2016 FINANCIAL COMPENSATION SURVEY FINDINGS AND RESULTS. November 2016

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1 2016 FIACIAL COMPESATIO SURVEY FIDIGS AD RESULTS ovember 2016

2 LETTER FROM SOCIETY LEADERSHIP Dear Colleagues, As premier professional organizations for investment professionals, the CFA Societies of Florida are dedicated to being reliable and trustworthy sources of information. Each Society strives to serve members by providing them the resources to aid in their career development and advancement. We are excited to announce the highly anticipated findings of the 2016 Financial ensation Survey. The survey, which had been void in the market since 2007, provides a region-specific analysis of compensation levels for investment and financial professionals. This whitepaper captures the findings of the survey, providing an overview of the survey-wide results. For those who participated in the survey, we thank you for your contribution to this important market resource. We are confident the information contained in this document will be of value to you. Regards, Chris Squittieri, CFA President, CFA Society aples Matt Hansen, CFA President, CFA Society Orlando Ursula Auger, CFA President, CFA Society South Florida Benjamin Padilla, CFA President, CFA Society Tampa Bay 1

3 EXECUTIVE SUMMARY Executive summary Access to accurate and data-driven information plays a significant role in the ability of financial and investment professionals to effectively perform in their careers. The same is true to successfully advance one s career. The 2016 CFA Societies Financial ensation Survey seeks to provide access to this vital information. This report is a compilation of the results from a survey on compensation practices in aples, Orlando, South Florida and Tampa Bay conducted earlier this year; 255 professionals completed the survey. Remaining true to the stated commitment to provide an accurate snapshot of the compensation levels for the entire financial and investment industry, the survey findings are presented to demonstrate compensation based on the most popular positions and other demographics. The survey requested self-reported data on numerous aspects of compensation. In addition to covering base salary and total compensation, the survey addressed the respondent s CFA Charterholder status, level of education, and occupation. Information on the type and size of the firm as well as the amount of assets under management were included in the survey. The survey captured annual salary change data and the respondent s view on the adequacy of compensation and the desire to explore other job opportunities. The 2016 Financial ensation Survey data and exhibits are intended to provide general guidance for comparing compensation levels with overall values for key categories. ote that actual compensation potential may vary relative to the numbers generated by the survey given the use of relatively broad category definitions. Also, the estimation of compensation based on any single factor may not predict reasonably accurate estimates. Details surrounding actual job responsibilities and the confluence of multiple factors may result in higher or lower compensation levels. Median total compensation Our data show that professionals who attain the CFA designation and/or a graduate degree tend to have higher compensation levels. Bachelor degree Graduate degree on-charterholder CFA Charterholder $82,900 $161,000 $129,000 $192,650 2

4 RESPODET PROFILES Years of experience < 2 years 7.0% 11.0% 29.0% 28.0% 2 5 years 5 10 years years 20 + years 26.0% Education Some college but no degree Associate degree Bachelor degree Graduate degree Doctorate 0.8% 0.4% 50.2% 45.9% 2.7% 96.5% of those surveyed report that CFA Charter designation has helped career 21.0% Candidate Charterholder status 67.0% Yes 13.0% o Feel fairly compensated Feel valued by their company 69.2% Yes 30.8% o 73.9% Yes 22.4% o 3.7% /A 3

5 RESPODET PROFILES Employer size < % 50 to < % 250 to < % 500 to < 2, % 2,500 to < 5, % 5, % Opportunity for advancement within company 25.3% o 51.4% Yes 17.1% ot sure 6.1% /A 22.9% Very unlikely Likelihood of looking for a new role in % Very likely 40.0% Unlikely 20.4% Likely AUM of firm < $500 million 18.0% $500 million to < $2 billion 9.0% $2 billion to < $10 billion 13.0% $10 billion to < $50 billion 12.0% $50 billion to < $100 billion 3.0% $100 billion 26.0% ot applicable 19.0% 4

6 RESPODET PROFILES Fifteen most common occupations FinancialAdvisor/Broker Bank/Trust/Private Client Portfolio Manager Financial Analyst (corporate) Portfolio Manager (equities) Chief Investment Officer Private Client Professional (other) Accountant/Auditor Manager Research (equity) Performance Analyst Portfolio Manager (indexed/other) Buy-side Research Analyst (equity) Consultant Portfolio Manager (fixed income) Chief Executive Officer Institutional Sales Representative/Relationship Manager 12.9% 12.5% 9.0% 7.8% 4.7% 3.9% 3.1% 3.1% 3.1% 3.1% 2.7% 2.7% 2.4% 2.0% 2.0% Organization type Investment Management Firm Investment Bank, Commercial Bank, Brokerage Firm Other Consulting, Accounting, Law Firm Family Office Educational Institution Insurance any Hedge Fund or Fund of Hedge Funds Corporate Plan Sponsor Government Agency/Department 38.0% 26.0% 19.0% 8.0% 3.0% 2.0% 2.0% 1.0% 1.0% 0.0% 5

