The CFA designation is widely recognized as the de facto gold standard for anyone who is employed or aspires to be employed within the investment industry. Moreover, in the context of ongoing investor perception issues with the industry in general, and with investment practitioners more specifically, the CFA stands apart and speaks for integrity and high ethical standards. But does this translate into measurable value for individuals that achieve the CFA designation and, by inference, for the firms that employ them? In a nutshell, finding the answer to that question was the purpose of an initiative that was undertaken by CFA Societies across Canada.

Background

In 2011, CFA Societies Canada (all local CFA societies in Canada) decided that we would collaborate on a project that would survey our members on their compensation. Additionally, we would focus the survey over the last two years, look at the component parts of compensation (i.e., base salary, performance bonuses, and equity shares/options), and then provide additional information by industry and experience and at the individual society level. To add rigour and formality to the process, we decided to send out a number of Requests for Proposals (RFPs) to firms that had extensive experience in surveys with professional service organizations. In the end, Environics Research Group was selected, in part because of its familiarity with these types of surveys and its ability to satisfy all our requirements, including the need to have results available in both English and French.

The Results

The survey was conducted between April and early May and there were over 2,100 participants, which represented a response rate of just over 18 percent across the country.

At a high level, the general results were in line with our expectations. The CFA designation does translate into measurable value for the investment professionals who achieve it. Also, variable compensation represented a higher portion of overall compensation, and of that portion, performance bonuses were the highest single component (see Table 1). While markets continued to be volatile over the last two years, compensation levels actually rose in 2011 versus 2010 across all individual components. See Table 1 below.

As expected, compensation increased by years of experience, and while those with over 35 years of experience had the highest overall compensation, averaging roughly $625K, the “sweet spot” for overall compensation appears to be those with 25 to 29 years of experience who averaged approximately $350K of overall compensation in 2011 See Chart 1 bottom.

Next Steps

The report contains much useful information for CFA charterholders, members of CFA societies, HR professionals, universities, and other key stakeholder groups across the country, most notably employers. We will be making the summary report available to all of our members free of charge, and it is currently available on our website (www.torontocfa.ca – select Publications – Compensation Survey). In addition, we will be engaging with key employers in the Toronto community and providing them with copies of the report for their review. We will work with them to use the findings to promote the designation and also look for other creative ways to further our members’ position within targeted employers.

While increased compensation is only one tangible benefit of receiving the CFA designation, it is an important one. As we work to expand our outreach efforts on your behalf, we will certainly use the data contained in this survey report to demonstrate and quantify the value of the CFA designation.