2018 FINANCIAL COMPENSATION SURVEY F I N D I N G S A N D R E S U LT S

NOVEMBER 2018

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Dear Colleagues,

As the premier professional organization for investment professionals, CFA Society Indianapolis is dedicated to being a reliable and trustworthy source of information. Our 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 2018 Financial Compensation Survey. The survey, which had been void in the market since 2007, provides a unique, 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,

Dan Sailer, CFA President, CFA Society Indianapolis

2018 FINANCIAL COMPENSATION REPORTL E T T E R F R O M S O C I E T Y L E A D E R S H I P

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 2018 CFA Societies Financial Compensation Survey seeks to provide access to this vital information. This report is a compilation of the results from a survey on compensation practices in the greater Indianapolis area conducted earlier this year; 121 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 expected annual salary change data, plus the respondent’s view on the adequacy of compensation and the desire to explore other job opportunities.

The 2018 Financial Compensation Survey data and exhibits are intended to provide general guidance for comparing compensation levels with overall values for key categories. Note 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.

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95.3%of respondents holding the CFA®

Charter report that the designation has helped their career.

2018 FINANCIAL COMPENSATION REPORTE X E C U T I V E S U M M A R Y

Years of experience< 2 years

2 – 5 years

5 –10 years

10 – 20 years

20 + years

6.6%14.9%30.6%28.9%19.0%

EducationBachelor degree

Graduate degree

Doctorate

66.1%30.6%3.3%

Feel fairly compensated

66.9%Yes

33.1%No

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Median total compensation*

Non-Charterholder CFA Charterholder

$70,500$133,354

$123,500$163,800

Bachelor degree

Graduate degree

Our data show that professionals who attain the CFA designation and/or a graduate degree tend to have higher compensation levels.

* Median total compensation figures listed do not control for other variables such as years of experience and job title.

Feel valued by their company

84.3% Yes 14.8% No 0.9% N/A

Charterholder status

71.1% Yes 19.8% Candidate 9.1% No

2018 FINANCIAL COMPENSATION REPORTR E S P O N D E N T P R O F I L E S

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Employer size< 50

50 to < 250

250 to < 500

500 to < 2,500

2,500 to < 5,000

> 5,000

40.5%24.8%9.9%

10.7%2.5%

11.6%

AUM of firm< $500 million

$500 million to < $2 billion

$2 billion to < $50 billion

> $50 billion

Not Applicable

16.5%22.3%39.7%6.6%

14.9%

2018 FINANCIAL COMPENSATION REPORTR E S P O N D E N T P R O F I L E S

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Fifteen most common occupationsFinancial advisor/broker

Bank/trust/private client portfolio manager

Other*

Financial analyst (corporate)

Manager of managers/director of investments

Buy-side research analyst (equity)

Buy-side research analyst (fixed income)

Chief investment officer

Portfolio manager (equities)

Portfolio manager (fixed income)

Consultant

Portfolio manager (indexed/alts/other)

Chief financial officer

Private client professional (other)

Professor/lecturer

12.4%9.1%7.4%7.4%6.6%6.6%6.6%5.0%5.0%5.0%3.3%3.3%2.5%2.5%2.5%

Organization typeInvestment management firm

Investment bank, commercial bank, brokerage firm, trust company

Insurance company

Other

Consulting, accounting, law firm

Endowment, foundation, other not-for-profit

Family office

Educational institution

Hedge fund or fund of hedge funds

Government agency/department

Corporate plan sponsor

34.7%15.7%13.2%13.2%7.4%5.0%4.1%3.3%1.7%0.8%0.8%

* Respondents reported a wide variety of other occupations such as business analyst, commercial banking/real estate, and private equity roles.

2018 FINANCIAL COMPENSATION REPORTR E S P O N D E N T P R O F I L E S

The most commonly cited reasons for looking for a new role were higher compensation followed by pursuing more challenging work/career advancement.

