The key to a rewarding career on Wall Street is three letters: CFA. A master of business administration degree from a top business school may be an impressive credential, but the Chartered Financial Analyst designation has become the most esteemed credential in the financial industry, especially on Wall Street. The CFA Institute issues the designation, which requires extensive study and successful completion of a series of exams. Becoming a Chartered Financial Analyst is difficult, but can be a ticket to a high-paying career.
The "New York Sun" newspaper reported in 2006 that there are 50,000 CFAs in the United States, with nearly 20 percent of them working in New York City. These financial analysts earn a median salary of $180,000 a year, which the newspaper reported averages 54 percent higher than salaries of financial analysts with comparable experience. For earning power, the CFA even beats the prestigious MBA degree. The "Sun" reported that a CFA with 10 years of experience earns an average of 18 percent more than an investment analyst with an MBA only. About 60 percent of CFAs have a graduate degree, as well.
Salaries and Bonuses
The average CFA on Wall Street and elsewhere in the U.S. earned an average base salary of $184,000 a year in 2002, plus bonus compensation. Overall, the average CFA earned $304,000 in salary and bonuses, according to the a report by the "National Post Business" in Canada. In addition, a CFA with 10 years of experience earned an average total compensation package of $392,000 a year, the "Post" reported.
The average chartered financial analyst on Wall Street can earn more than $300,000 a year in base salary and bonus compensation, but the potential exists to earn much more. "National Post Business" reported that the highest-paid 10 percent of CFAs in the United States earn an average of $1.04 million a year. This includes base salary, annual performance bonuses and non-cash compensation.
The lucrative compensation packages that come with a CFA and a job on Wall Street are not easy to acquire. Becoming a CFA requires the minimum of a bachelor's degree and at least three years of work experience in the financial industry. Candidates for the charter must pass three exams, each of which requires months of study and about six hours to complete. The passing rate for the three exams is less than 50 percent, according to the website CFA Salary.