Lucrative Careers: Portfolio Managers' Salaries At Investment Firms

Portfolio managers are responsible for developing and implementing investment strategies for their clients. They must possess strong analytical skills and a penchant for research and analysis. As of 2024, the average annual salary for a portfolio manager in the United States ranges from $93,350 to $160,484, with some sources citing a median total pay of $135,209. Salary can vary depending on factors such as experience, location, and the size of the firm.

Salary by experience level

Entry-level Portfolio Managers (0-5 years of experience):

According to industry surveys, entry-level portfolio managers with up to five years of experience can expect a median total compensation, including base salary, bonuses, and equity, ranging from $150,000 to $250,000 per year. This range takes into account the fact that salaries can differ based on the specific firm, assets managed, and geographic location.

Mid-career Portfolio Managers (5-15 years of experience):

As portfolio managers gain more experience, their salaries tend to increase. For those with 5 to 15 years of experience, the median total compensation package typically falls between $250,000 and $500,000 annually. At this stage, portfolio managers have honed their investment skills and have a solid understanding of the market, allowing them to command higher salaries.

Senior Portfolio Managers (15+ years of experience):

Senior portfolio managers with over 15 years of experience are among the highest-paid professionals in the industry. Their extensive knowledge, network, and proven track record contribute to their high earning potential. The median total compensation for senior portfolio managers often exceeds $500,000 per year, and in some cases, can surpass the $1 million mark, especially at large asset management firms or hedge funds.

It is worth noting that the salary ranges mentioned above are not absolute and can be influenced by various factors, such as the size of the firm, the performance of the portfolio, and the geographic location of the position. Additionally, portfolio managers who demonstrate strong performance and consistently meet or exceed investment benchmarks may be eligible for substantial bonuses and equity awards, further increasing their overall compensation.

Salary by region

The salary of portfolio managers varies depending on the region and city they are located in. Here is a breakdown of the salary ranges for portfolio managers in different regions and cities:

United States

The average annual salary for a portfolio manager in the United States ranges from $93,350 to $137,921, with a median total pay of $135,209. The highest salary for a portfolio manager in the US can go up to $217,168, while the lowest can be around $69,579.

New York

New York is one of the highest-paying states for portfolio managers, with an average salary of $132,290. Specifically, in the New York-Newark-Jersey City metropolitan area, the average salary is $131,690.

District of Columbia

The District of Columbia is another high-paying state, with an average portfolio manager salary of $106,490.

Connecticut

Connecticut offers an average salary of $103,250 for portfolio managers. In the Bridgeport-Stamford-Norwalk area, the average salary is $122,340.

Massachusetts

Massachusetts-based portfolio managers can expect an average salary of $102,610. In the Boston-Cambridge-Nashua area, the average salary is $104,350.

California

While California is not among the top-paying states, certain cities within the state offer competitive salaries. In San Francisco, the median total compensation is $250,000 or more. San Francisco-Oakland-Hayward has an average portfolio manager salary of $119,100, while San Jose-Sunnyvale-Santa Clara offers an average of $110,470.

Other US Cities

Other US cities with notable salaries for portfolio managers include Kingston, NY ($117,300); Richmond, VA ($100,480); and Anchorage, AK ($99,660).

Hong Kong

Outside of the US, Hong Kong offers a competitive salary for portfolio managers, with a median total compensation of HK$2,000,000 or more.

Salary by asset class

The salary of a portfolio manager depends on several factors, including experience, location, and the type of firm. As of October 2024, the average annual pay for an investment portfolio manager in the United States is $137,921, with the highest pay reaching $217,168 and the lowest being $69,579.

Now, let's delve into the salary by asset class:

Equity Fund Managers

Equity fund managers, who primarily invest in stocks, have the highest earning potential among asset managers. Their bonuses are tied to outperforming benchmark indices, and top performers at large asset management firms or hedge funds can earn over $10 million per year. However, their compensation also carries greater performance-based risk, with larger reductions in bonus pay if they underperform. Equity fund managers overseeing a larger asset base will also earn significantly more.