7 FIACIAL COMPESATIO Types of compensation in addition to base salary Cash/Bonus Performance Employer 401(k) Contributions Profit Sharing Restricted Stock Awards/Phantom Shares Commission/A Sales Bonus Deferred/Multi-year Earnings 82.0% 76.0% 21.0% 17.0% 14.0% 6.0% Stock Options 4.0% Discretionary and business unit/division performance were the top two determinants of bonus Expected change in total compensation 46% Increase 0 10% Decline 2.0% Stay the same 22.0% Increase 10 20% 21.0% Increase > 20% 8.0% Average ideal compensation structure for selected occupations Occupation Bank/Trust/Private Client Portfolio Manager Financial Advisor/Broker Financial Analyst (corporate) Portfolio Manager (equities) Chief Investment Officer Private Client Professional (other) Manager Research (equity) Performance Analyst Portfolio Manager (indexed/other) Consultant Base Cash bonus Long term Other 72.3% / 21.7% / 5.5% / 0.5% 55.8% / 29.8% / 4.6% / 9.8% 80.8% / 13.0% / 5.0% / 1.2% 72.9% / 20.8% / 6.1% / 0.3% 61.7% / 23.3% / 7.5% / 7.5% 65.0% / 27.5% / 6.0% / 1.5% 68.6% / 21.4% / 9.4% / 0.6% 86.1% / 10.8% / 3.0% / 0.1% 73.1% / 20.0% / 6.3% / 0.6% 77.1% / 17.9% / 1.4% / 3.6% 6

8 FIACIAL COMPESATIO Median and 75 th percentile total compensation by occupation Base Bonus Other Total Financial Advisor/Broker 69, , , , th Percentile 100,000 91,859 35, ,000 Bank/Trust/Private Client Portfolio Manager 154, , , , th Percentile 182,500 50,000 35, ,250 Financial Analyst (corporate) 63, , , , th Percentile 81,750 9,750 5,500 95,850 Portfolio Manager (equities) 125, , , , th Percentile 150,000 50,000 21, ,475 Chief Investment Officer 192, , , , th Percentile 237, ,000 66, ,500 Private Client Professional (other) 114, , , , th Percentile 180,000 53,750 13, ,725 ensation satisfaction vs. likelihood of looking for new job Individuals who do not feel they are fairly compensated report they are more likely to look for a new job than their counterparts who believe they are fairly compensated. Fairly compensated ot fairly compensated 7.8% 29.8% 22.1% 48.2% 36.4% 13.1% 33.8% 8.9% Very Likely Likely Unlikely Very Unlikely 7

9 FIACIAL COMPESATIO Reported median compensation for those with less than 5 years of experience for selected occupations Base Bonus Other Total Financial Analyst (corporate) 55, , , , Financial Advisor/Broker 60, , , ,250 6 Median total compensation for those with less than 5 years of experience is $70,500 Median total compensation for those with 5 to less than 10 years of experience is $111,500 Reported median compensation for those with 5 to less than 10 years of experience for selected occupations Base Bonus Other Total Financial Advisor/Broker 75, , , ,000 9 Financial Analyst (corporate) 78, , , ,000 8 Bank/Trust/Private Client Portfolio Manager 112, , , ,250 6 Buy-side Research Analyst (equity) 115, , , ,

10 FIACIAL COMPESATIO Reported median compensation for those with 10 to less than 20 years of experience for selected occupations Base Bonus Other Total Financial Advisor/Broker 69, , , , Portfolio Manager (equities) 130, , , ,000 9 Bank/Trust/Private Client Portfolio Manager 158, , , ,205 8 Chief Investment Officer 142, , , ,000 5 Median total compensation for those with 10 to less than 20 years of experience is $176,250 Median total compensation for those with more than 20 years of experience is $274,000 Reported median compensation for those with more than 20 years of experience for selected occupations Base Bonus Other Total Bank/Trust/Private Client Portfolio Manager 180, , , , Financial Advisor/Broker 100, , , ,500 8 Chief Investment Officer 230, , , ,000 7 Chief Executive Officer , ,000 5 Portfolio Manager (equities) 128, , ,800 5 ote: Cells in gray reflect fewer than five responses. 9

11 SURVEY METHODOLOGY Survey methodology Method The CFA Societies of aples, Orlando, South Florida and Tampa Bay shared an online survey with financial professionals in their respective market areas. The survey was structured so all data gathered were anonymous with no identifiable information requested. Respondents Respondents were financial and investment professionals, and totaled 255 unique and completed responses. Timing The survey was active from April 18 May 13, Assumptions The findings from this survey were derived from self-reported data. Because the survey used sampling methodology and broadly defined positions, survey findings are not necessarily representative of the total population. The survey is designed to provide general information about pay levels within the industry. Earning any degree or professional designation is no guarantee of employment or compensation. 10

12 ABOUT THE SOCIETIES About the CFA Societies of Florida The CFA Societies of Florida are the premier professional organizations for investment professionals to connect with Chartered Financial Analysts throughout the state. Each Society strives to serve its broad membership through relevant educational programs, membership support services and opportunities for advancement such as networking events, discounts on educational materials, and more. If you are interested in learning more about earning your charter, or about the CFA Society in your area, please click on any of the images below. Follow CFA aples at: Follow CFA Orlando at: Follow CFA South Florida at: Follow CFA Tampa Bay at: 11