

To have a bigger chance of being a CFA investment banking division, you may need to take investment banking courses. This is an invaluable way to learn what is required on the job before you get hired. You can start with a solid understanding of accounting fundamentals.

Afterwards, you must have a solid Excel crash course under your belt that will teach you the basics such as formulas, shortcuts and functions. From there, you will be able to progress to financial modelling courses that can be the basis of your day-to-day job in IB.

If you take a few courses, you definitely can learn about a variety of industries and view different types of models. There are a number of CFA prep providers you can choose such as Kaplan Schweser, Salt Solutions, The WallStreet School, etc.

How to Increase Your Pay as a CFA Investment Banking?

The key to increasing your CFA salary is by making yourself more valuable that includes the strategies such as taking on a cross-functional role, asking for more responsibility, upgrading your technical financial skills and mentoring junior team members. You may also need to become a lynchpin and an indispensable member of the team.

Aside from that, you may also have to know the current wage market for your skill level and job function. If a certain skill you have raises your wager potential or if you notice you are being underpaid, you don’t hesitate to negotiate a raise during performance evaluations.

The key you must notice here is to prove your worth through your work and to perform appropriate research into what level of compensation your knowledge and skill set should command.

For more information, analysts and associates who are working in the IBD of a bank will spend a lot of time establishing financial models in Excel. Well, the common examples of the types of financial models include three statement models, M&A models, DCF models, LBO models and more.

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