Reason for looking for a new role Very likely Likely

Better work/life balance 0% 4%

Higher compensation 19% 27%

More challenging work/career advancement 12% 23%

Other 4% 4%

Poor culture/lack of respect 4% 4%

Recently completed degree/obtained certification 0% 0%

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Opportunity for advancement within company

5.2% N/A

21.7% No

17.4% Not sure

55.7%Yes

Likelihood of looking for a new role in 2018

49.6%Unlikely

13.9% Likely

27.8% Very unlikely

8.7% Very likely

2018 FINANCIAL COMPENSATION REPORTF I N D I N G S A N D R E S U LT S

Types of compensation in addition to base salary

Primary Determinant of Bonus

Cash/bonus performance

Employer 401(k) contributions

Profit sharing

Commission/ a sales bonus

Restricted stock awards/phantom shares

Deferred /multi-year earnings

73%60%22%13%9%2%

Overall firm performance

Business unit/division performance

Discretionary

Other factors related to individual performance

Individual financial contribution

Individual investment performance

Commissions generated

33.0%21.6%18.2%15.9%4.5%4.5%2.3%

Expected change in total compensation

Decline 1.7% Stay the same 13.9%

Increased 10–20% 22.6%

Increased > 20% 9.6%52.2%Increased 0–10%

Overall firm performance and business unit/division performance were the top two determinants of bonus.

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2018 FINANCIAL COMPENSATION REPORTF I N D I N G S A N D R E S U LT S

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How respondents wish their compensation was structuredOccupation

Financial advisor/broker

Bank/trust/private client portfolio manager

Financial analyst (corporate)

Buy-side research analyst (equity)

Manager of managers/director of investments

Other

Buy-side research analyst (fixed income)

Chief investment officer

Portfolio manager (equities)

Portfolio manager (fixed income)

54.0% / 19.5% / 10.9% / 15.6%

79.2% / 14.9% / 4.8% / 1.1%

78.8% / 15.6% / 2.8% / 2.8%

63.4% / 27.3% / 9.3% / 0.0%

81.2% / 13.8% / 5.0% / 0.0%

78.1% / 14.4% / 6.9% / 0.6%

70.7% / 26.4% / 2.9% / 0.0%

85.5% / 11.0% / 3.5% / 0.0%

73.8% / 21.2% / 5.0% / 0.0%

60.4% / 35.1% / 2.8% / 1.7%

Base Cash bonus Long term Other

Note: Figures represent average of response to ideal compensation.

2018 FINANCIAL COMPENSATION REPORTF I N D I N G S A N D R E S U LT S

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Median and 75th percentile total compensation by occupation

Position Total Comp N Base Bonus Other

Comp

Financial advisor/broker* 166,000 15 109,801 16,675 19,000

75th percentile 264,750 141,400 38,000 148,500

Bank/trust/private client portfolio manager 114,966 11 90,000 9,250 9,966

75th percentile 206,250 145,000 26,250 43,000

Median Compensation Stats for Popular Positions

Position Total Comp N Base N Bonus N Other

Comp N

Financial analyst (corporate) 112,500 9 90,000 9 16,000 6 7,500 9

Other 112,500 9 97,500 9 14,250 8 6,000 5

Manager of managers/director of investments 124,250 8 116,000 8 15,000 5 10,000 5

Buy-side research analyst (equity) 106,000 8 81,495 8 22,000 7 10,498 6

Buy-side research analyst (fixed income) 155,800 8 107,000 8 45,000 8 8,200 6

Chief investment officer 171,500 6 127,000 6 25,000 5 n/a 3

Portfolio manager (equities) 220,300 6 156,000 6 36,000 5 n/a 4

Portfolio manager (fixed income) 195,000 6 155,000 6 36,000 5 n/a 3

NoteCells in yellow reflect fewer than 5 responses. Base/Bonus/Other Comp/Total Comp figures were calculated independently from each other.Suggestion: The best way to read this chart is to start with the Total Comp column ... and then use the Base, Bonus and Other Comp columns to understand generally how Total Comp is structured.For certain positions, the Total Comp figure can appear skewed when multiple respondents have no Base, no Bonus and/or no Other Comp to report.