Fixed Income Fund Managers

Fixed income fund managers, who manage investments in government and corporate bonds, have less performance-based risk in their compensation. Their earnings upside is lower compared to equity fund managers. On average, fixed income portfolio managers earn base salaries between $150,000 and $250,000, with bonuses of around 50% of their base pay for meeting performance targets. Top performers in this asset class can earn over $750,000 per year. While their bonuses are less sensitive to market volatility, they still face performance-based risk.

Boutique Investment Firms

Boutique investment firms, specializing in specific asset classes or strategies, typically pay their asset managers through base salaries rather than variable bonuses. Salaries in this setting range from $120,000 to $250,000. This model provides more stability and certainty in compensation but may limit the long-term earning potential compared to large institutions with bonus structures.

Large Financial Institutions

Asset managers at large banks, insurance companies, and major financial institutions often have lower base salaries, usually ranging from $80,000 to $150,000. However, they have greater bonus potential tied to individual and firm performance. Bonuses are heavily influenced by assets under management, investment performance, and sales targets. Top performers can earn total compensation exceeding $300,000 when bonuses are included. While this structure offers higher earning potential, it also carries higher performance risk, as bonuses can be significantly reduced or withheld during challenging economic climates or periods of underperformance.

Salary by industry

The salary of a portfolio manager varies depending on the industry and the specific company they work for. Here is an overview of the salaries for portfolio managers in different industries and companies:

Industries:

• According to the Bureau of Labor Statistics, the highest-paying industry for portfolio managers is securities, commodity contracts, and other financial investments, with an average salary of $124,810.
• Other high-paying industries include automotive parts and accessories stores, with an average salary of $123,280, and support activities for mining, with an average salary of $117,990.
• The average salary for portfolio managers in the software publishing industry is $109,000.
• The industries with the highest level of employment of portfolio managers include securities, commodity contracts, and other financial investments, management of companies, and credit intermediation.

Companies:

• According to Glassdoor, the top-paying companies for portfolio managers in the United States include Tower Research Capital, Wellington Management, Balyasny Asset Management, and Tudor Investment Corporation.
• The median total pay for portfolio managers at these companies ranges from $161,084 to $191,393.
• Boeing and Leidos are the top-paying companies in the aerospace and defense industry, with a median total compensation of $191,393.
• In the financial services industry, companies like Citadel, Meta, and ExodusPoint offer competitive salaries for portfolio managers.

It is worth noting that the salary for portfolio managers can also vary based on their level of experience, the size of the funds they manage, and the performance of their investment strategies. Senior portfolio managers with more experience and a strong track record of investment performance tend to earn higher salaries compared to entry-level or mid-career portfolio managers.

Salary satisfaction

Experience plays a crucial role in determining the salary of a portfolio manager. Entry-level portfolio managers with less than a year of experience can expect to earn around $114,000 to $150,000 annually. As portfolio managers gain more experience, their salaries tend to increase. Mid-career portfolio managers with 5-15 years of experience may earn between $250,000 and $500,000 per year. Senior portfolio managers with 15 or more years of experience can command salaries of $500,000 and above, with some earning over $1 million in total compensation.

Location also has a significant impact on the salaries of portfolio managers. Major global financial hubs like New York City and San Francisco offer higher pay, with median total compensation exceeding $250,000 in these cities. Other top-paying cities in the US include Boston and Chicago. However, it is important to consider the cost of living in these cities, as it can impact the purchasing power of the salary.

The industry a portfolio manager works in can also affect their salary satisfaction. Portfolio managers overseeing alternative investments and hedge funds tend to earn higher compensation, with median base salaries of $300,000 or more. On the other hand, portfolio managers working in traditional asset classes like equities and fixed income may earn between $150,000 and $200,000 in median total compensation.

Performance is another critical factor in salary satisfaction for portfolio managers. Beating appropriate performance benchmarks can significantly impact bonus payouts and equity awards. Portfolio managers who consistently outperform their benchmarks may receive bonuses and equity grants worth 200-300% of their base pay. However, underperforming the benchmark over multiple years can lead to below-average bonus payouts and even job insecurity.

Overall, portfolio managers at large investment firms can expect competitive salaries and compensation packages. Their salary satisfaction depends on a combination of factors, including experience, location, industry, and performance. By staying up-to-date with industry trends, improving investment strategies, and gaining relevant certifications, portfolio managers can increase their earning potential and achieve higher salary satisfaction.

Frequently asked questions