Which are the most rewarding sectors in Finance?
By default, we would all bet our hats that investment bankers are the best paid finance professionals on the street. However, few know just how well or how badly other sectors fare in the industry vs. the high-rollers. Read on to find out which sector comes a very close second, and if you should be jumping ship from Asset Management to Venture Capital.
A few takeaways were in line with our expectations: Retail banking is the lowest paid sector with junior level employees averaging GBP 30,000 (USD 50,000) in total compensation compared to over GBP 53,000 (USD 87,000) for the same level in investment banking. And as expected, Investment banking and Markets leads the way at the most senior level with MDs averaging GBP 615,000 (USD 1,008,000) total comp compared to GBP 267,000 (USD 438,000) for the equivalent level in Retail banking.
Also not a major suprise was the fact that traditional Asset Management firms were paid significantly less than their peers in the alternatives sector with a gap of GBP 206,000 (USD 338,000) at MD level and GBP 46,000 (USD 75,000) for VPs.
However, we were struck by the high rewards earned by alternative managers early on in their careers compared to the Investment Banking sector: at mid ranking levels (Associate, VPs and Directors or equivalent), the Hedge Fund, Private Equity and Venture Capital sectors rank highest, with for example a GBP 60,000 (USD 100,000) lead for VPs compared to equivalent investment bankers.
See below for a detailed breakdown of the data.
The significant gap between the more utility areas of financial services such as retail banking and insurance, and more high risk investment banking activities is yet another argument for a separation between these businesses as it is not only the functions and culture but also the rewards that are completely different.
| Title | Retail Banking | Insurance | Independent Broker | Asset Management | HF/VC/PE | IB & markets |
|---|---|---|---|---|---|---|
| Analyst | £30,000 | £33,000 | £42,000 | £43,000 | £59,000 | £53,000 |
| Associate | £40,000 | £51,000 | £59,000 | £67,000 | £119,000 | £88,000 |
| VP | £70,000 | £74,000 | £107,000 | £115,000 | £220,000 | £161,000 |
| Director | £124,000 | £120,000 | £169,000 | £207,000 | £262,000 | £274,000 |
| MD | £267,000 | £305,000 | £334,000 | £364,000 | £570,000 | £615,000 |
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