We are launching Freezing Assets with the release of our Compensation Survey results, which you may find on the site now and is downloadable at this address: http://freezingassets.org/2013/10/compensation-survey-results//. The Compensation Survey was a big success with more than 500 respondents from our region. And it provides a great overview of compensation levels, practices, and trends across the Upper Midwest. This highly-sought-after piece is a welcome addition to the local market.
So that’s how much CFAs in Minnesota make, huh? Clearly some small sample issues…buy-side equity analyst makes 70k less than buyside fixed income analyst with similar experience, with the difference all in the bonus? Psha
Yep, sales pays. I was thinking about taking a client PM role for this exact reason. Did you notice that the base salary and bonus do not add up to the $450k quoted as total comp? Curious…
CPM’s make a little less. They’re in the $250-325k range because it’s harder to track sales attributed to their efforts. Their comp is generally more activity based, so prepare to travel 80% of the time.
As for Institutional Sales, $450k is a little low, but not that far off for a year with no extraordinary wins. Get a few block wins of a couple hundred million and that number goes up fast.
I think CPM depends where you work, to an extent. Do you see overlap between whoesaling and institutional sales? I just have a lot of contacts throughout the research teams, consultants, big family offices and the like that I’ve built over the last ten 7 or 8 years, so thinking about whether it makes sense to leverage that.
Yeah, there’s definitely overlap. If you think about a family office or huge RIA it’s hard to draw the line and say it’s retail (wholesale) or institutional. Generally things like DB plans, endowments & foundations, and gigantic DC plans would clearly be institutional; and an RIA would almost always be retail. But, what happens when an RIA has $5B under management with $3B in DB plans and endowments, and $2B in private client assets? It’s a touchy subject between sales teams.
IMO, it’s actually easier to make bigger bucks being a wholesaler, but it’s much more of a grind than institutional sales. Plus, you have to deal with a lot of idiot advisors. Sure, making $700k a year is awesome, but you have to talk to Ed Jones advisors…ew. The flip side is you get sales every day as a wholesaler and it’s much easier to track your sales where as institutional sales guys may only have one or two sales a year…sometimes none.
When I was closer to trading side of the business, the old ladies I used to work with hated when the sales people came into town. But for me, I loved the steak house lunches followed by some debauchery later in the afternoon.
Overall, I think there are more fixed income jobs available in the region which might explain the larger number of FI folks responding to the survey. I’m not sure about all the other positions but the buy-side FI salaries look accurate.
The FI market is about 4x the size of the equity market; that’s an old number, so it may have changed in the past few years, but it’s not an order-of-magnitude change. So the % on AUM should produce a higher payout pool for total compensation.
Fixed income research tends to be more mathematical and therefore tends to have higher quantitative requirements that firms presumably have to pay for. The more mathematical aspect has to do with the fact that fixed income payouts are more predictable than dividend or earnings for equity valuation. As a result, you can do more calculations before the random factors start to mess things up, compared to equities.
The big investors in fixed income funds are institutional investors, and other large organizations that have liabilities to manage. So they may find more value in a good FI manager than a typical mom & pop retail investor, who tends to see FI as “safety” rather than an asset to use to attempt to outperform.