Note * For certain positions, the Total Comp figure can appear skewed when multiple respondents have no Base, no Bonus and/or no Other Comp to report.

Only Reported for positions with more than 10 responses. Base/Bonus/Other Comp/Total Comp figures were calculated independently from each other.Suggestion: The best way to read this chart is to start with the Total Comp column ... and then use the Base, Bonus and Other Comp columns to understand generally how Total Comp is structured.

2018 FINANCIAL COMPENSATION REPORTF I N A N C I A L C O M P E N S AT I O N

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Reported median compensation for those with less than 10 years of experience for selected occupations

Position Total Comp N Base N Bonus N Other

Comp N

Buy-side research analyst (equity) 87,000 7 72,990 7 25,000 6 7,000 5

Bank/trust/private client portfolio manager 85,000 6 74,000 6 n/a 4 n/a 4

Financial analyst (corporate) 108,750 6 88,500 6 n/a 3 6,250 6

Buy-side research analyst (fixed income) 135,000 5 95,000 5 40,000 5 n/a 3

Manager of managers/director of investments 123,500 5 100,000 5 n/a 3 n/a 3

Reported median compensation for those with more than 10 years of experience for selected occupations

Position Total Comp N Base N Bonus N Other

Comp N

Financial advisor/broker 180,325 12 135,000 8 16,000 5 26,250 12

Bank/trust/private client portfolio manager 226,000 5 150,000 5 n/a 4 38,651 5

Median total compensation for those with less than 10 years of experience is $110,000. Median total compensation for those with more than 10 years of experience is $185,500.

NoteCells in yellow reflect fewer than 5 responses.Base/Bonus/Other Comp/Total Comp figures are median and were calculated independently from each other.Calculation of median statistics only includes those individuals who stated that they are eligible to receive a given form of compensation. Therefore, we would not expect these numbers to add up to the total compensation figure.Suggestion: The best way to read this chart is to start with the Total Comp column ... and then use the Base, Bonus and Other Comp columns to understand generally how Total Comp is structured.

2018 FINANCIAL COMPENSATION REPORTF I N A N C I A L C O M P E N S AT I O N

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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.

Compensation satisfaction vs. likelihood of looking for new job

Compensation Trend Analysis

Fairly compensated Not fairly compensated

2015 2017

$70,050 $107,800

$121,500

$200,750

$78,577 $170,000

$257,000

$214,000

Less than 5 years 10 to less than 20 years 20+ years5 to less than 10 years

2.6%

21.1%

6.5% 28.9%

55.8%

36.8%

35.1%

13.2%

Very Likely Likely Unlikely Very Unlikely

2018 FINANCIAL COMPENSATION REPORTF I N A N C I A L C O M P E N S AT I O N

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Survey methodology

MethodAn online survey was deployed to known financial professionals in the region represented by CFA Society Indianapolis. Email subscribers of the Society and LinkedIn group members were specifically targeted. The survey was not limited to just these audiences. In addition, this survey was structured so all data gathered was anonymous, with no identifiable information requested.

RespondentsRespondents were financial and investment professionals and totaled 121 unique and completed responses.

TimingThe survey was active from May 14 – June 22, 2018.

AssumptionsThe findings from this survey were derived from self-reported data. Because the survey uses sampling methodology and broadly defined positions, survey findings are not necessarily representative of the total population; rather, 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.

2018 FINANCIAL COMPENSATION REPORTS U R V E Y M E T H O D O L O G Y

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About the CFA Society

CFA Society Indianapolis is the premier professional organization for investment professionals to connect with Chartered Financial Analysts throughout the region. The 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.

CFA Society Indianapolis:• Promotes ethical and professional standards within the investment industry,

• Encourages professional development through the CFA Program and continuing education,

• Facilitates the exchange of information and opinions among people within the local investment community and beyond, and;

• Works to further the public's understanding of the CFA designation and investment industry.

If you are interested in learning more about earning your charter, or to learn more about CFA Society Indianapolis, contact info@indianapolis.cfasociety.org.

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2018 FINANCIAL COMPENSATION REPORTA B O U T T H E C F A S O C I E T Y