Salaries rising for investment professionals, survey says

(June 2, 2005) Senior executives in the Canadian investment industry are expected to earn median compensation of $125,000 this year, up 9% from two years ago, according to a survey released today by the CFA Institute and Russell Reynolds Associates.

The survey examines the compensation of portfolio managers, securities analysts, pension officers and other senior-level investment professionals at an array of investment management and financial services organizations.

Investment professionals with at least 10 years of experience received a 14% increase in their overall median compensation to $210,000 in 2005, up from $183,500 in 2003.

While the trend is positive, compensation rates are still off their 2001 peak — a familiar situation for investment professionals around the world, the survey notes.

“We continue to see a vibrant and competitive market for top investment management talent, particularly in the senior ranks,” said Shawn Cooper, head of Russell Reynolds’ Canadian financial services practices.

“It’s interesting to note that large public funds in Canada have started to compete with the private firms for the best investment management talent and while compensation levels are up significantly, so are their returns,” he added.

Similar to previous years, hedge fund professionals are still the top earners in Canada with median compensation of $235,000. Executives at investment counseling firms and securities firms were next, earning $151,000 and $145,500 respectively, while pension plan sponsors made $140,000.

Incentive compensation accounts for 26% of median compensation at hedge funds and 32% at broker/dealer firms.

Investment professionals at Canada’s large mutual fund companies in Canada were at the bottom of the compensation list, with median compensation of $99,250.

Investment professionals with the CFA designation earned significantly more than their peers without the charter — $130,000 compared to $103,500.

The survey also breaks down compensation by major cities in Canada. Investment professionals living and working in Calgary are the most highly compensated, earning 14% more than the median.

However, when experience is taken into account (at least 10 years in the industry), Toronto leads by a wide margin.

Professionals employed in Vancouver rank third on the compensation list while those in Montreal were fourth. Bonuses for executives in Calgary and Toronto were also considerably higher than in the other two cities.

There’s a gender gap in the Canadian investment industry, at least in terms of compensation, the study revealed — overall, Canadian women make 14% less then their male colleagues.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com